1. Reducing extreme poverty in Greece the role of a guaranteed minimum income scheme Manos Matsaganis Athens University of Economics & Business Chrysa Leventi University of Essex EUROMOD Research Workshop Lisbon (2 October 2013)

2. guaranteed minimum income general idea  ultimate safety net  covers basic needs in situations of extreme poverty  tops up income if below a certain threshold  means-tested  funded out of general taxation  aims at reducing extreme poverty  may not influence relative poverty  reduces poverty gap

3. guaranteed minimum income more than just a benefit  usually requires availability for work  unless the claimants are disabled, unable to work or looking after small children  accompanying actions  social work, training courses, volunteering etc.  active employment policies: incentives for employers and employees  schooling, language courses, participation in rehabilitation programmes etc.

4. guaranteed minimum income in Europe political support  not a politically contested issue  supported by  British liberals  Nordic social democrats  German christian democrats  French socialists

5. guaranteed minimum income Northern Europe guaranteed minimum income (€ per month) single personcouplecouple + 2 children UK3245081108 Ireland80613471605 Sweden3265891123 Denmark139127823698 Finland4618531466 Norway69411521856 Ιceland*7941271 * Data for 2010 Source: MISSOC (Jan 2012)

6. guaranteed minimum income Central Europe guaranteed minimum income (€ per month) single personcouplecouple + 2 children Austria77311601438 Βelgium77010271356 France475997 Germany3746741176 Netherlands6681336 Luxemburg128319252158 Source: MISSOC (Jan 2012)

7. guaranteed minimum income Eastern Europe guaranteed minimum income (€ per month) single personcouplecouple + 2 children Czech Republic123234388 Slovakia61105158 Hungary*80134 Poland94 Slovenia231399565 Εstonia**77138261 Lithuania101182324 Latvia57114242 Romania295290 Βulgaria3344104 * Max benefit amount ** Data for 2011 Source: MISSOC (Jan 2012)

8. guaranteed minimum income Southern Europe guaranteed minimum income (€ per month) single personcouplecouple + 2 children Italy* Spain4265961193 Portugal195332528 Greece Cyprus452678949 Malta415450521 * Varies by municipality Source: MISSOC (Jan 2012)

9. guaranteed minimum income in Greece the position of international organizations  IMF (Country Report No. 12/57, 2012)  promoted the idea GMI would replace most existing benefits (other than unemployment benefit) targeted at the bottom 20% of the income distribution  OECD (OECD Review of Greek Social Programmes, 2012)  rejected the idea counter-proposal: consolidate existing family, housing, unemployment and disability benefits on a means-tested basis  politically contested issue?

10. guaranteed minimum income (GMI) previous studies  Matsaganis et al. (2001) cost: 0.23% of GDP (ECHP 2000)  Legakis (2005) cost: 0.55% of GDP (EU-SILC 2003)  Flevotomou (2009) cost: 0.45% of GDP (HBS 2004)  Matsaganis & Leventi (2009) cost: 0.92% of GDP (HBS 2005)

11. guaranteed minimum income (GMI) scenarios  three alternative scenarios scenario 1 GMI = unemployment insurance benefit = social pension €360 per month (single person) scenario 2 GMI= unemployment assistance benefit for older workers €200 per month (single person) scenario 3 GMI = 40% of median equivalised HDI €269 per month (single person) housing allowance €125 for those with rent / mortgage expenses plus €25 for each each additional family member

12. guaranteed minimum income excl. housing allowance no expenses for rent or mortgagescenario 1scenario 2scenario 3 single person 360200 269 single parent + one child 540300 403 couple 612340 457 couple + 1 child 792440 592 additional amount for any extra adult 252140 188 additional amount for any extra child 180100 134

13. guaranteed minimum income incl. housing allowance with expenses for rent or mortgagescenario 1scenario 2scenario 3 single person 485325 394 single parent + one child 690450 553 couple 762490 607 couple + 1 child 967615 767 additional amount for any extra adult 277165 213 additional amount for any extra child 205125 159

14. guaranteed minimum income benefit calculation: couple + 2 children with expenses for rent no GMIscenario 1scenario 2scenario 3 household income 744 from employment* 234 from social benefits 360 from rent 150 reference income 698 guaranteed income 1172740926 transfer 4754343229 * 20% of employment income is not taken into account

15. guaranteed minimum income participation (2012) scenario 1scenario 2scenario 3 number of recipients 1 1 680 688707 8981 045 074 as % of population 2 15.4%6.5%9.6% 1. All household members are considered as recipients if one of them is in receipt 2. Population in 2012: 10 928 115 inhabitants Source: EUROMOD (Version F6.43)

16. guaranteed minimum income cost (2012) scenario 1scenario 2scenario 3 in million €2 3747981 317 as % of GDP 1 1.2%0.4%0.7% 1. GDP in 2012: €193,7 billion Source: EUROMOD (Version F6.43)

17. guaranteed minimum income poverty effects (2012) no GMIscenario 1scenario 2scenario 3 poverty risk (60% of median) 21.315.721.320.9 change (in pps)-5.60.00-0.4 poverty risk (40% of median) 10.52.28.75.5 change (in pps)-8.3-1.8-5.0 poverty gap (60% of median) 41.119.131.224.9 change (in pps) -22.0-9.9-16.2 Source: EUROMOD (Version F6.43). Underlying dataset: EU-SILC 2007, adjusted for unemployment

18. guaranteed minimum income poverty risk estimates by household type (60% of median) no GMIscenario 1scenario 2scenario 3 general population21.315.721.320.9 single or couple (both below 65) 19.915.819.919.8 single or couple (at least one over 65) 18.718.318.7 couple with 1 or 2 children 24.215.024.223.7 couple with 3+ children 32.115.732.129.4 single parent families32.424.432.431.6 other household types17.714.417.7 Source: EUROMOD (Version F6.43). Underlying dataset: EU-SILC 2007, adjusted for unemployment

19. guaranteed minimum income poverty gap estimates by household type (60% of median) no GMIscenario 1scenario 2scenario 3 general population41.119.131.224.9 single or couple (both below 65) 54.127.337.831.1 single or couple (at least one over 65) 23.117.921.720.9 couple with 1 or 2 children 49.922.034.425.6 couple with 3+ children 35.315.627.821.4 single parent families41.715.933.124.3 other household types35.415.130.024.3 Source: EUROMOD (Version F6.43). Underlying dataset: EU-SILC 2007, adjusted for unemployment

20. guaranteed minimum income prospects (1)  a useful tool  for poverty alleviation at (relatively) modest cost  for the modernisation of the Greek social protection system  urgent need for strengthening the social safety net  the crisis has increased the demand of social protection  …but the austerity has reduced its supply  obstacles  budgetary  practical  administrative  political

21. guaranteed minimum income prospects (2)  guaranteed minimum income on the spotlight  2013-2014 Spending Review: (further) massive fiscal consolidation  5% of GDP in 2013 + 2.25% in 2014  cuts in social spending: 45% of total savings  increases in social contributions: 5% of total savings  some expansionary measures (subject to strict cash limits)  new means-tested child benefit (2013)  new unemployment insurance benefit for the self-employed (2013)  broader eligibility conditions for unemployment assistance benefit  minimum income pilot (to be implemented in two localities in 2014)

22. guaranteed minimum income prospects (3)  the pilot: a unique opportunity (not to be missed)  issues  political priority?  administrative preparedness?  careful design?  systematic monitoring?  ex post evaluation?  watch this space!

23. Thank you very much for your attention!