WORK-LIFE BALANCE / APR. 03, 2015
version 4, draft 4

Does High Welfare Encourage You To Work?

Roosevelt

With the recession causing high unemployment levels throughout the world, there has been a large emphasis in recent years on getting people back into work. With many countries suffering from incredibly high youth unemployment, this issue is particularly pronounced among young adults.

See Also: How To Claim Unemployment Benefits In The UK

Welfare State Good or Bad?

The popular perception is that high welfare spending acts as a disincentive to work. Essentially, if people are giving substantial payments from the state they are less inclined to work and support themselves.

A recent study from a team of Norweigan researchers suggests that reality doesn’t really match up with this perception. The study, of over 19,000 people from 18 European countries, found that high welfare payments were not connected with a drop in motivation to work.

The survey asked people whether they would love to have a paid job, even if money was not an issue in their life. They then compared the responses to this question with the welfare spending in each country.

The results ran counter to popular perception, suggesting that the more a nation spent on unemployment or sickness benefits, the more likely the population of that country were to want to work, whether in employment or not.

In Norway, for instance, around 80 percent of respondents expressed a desire to work, despite the country paying the highest welfare payments in Europe. Estonia, by contrast, saw just 40 percent of respondents expressing this desire for work, despite the country being one of the least generous in terms of welfare.

UK Benefits

So how did the UK do? As a nation, we seemed smack bang in the middle of the league. Not only were we average in terms of benefits payments, but also in terms of the percentage of the population that wanted to work (60 percent).

Interestingly, the paper also found that employment programmes to help the unemployment get back into work generally made participants more likely to want work, even if they didn’t need the money.

"Many scholars and commentators fear that generous social benefits threaten the sustainability of the welfare state due to work norm erosion, disincentives to work and dependency cultures," the authors say.

The assumption in this belief is often that the level of funding from state benefits dulls the incentive to find work. It’s something that the authors suggest is not grounded in reality.

"A basic assumption is that if individuals can obtain sufficient levels of well-being - economic, social and psychological - from living off public benefits, compared to being employed, they would prefer the former. When a ’critical mass’ of individuals receive public benefits rather than engaging in paid work, the norms regulating work and benefit behaviour will weaken, setting off a self-reinforcing process towards the ’self-destruction’ of the welfare state. The more people are recipients of benefits, the less stigmatizing and costly in terms of social sanctions it is to apply for benefits," they say.

So the notion that a large welfare state is linked with a dependency culture appears not to be the case and is certainly not connected with a drop in motivation to work.

"On the contrary, employment commitment was much higher in all the studied groups in bigger welfare states. Hence, this study’s findings support the welfare resources perspective over the welfare scepticism perspective," the paper concludes.

See Also: Unemployment Benefits Help Reduce Suicides

Have you been out of work yourself recently and relied on unemployment benefits? How did this impact your desire to find work?  I’d love to hear your experiences in the comments below.

 

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