Higher benefits ‘don’t reduce wish to work’

HIGH levels of benefits for the unemployed do not lead to a lack of motivation to find work, a Scottish study has found.

By CLARE CARSWELL Monday, 18th November 2013, 12:00 am

The researchers concluded that cultural and demographic factors have a greater impact on the lives of jobless people. Picture: PA

The well-being of unemployed ­people is not bolstered by the level of benefit they ­receive, ­according to the report, which was published by the University of Edinburgh.

Researchers compared how unemployment affected ­people’s life satisfaction in 28 countries – all European Union countries and Norway – and found there was no over-riding trend for satisfaction to increase with benefit levels.

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Dr Jan Eichhorn, of the ­University of Edinburgh’s School of Social and ­Political ­Science, who wrote the ­report, said: “Those who claim that greater unemployment ­benefits lead to less motivation for ­people to seek employment should think again.

“For most people, it is not the degree of state provisions that determines how they ­personally feel about the ­experience of being unemployed. ­“Unemployment does not just result in a loss of income but also a change in social ­position – that is perceived differently in different societies.”

By using data from Eurostat, the central statistics office of the European Commission, and the European Values Study, it was found that some of the ­countries with the most generous benefits have the greatest loss in life ­satisfaction for their unemployed, and vice versa.

For example, Luxembourg and Finland are in the top 25 per cent for unemployment benefits expenditure yet have high ­levels of dissatisfaction in people ­without jobs.

The reverse is true for ­Romania and ­Poland, which are in the ­bottom 25 per cent for benefit provision while unemployed people in those countries are among the least ­affected.

The researchers ­concluded that cultural and demographic factors have a greater impact on the lives of jobless people, such as having no job in a country that has a proportionally older population and fewer people at working age. Other factors highlighted by the report as having a negative impact on personal well-being were high inflation levels and income inequality.

The country with the highest level of dissatisfied unemployed ­people was Germany, with a rate that was 50 per cent higher than second-placed Hungary.

The UK is ranked in the mid 50 per cent for the level of ­benefits provided to the country’s unemployed and is ranked as 18th for the extent of loss in life satisfaction of the jobless.

Population ageing is a long-term trend that began several decades ago in the EU, characterised by the proportions of young and working-age people in a country falling and older people increasing.

In the most recent studies, working-age people accounted for two thirds of the population across the EU, while under-15s made up 15.6 per cent and those aged 65 and over 17.5 per cent.

However, figures show ­Germany bucked the trend with the highest proportion of older citizens and the lowest share of under-15s.

Predictions suggest the ­average age of people in the EU will rise from 41.2 to 47.6 years old by 2060, with the population of working age declining steadily and older people ­accounting for an ever-increasing share of the total population.

Income inequality is the ­economic gap between a country’s wealthiest and poorest ­people and has been growing over the last ten years, particularly in developed countries where historically it had been more contained. According to statistics from the Organisation for Economic Development and Cooperation, disparities tend to be lower in northern Europe, with Slovenia, Denmark and Norway leading the rankings with the lowest levels of inequality between households.