Welfare States, Labour Market Institutions and the Working Poor: A Comparative Analysis of 20 European Countries

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThis paper regards the incidence of in-work poverty and how it is reduced by the payment of social transfers in 20 European countries. It combines a micro-and a macrolevel perspective in two-level models. The basis for the analysis is micro-data from the EU Statistics on Income and Living Conditions (EU-SILC) 2005 and macro-data from sources such as the OECD and Eurostat. The broad comparative perspective allows for a separation of different institutional influences, namely the influence of the degree of decommodification, defamilisation and bargaining centralisation. In contrast to previous studies on the working poor which have mainly described country differences in inwork poverty, this paper focuses on the question of how such differences can be explained from a broader perspective of poverty research. In general, the results confirm the overall hypothesis that both welfare state measures and labour market institutions have an influence on in-work poverty. By analysing influences on pre-transfer poverty and poverty reduction separately, I show that such factors have varied effects on inwork poverty. While bargaining centralisation proves to be relevant for the distribution of pre-transfer incomes only, the set-up of the social security system in particular impacts the extent of poverty reduction.

Differences in the Patterns of in-work Poverty in Germany and the UK

“…We focus on the degrees of decommodification and regulation, strictness of employment protection, bargaining centralisation, and family policy orientation. Therefore, this study refers to measures that are treated as relevant in the aforementioned policy discourse and established as key macro variables for explaining economic micro-level outcomes (Brady et al 2010, Lohmann 2009, Baranowska and Gebel 2010. Table 1 compares Germany and the UK based on these measures.…”

“…The average net replacement rate during unemployment (OECD 2010) is used as indicator for the degree of decommodification (Lohmann 2009). This measure refers to the overall generosity of the welfare state with regard to unemployment benefits.…”

“…The degree of centralisation is used as indicator of the configuration of the bargaining system (Lohmann 2009). This concept is strongly related to the authority held by the trade unions, the competitive situation between trade unions and the options for concentrated and coordinated action (Visser 2004).…”

Cause and effects of female labour force participation in local welfare systems

“…Nonetheless, studies have shown that full-time work among women significantly lowers the risk of poverty (Halleröd et al 2006). Even among women with full-time work, however, the proportion of the 'working poor' has substantially increased in recent years (Lohmann 2009), indicating that an increase in female labour supply does not necessarily enhance social cohesion nor lead to the true socio-economic empowerment of women (Lim undated).…”

The Impact of Labour Market Reform Policies on Insiders’ and Outsiders’ Low-Wage Risk

“…Empirical research has shown that this process led to increasing rates of atypical employment, lowwage work, and in-work poverty (Lohmann, 2009;Andreß and Lohmann, 2008;Lucifora et al, 2005;OECD, 2011). Specifically, outsiders to the labour market have been shown to react very sensitively to processes of policy transformation.…”