Economic Downturn and Stress Testing European Welfare Systems

Abstract

As unemployment rises across the European Union (EU), it is important to understand the extent to which the incomes of the new unemployed are protected by tax–benefit systems and to assess the cost pressures on the social protection systems of this increase in unemployment. This chapter uses the EU tax–benefit model EUROMOD to explore these issues, comparing effects in five EU countries. It provides evidence on the differing degrees of resilience of the household incomes of the newly unemployed due to the variations in the protection offered by the tax–benefit systems, according to whether unemployment benefit is payable, the household situation of the unemployed person and across countries.

Citation

Figari, F., Salvatori, A. and Sutherland, H. (2011), "Economic Downturn and Stress Testing European Welfare Systems", Immervoll, H., Peichl, A. and Tatsiramos, K. (Ed.) Who Loses in the Downturn? Economic Crisis, Employment and Income Distribution (Research in Labor Economics, Vol. 32), Emerald Group Publishing Limited, Leeds, pp. 257-286. https://doi.org/10.1108/S0147-9121(2011)0000032012