USING BUDGET CONSTRAINTS TO ILLUSTRATE POVERTY TRAPS: THE CASE OF YOUNG PART-TIME WORKERS IN AUSTRALIA

Although much is known about the incidence of unemployment in Australia over the recent past, the causes of unemployment remain controversial. Various explanations have been advanced, some of which focus on the unemployment benefits system. The present study examines the problem of high effective marginal tax rates faced by young social security recipients wishing to engage in part-time employment, and the resultant emergence of so-called ‘poverty traps’. We examine budget constraints for unemployed eighteen year olds, both singles and couples, for part-time employment in four low income occupations; namely, brickie's labourer, public service clerk, stationhand and sales assistant. The results indicate that pervasive disincentive effects exist for young people seeking low wage employment.     

Financial Incentives and Job‐search Training: Methods to Increase Labour Market Integration in Contemporary Welfare States?

In their efforts to increase labour market integration, contemporary welfare states emphasize the importance of financial incentives, active job‐searching and participation in labour market programmes. However, the effects of these policies have been minor and in some cases even inconsistent. The aim of this study was to examine whether and how financial incentives and job‐search training programmes increase re‐employment and the quality of re‐employment. A total of 1,015 unemployed persons participated in a Finnish follow‐up study with a randomized experimental design. Although no overall impact of job‐search training on re‐employment emerged, a positive effect was found for those groups of the unemployed who had a financial incentive to participate in the programme. Nevertheless, among unemployed workers with benefits at a minimum level there were no positive effects on the quality of re‐employment, and the impact decreased when unemployment was prolonged. Financial incentives and job‐search training appear to increase re‐employment among those of the unemployed who generally have better chances on the labour market, whereas these measures are not sufficient for the more disadvantaged groups of the unemployed.     

Deciphering Deservedness: Canadian Employment Insurance Reforms in Historical Perspective

In 2012, the Government of Canada introduced reforms to Employment Insurance (EI), Canada's primary income security programme for the unemployed. The changes entailed new requirements for particular types of claimants to apply for and accept jobs of increasingly less pay, and codified the efforts claimants must demonstrate in job searches to maintain benefits. These measures leave many claimants little choice but to accept precarious employment as a means of financial survival. The central claim of the article is that recent EI reforms are not adequately understood as an instance of neo‐liberal activation. Instead, they must be situated in a long history of attempts to categorize the unemployed as deserving or undeserving of income security on the basis of their work history and perceptions of their willingness to work. Through a survey of different periods of unemployment policy in Canada, we demonstrate continuity in authorities' efforts to differentiate the unemployed into categories of worthy and unworthy. Within this history, however, the 2012 reforms are unprecedented in the extent to which they reorient the EI programme to service low wage labour markets. By way of conclusion, we suggest that the current EI programme exacerbates insecurities for the growing segment of workers in precarious employment.     

The 'Dole or Drudgery' Dilemma: Education, the Work Ethic and Unemployment

Before the recession, Labour ministers claimed that much unemployment in the UK was voluntary. While social policy authors have repeatedly countered such claims by stressing that unemployed people generally possess a strong work ethic and employment commitment, their accounts typically neglect the role that choosiness in job search behaviour plays in deciding individuals' employment status. Fifty in‐depth interviews with both unemployed and employed respondents exposed considerable diversity in attitudes towards ‘dole’ (being unemployed and claiming unemployment benefits) and ‘drudgery’ (doing less attractive jobs). The more educated were more likely to prefer ‘dole’ to ‘drudgery’ (this was also found using National Child Development Study survey data), yet they usually found jobs despite their greater choosiness. Those with very low educational attainment often desperately wanted jobs but could not find them due to their low employability – which might offer an explanation for the often replicated (yet paradoxical) finding that unemployed people generally exhibit a strong work ethic and pro‐employment attitudes and behaviours. Furthermore, the findings indicate that the scope for many Jobseeker's Allowance claimants to increase their net income by undertaking an unattractive job is greater than social policy authors often imply. The question of ‘who must do the least attractive jobs?’ has been neglected by both social policy academics and policy‐makers.     

Australian employment services: Help or hindrance in the achievement of mutual obligation?

The concept of mutual obligation underpins Australian employment services. In return for receiving income support, there are three elements of mutual obligation: to actively seek work; to improve one’s competitiveness in the labour market; and to contribute to the community. Failing to undertake mutual obligation activities results in sanctions, usually unemployment benefit suspension or cancellation. In the year 2017/18, one mutual obligation activity, compulsory employment service provider appointments, accounted for more than 93 per cent of sanctions. The study reported here explores unemployed and recently employed workers’ experiences of appointments and their attitudes to the concept of mutual obligation. The findings are that unemployed workers say appointments have little utility for advancing elements of mutual obligation and are psychologically harmful. Non-attendance may be a form of self-protection although seeking a medical exemption or dropping out of the system altogether also appears to be a common self-protection strategy. We also find that non-attendance at appointments cannot be conflated with a negative attitude to mutual obligation and that unemployed workers want services that are effective and psychologically positive to help them to fulfil their mutual obligations.     

LONG-TERM UNEMPLOYMENT,EMPLOYMENT ATTITUDES AND MENTAL HEALTH

The effect of long-term unemployment and employment attitudes on mental health of 99 unemployed people in New Zealand were investigated in 1989 and again one year later. Each participant was interviewed in-depth on employment attitudes, and the General Health Questionnaire-12 (GHQ), the Rosenberg Self-Esteem Scale(RSE) together with a demographic questionnaire were administered. The results indicated that the percentage of people who in 1989 wanted employment and of those who were interested in training had decreased within one year, whereas the percentage of people who stated having alternatives to employment increased. The group who felt unable to work stayed the same in size. Good mental health was associated either with re-employment or with those who had alternatives to employment. Poor mental health was evident in those still wanting employment and in those who felt unable to work. The implications of these findings regarding governmental policies are outlined.     

Working to get fired? Unemployment benefits and employment duration

In many countries, jobseekers are entitled to unemployment benefits (UBs) only if they have previously worked a minimum period of time. This institutional feature creates a sharp change in the disutility from unemployment at UB eligibility and may distort the duration of jobs. In this paper, we evaluate this eligibility effect using a regression discontinuity approach. Our evidence is based on longitudinal social security data from Portugal, where jobseekers are required to work a relatively long period to collect UBs. We find that monthly transitions from employment to unemployment increase by 10% as soon as the eligibility condition is met. This result is driven entirely by transitions to subsidised unemployment, which increase by 20%, as non-subsidised unemployment is not affected. The effects are even larger for the unemployed with high UB replacement ratios or those who meet the eligibility condition from multiple short employment spells. These transitions deserve greater attention from UB agencies and public employment services.     

Psychological Weil-Being Among Unemployed and Employed People After a Company Closedown: A Longitudinal Study

In a three-year longitudinal study, we examined the effects of unemployment and the fear of becoming unemployed on the psychological well-being of 1153 employees at a shipyard that was closed down, and a control group of 441 employees from another, operative shipyard. On all three questionnaires, unemployed people were significantly lower in psychological well-being than employed people. Change to or from employment was significantly associated with changes in psychological well-being, whereas remaining employed or unemployed did not lead to any systematic changes in psychological well-being. Among employed people, the fear of unemployment was strongly associated with reduced psychological well-being. Thus, the health-related consequences of unemployment affect not only the unemployed but also employed people who have little job security. Consequently, we stress the need to create new workplaces and to implement reforms that can reduce job insecurity in the labor market.     

Unemployment insurance in Bulgaria and other East European countries: The transition to a market economy

Unemployment places those it affects in a situation of dependency on unemployment benefits. The regulation of that dependency and the measures necessary to avert it, in Bulgaria (and also in other East European countries) during the period of transition to a market economy, forms the subject of labour and social insurance legislation relating to unemployment and introduced on a temporary basis. Unemployment insurance benefits (unemployment benefits in cash, unemployment assistance, social assistance) are provided for limited periods fixed in the light of the nature of the benefit, the causes of unemployment, the number of years of service, age, gender and other factors. The degree of dependency of unemployed persons on such benefits is also determined by the level of those benefits. The principal categories of legal instruments by which that dependency can be averted or reduced are (1) contributions by the State to the establishment of labour law relationships by providing information to unemployed persons on job vacancies, vocational training and retraining measures, job creation measures and placement; (2) incentives to employers to maintain existing jobs and to create new ones (credits, exemption from interest payments, etc.).     

The Time‐related Underemployment of Lone Parents during Welfare Reform,Recession and Austerity: A Challenge to In‐work Conditionality?

Reforms to UK social security benefits introduced between 2008 and 2012 that increased lone parent obligations to enter employment coincided with economic crisis and government austerity. Increases in underemployment in the broader population during this period both in terms of unemployment and time‐related underemployment raise questions regarding the extent to which lone parents not only managed to enter paid work but obtain a sufficient number of employment hours. Activation policies have increased labour market exposure at a time of greater underemployment. At the same time, high levels of economic hardship, in the context of stagnant real wage growth and benefit cuts linked to broader austerity policy, could place additional pressures on lone parent time‐related underemployment where a desire for greater employment hours to improve household income is not met by availability. We present findings showing disproportionately high growth in time‐related underemployment among lone mothers with, at peak, around one in five employed lone mothers with a youngest dependent child aged over five experiencing such underemployment. The implications to in‐work conditionality policies and the roll out of the UK's new working age benefit Universal Credit are highlighted.     

Labour market integration of unemployed youth from a life course perspective: the case of Norway

The aim of this article is to analyse the labour market integration of previously unemployed youth in a life course perspective. 'Work, Lifestyle and Health' is a longitudinal panel survey following a sample of nearly 2,000 individuals who are representative of the Norwegian cohorts born between 1965 and 1968. The survey was first conducted in 1985 with follow-ups in 1987, 1989, 1993 and again in 2003. Unemployment among young people does not necessarily lead to marginalisation and social exclusion. Long-term effects will be dependent upon how the youths cope with unemployment, the duration of the unemployment period, their mental health status and educational qualifications. Many young unemployed people are not entitled to unemployment benefits because they lack work experience. Consequently, they are dependent on support from their family and/or social assistance. However, there is still much to learn about the long-term consequences of youth unemployment, e.g. whether or not the youths have received social assistance and what are the long-term consequences for their future labour market career and labour market integration.     

Income Protection Through Direct Employment Programmes: Recent Concepts and Examples from Latin America

The risk of unemployment in Latin America is high. Unemployment insurance exists only in a few countries; coverage is small, and virtually non-existent in the informal economy. For this reason social protection policies for unemployed workers, defined in the broad sense, have addressed and strengthened the role of direct employment programmes and assistance through cash subsidies. This article describes the main features (financing and administration) of direct employment programmes in the region and their objectives, and evaluates their functioning in terms of targets and coverage, costs and impact. Available studies show that the net direct impact of such programmes on unemployment rates and on beneficiaries' incomes is in most cases relatively low. Nevertheless, in some cases they have helped to lower levels of unemployment and poverty, and have indirect positive effects that are more difficult to measure, such as incentives to economic recovery resulting from the chain effect on consumption of beneficiaries buying goods. For this reason direct employment programmes remain a fully valid mechanism, especially in social emergencies.     

The perceived fair duration of unemployment benefits for older workers. The role of lifetime achievements in the labour market

The welfare state regulates social policies and reallocates scarce resources. For the social legitimacy of the welfare state, it is important that the public supports the principles underlying this reallocation. This article examines the impact of different activities during the life course on public deservingness perceptions of older unemployed people. In a factorial survey experiment conducted among a random sample of individuals drawn from German administrative employment records, we examine the maximum duration of benefit receipt which is perceived as fair for older unemployed persons with different biographies. The results indicate strong public support for a nexus between previous contributions and benefit entitlements. Besides financial contributions to unemployment insurance, parenting and further training are considered to be ‘lifetime achievements’ which justify longer unemployment benefit receipt. We interpret these findings as an expression of a generalised form of reciprocity which guides perceptions of deservingness regarding older unemployed persons.     

The welfare state as a context for children's development: a study of the effects of unemployment and unemployment protection on reading literacy scores

Data were analysed from the Organization for Economic Cooperation and Development (OECD) Program for International Student Assessment (PISA) to examine whether the relationship between parental unemployment status and child reading literacy is modified by the level of unemployment protection provided by the nation. The sample consisted of 61,946 children, nested in 3,918 schools among 17 market economies. The results of multi-level analyses indicated that, after controlling for a range of individual, family and school covariates, children with unemployed fathers in all countries had significantly lower reading literacy scores than those of employed fathers (β = −8.84, SE = 2.01). The contextual effect of unemployment protection was not significant after accounting for fathers' employment status (β = −18.63, SE = 16.26). However, there was a significant negative interaction between unemployment protection and fathers' unemployment, yielding the unexpected suggestion that, in countries with higher levels of unemployment protection, children with unemployed fathers fare worse, both in relation to children with unemployed fathers in lower protection countries, and in comparison with children with employed fathers (β = −26.96, SE = 8.08). Possible explanations are advanced for this result, including the potential for a 'discouraged child effect' arising from the potential association between unemployment protection and higher local unemployment rates (though unemployment rates at the national level were not significant).     

Depressive Symptoms and Economic Outcomes of Low-Income Women: A Review of the Social Causation, Social Selection, and Interactionist Hypotheses

We review research that connects depression and depressive symptoms to employment and economic factors for low-income women. Women who have low incomes and are unemployed or underemployed are vulnerable to mental health distress. The strain of balancing work and family life can be exacerbated by poor psychological health or nonsufficient economic resources. Research on the barriers that impede self-sufficiency can lead to policies that improve the economic and psychological health of low-income populations.
The discussion is framed by contrasting evidence for three theoretical perspectives: the social causation, social selection, and interactionist (bidirectional) hypotheses. The only causal relation reported is an effect of increased income on reduced depressive symptoms. Yet strong associations are found among psychological distress, earnings, employment stability, income, and job characteristics. The effects of programs to increase employment and the benefits of (and barriers to) depression treatment are also discussed. A bidirectional or interactionist perspective best conceptualizes the relationship between depression and economic factors. The reported negative effects of both poor mental well-being and low-quality employment suggest the need for stronger policies in the areas of mental health and work supports. We present policy recommendations addressing mental health treatment and outreach, employment placement, and workplace flexibility.     

Personal financial situation during unemployment and mental health

The main purpose of this study was to investigate the personal financial situation during unemployment and the connection between financial situation and mental health in a sample ( n =213) of unemployed Norwegians. The results indicate that the unemployed suffered high financial deprivation compared with their own subjective standards, their situation when working, their neighbors and friends, and the average population. However, the unemployed did not constitute a homogeneous group in financial terms. In particular, the young unemployed experienced substantial financial problems. Among men, the reduction in income, few leisure facilities and many financial adjustments were closely related to mental health problems. Women who experienced that their income was substantially reduced compared with that of neighbors and friends and women who had carried out many financial adjustments were in poorer mental health than the other women in the sample. The findings are discussed in relation to relevant aspects of the life situation of the unemployed and other research results.     

Unemployment, shame and ill health — an exploratory study

Unemployed young people in six Swedish municipalities were studied in respect of the degree of shaming elements experienced by them in their social environment and in respect of mental ill health. The nature of the investigation was exploratory. The study shows that experience of shaming elements in the environment owing to unemployment is relatively frequent. A larger proportion of the long-term unemployed and men account for more shaming elements than do the short-term unemployed and women. It seems as if the factor of shaming elements in the environment is important in order to understand the adverse health-related consequences of unemployment. A greater proportion of those who live in a more shaming environment show mental disorders, deteriorated health, changes in living habits, activities and social relations, than do those living in a less shaming environment. This report discusses possible explanations of the results in the light of existing moral concepts of work and unemployment, as well as of shaming attitudes towards the unemployed.     

Coping with long–term unemployment: economic security, labour market integration and well–being. Results from a Danish panel study, 1994–1999

On the basis of a Danish panel study of the long–term unemployed 1994–1999, the article challenges core premises underlying labour market reforms, assigning too high a priority to work and work incentives, and too little priority to social protection. Economic hardship has become widespread among long–term unemployed even in Denmark, and this is a more serious threat against well–being than unemployment as such. Generous social security, denounced as 'passive support', enables the unemployed to cope with their situation, and there are no signs of any 'dependency culture'. Incentives in terms of economic hardship may stimulate active job seeking but the panel study reveals that it has no positive effect on subsequent labour market integration.     

Underemployment among Mexican-origin women

The authors compare the determinants of three forms of marginal employment between Mexican-origin and white women: unemployment, involuntary part-time employment, and working poverty. They address two main questions. First, are there differences between Mexican-origin and white women in the propensity for unemployment, involuntary part-time employment, and working poverty? Second, do the effects of personal characteristics and job location on underemployment vary by ethnicity? Data are drawn from the Annual Social and Economic (ASEC) Supplement File of the 2005 Current Population Survey (CPS). Using multinomial logistic regression models, we show that ethnicity matters in the likelihood of working poverty but not for the other forms of underemployment. Results also reveal that the effects of personal attributes and job location on the likelihood of unemployment, involuntary part-time employment, and working poverty vary for each ethnic group, leading to a double disadvantage for working poor Mexican-origin women.