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Simulation of an application of the Hartz-IV reform in Austria
Preliminary communication | Year: 2017 | Pages: 479 - 500 | Volume: 41 | Issue: 4 Received: June 30, 2017 | Accepted: September 13, 2017 | Published online: December 11, 2017
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FULL ARTICLE
FIGURES & DATA
REFERENCES
CROSSMARK POLICY
METRICS
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Gender/children | Unemployment assistance recipients | Members in unemployment-assistance households | Expenditures (related
to unemployment
assistance recipients) | in 1,000 | in % | in 1,000 | in % | in million € | in % | Women | 122 | 41.0 | 270 | 36.6 | 503 | 34.6 | Men | 175 | 59.0 | 296 | 40.2 | 951 | 65.4 | Children | - | - | 171 | 23.2 | - | - | Total | 296 | 100.0 | 736 | 100.0 | 1,454 | 100.0 |
|
Household
type
|
Households
|
Expenditure
|
|
in
1,000
|
in
%
|
in
million €
|
in
%
|
|
Single persons
|
93
|
33.5
|
518
|
35.6
|
|
Couple without children
|
49
|
17.6
|
275
|
18.9
|
|
Other households w/o children*
|
31
|
11.2
|
131
|
9.0
|
|
Single parents
|
19
|
6.9
|
94
|
6.5
|
|
Couple, 1-2 children
|
39
|
14.0
|
179
|
12.3
|
|
Couple, 3+ children
|
16
|
5.9
|
102
|
7.0
|
|
Further households w children**
|
30
|
10.9
|
155
|
10.6
|
|
Total
|
277
|
100.0
|
1,454
|
100.0
|
* Households with more than two adults; ** households with more than two adults and at least one child. Source: Own analysis EU-SILC 2015 (uprated to 2017).
|
Income
types/ paid maintenance
|
Households
|
|
absolute
in 1,000
|
in
% of all 277,000
|
|
Income from work
|
212
|
76.4
|
|
(Other) unemployment benefits
|
207
|
74.7
|
|
Sickness, care benefits
|
155
|
56.0
|
|
Family benefits
|
128
|
46.0
|
|
Capital income
|
117
|
42.2
|
|
Benefits to prevent social exclusion
|
56
|
20.2
|
|
Pensions (incl. for work accidents)
|
56
|
20.2
|
|
Housing benefits
|
53
|
19.1
|
|
Maintenance benefits
|
40
|
14.6
|
|
Income of children <16 years
|
12
|
4.3
|
|
Education benefits
|
10
|
3.8
|
|
Maintenance payments
|
33
|
11.8
|
Scenario | Households in 1.000 | Expenditure in million EUR | Status Quo | Unemployment assistance (UA) | 277 | 1,454 | Benefits against social exclusion/data | 56 | 338 | Total | 277 | 1,792 | Scenario 1: Base without asset check | Minimum income benefit (MIB) simulated | 158 | 781 | Benefits against social exclusion/data | 56 | 338 | MIB simulated plus social exclusion/data (=MIB total) | 179 | 1,119 | Difference unemployment assistance minus. MIB simulated | -119 (-43%) | -673 (-46%) | Difference UA + social exclusion/data minus. MIB total | -98 (-35%) | -673 (-38%) | Scenario 2: Base with asset check capital income | Minimum income benefit simulated | 131 | 670 | Benefits preventing social exclusion/data | 56 | 338 | MIB simulated plus social exclusion/data (=MIB total) | 153 | 1,008 | Difference unemployment assistance minus MIB simulated | -146 (-53%) | -784 (-54%) | Difference UA + social exclusion/data minus MIB total | -124 (-45%) | -784 (-44%) | Scenario 3: Ceiling 1,500 with asset check capital income | Minimum income benefit simulated | 93 | 450 | Benefits preventing social exclusion/data | 42 | 240 | MIB simulated plus social exclusion/data (=MIB total) | 108 | 690 | Difference Unemployment assistance minus MIB simulated | -184 (-66%) | -1,004 (-69%) | Difference UA + social exclusion/data minus MIB total | -169 (-61%) | -1,102 (-61%) |
Gender, children | Original unemployment assistance main recipients | Members in simulated minimum income benefit-households | Expenditure (related to original unemployment assistance main recipients) | in 1,000 | in % | in 1,000 | in % | in million € | in % | Women | 56 | 35.5 | 114 | 32.6 | 247 | 31.6 | Men | 102 | 64.5 | 134 | 38.6 | 534 | 68.4 | Children | - | - | 100 | 28.7 | - | - | Total | 158 | 100,0 | 348 | 100.0 | 781 | 100,0 |
Source: Own analysis with EUROMOD and SORESI.
|
Household
type
|
Households
|
Expenditure
|
|
in
1,000
|
in
%
|
in
million €
|
in
%
|
|
Single persons
|
79
|
49.9
|
348
|
44.6
|
|
Couple without children
|
21
|
13.6
|
139
|
17.8
|
|
Other hh w/o children
|
2
|
1.4
|
20
|
2.6
|
|
Single parents
|
15
|
9.6
|
80
|
10.2
|
|
Couple, 1-2 children
|
21
|
13.1
|
104
|
13.3
|
|
Couple, 3+ children
|
10
|
6.3
|
43
|
5.5
|
|
Other hh w children
|
9
|
6.0
|
48
|
6.1
|
|
Total
|
158
|
100.0
|
781
|
100.0
|
Scenario | hh members w reduced inc. in % all | Loss per capita-inc./year | People at risk of poverty in 1,000 | At-risk-of-poverty rate in % | Poverty Gap in % | Gini | Status quo | - | - | 1,137 | 13 | 19 | 0.26 | Basic without asset check (S1) | 80.8 | -1,344 | 1,223 (+86) | 14 | 19 | 0.26 | Basic with asset check capital income (S2) | 82.2 | -1,536 | 1,229 (+92) | 15 | 20 | 0.27 | Ceiling 1,500 with asset check capital income (S3) | 95.3 | -2,292 | 1,292 (+155) | 15 | 20 | 0.27 |
Source: Own analysis with EUROMOD/SORESI.
Table 1Unemployment assistance: recipients, members in households and total expenditure by women and men (and children) DISPLAY Table
Table 2Unemployment assistance: receiving households and total expenditure by household type DISPLAY Table
Table 3Unemployment-assistance households: (additional) income types and paid maintenance DISPLAY Table
Table 4Status quo (unemployment assistance) and simulated minimum income benefitscenarios: number of households and expenditure DISPLAY Table
Table 5Simulated minimum income benefit (S1): recipients, household members and expenditure by women, men (and children) DISPLAY Table
Table 6Simulated minimum income benefit (S1): households (hh) and expenditure by household type DISPLAY Table
Table 7Status quo (unemployment assistance) and simulated minimum income benefitscenarios: impact on income (inc.), income distribution and risk of poverty DISPLAY Table
* This paper was presented at the conference Social Protection Policies and Microsimulation Workshop hosted by the Institute of Public Finance in Zagreb, 12-13 June 2017. The authors would like to thank to two anonymous referees for their valuable comments and suggestions.
1 Unweighted, the persons/households with unemployment assistance relevant for the analysis are as follows: - 1 households with unemployment assistance recipients: 361; - unemployment assistance recipients: 381; - members in unemployment-assistance households: 895.
2 However, in all Federal States without ceiling for minimum standards, in order to make the differences with respect to Scenario 3 more visible.
3 The difference in estimated values for gross household incomes between national accounts and EU-SILC decreases from 10.8 to 3.6% if incomes from assets are not taken into account. This fact points to the under-recording of incomes from assets in EU-SILC (Statistik Austria,  2016: 51). Thus, the share of households passing the means-test for minimum income benefit in terms of capital income might be over-estimated, although we assume a relatively high interest rate for capital income. However, exclusion from entitlement to minimum income benefit in the case of home ownership (not reported here) showed similar results to the test for capital income.
4 In the federal state of Burgenland for example, also in which a ceiling was also introduced, the amount of the minimum income benefit (and not the total household income) is capped at EUR 1,500 per month. As this regulation shows only a minor additional impact compared to the basic scenario, it is not reported here.
5 The legal explanations justify the monthly ceiling of EUR 1,500 by arguing that the benefit income should not lead to a higher household income than one that would be received from an average employment income. For a household with minimum income benefit as single income source located in Vienna, the ceiling of EUR 1,500 per month would roughly correspond to the minimum standards (incl. basic amount for housing, excl. additional housing allowance) of a couple plus one child.
6 Children are minors who live with at least one adult person in a household. Adult "children" are counted as women or men.
7 Results for other scenarios are available upon request.
8 At the level of the individual household, the number of simulated minimum income benefit months corresponds to the number of original unemployment assistance months, since minimum income benefit can only be received alternatively for these months.
9 In 54% of those 153,000 unemployment-assistance households, which in the basic scenario with asset check (S2) receive simulated minimum income benefit and/or benefits against social exclusion from the SILC data, the average monthly total net household income is above the ceiling of EUR 1,500.
10 Unemployment assistance represents a non-taxable income but is taken into account for the determination of the average tax rate for taxable income.
11 If there is more than one unemployment-assistance recipient per household, the person with the higher number of receiving months was defined as the main beneficiary.
12 In the reform scenarios, 100% take-up of entitled minimum income benefit is assumed (see also Appendix). Numerous research studies (for example, Hernanz, Malherbert and Pellizzari, 2004; Matsaganis, Ozdemir and Ward, 2014; for Austria: Fuchs, 2009) prove that this is a simplifying assumption.
13 Compared to the mean equivalised income of all persons in EU-SILC (uprated to 2017 with policies 2017) before the reform of EUR 26,892, this would imply an average income reduction of 5.0%/8.5%.
14 60% of median income is used as threshold for risk of poverty.
15 Compared to the mean equivalised income of all persons in EU-SILC (uprated to 2017 with policies 2017) before the reform of EUR 26,900, this would imply an average income reduction of 5.0%/8.5%.
16 It is assumed that there is no reason for exclusion from minimum income benefit with regard to the right to permanent residence in case of entitlement to the insurance benefit unemployment assistance (no corresponding information is available in EU-SILC data).
17 For these Federal States, given that other entitlement conditions are provided, special payments were simulated (aliquot) for those households, which show an unemployment assistance receiving period of three or more months in SILC. However, in the SILC data only the unemployment assistance months from the reporting year are shown but not any receiving months already dating from the previous year(s).
18 Estimation of the receiving period for income from work on the basis of the following variables: employment status January-December, annual amount, number of receiving months for income from work, number of receiving months for unemployment assistance in the SILC data.
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December, 2017
IV/2017 |
