Do Tax-Benefit Packages Treat Families in the Same Manner When Unemployment Strikes?

Abstract

Social protection against unemployment is on the European agenda because of the economic crisis. Since European family patterns have changed over the last three decades, the social protection for unemployment may be very different during this economic crisis from what it was previously. In particular the combination of more diverse families and high unemployment raises the general question of how today’s systems of social protection cater for different types of families and income groups. Based on a micro-simulation analysis, this article examines how, and to what extent, packages of social security provide support for various types of unemployed families at different income levels. The comparison is between four countries representing different welfare state models and dominant family types. Using the OECD Tax-Benefit model, the article surveys the disposable income and provides a breakdown of benefits for different family types facing unemployment. It takes into account housing costs and childcare costs, and the benefits related to them. The analysis shows that unemployed families experience different levels of support depending not only on the country they live in, but also on their income level and family type. Often differences between families at different income levels within countries are larger than differences between families at the same income level between countries. The analysis illustrates how important it is to look beyond unemployment insurance and include family related benefits to understand the support provided to families faced with unemployment.