Click here to skip to content

Welfare Reform on the Web (September 2011): Social security - overseas

The benefits trap: barriers to employment experienced by SSA beneficiaries

M.F. Olney and C. Lyle

Rehabilitation Counselling Bulletin, vol. 54, 2011, p. 197-209

Working age adults with disabilities constitute a small but growing proportion of those who benefit from US Social Security Administration (SSA) entitlement programmes. The employment rate for people with disabilities has steadily declined since the 1980s as claimants seek to hang on to their benefits by staying poor. At best, they will undertake low-paid part-time work. This paper tells the story of eight SSA beneficiaries over two years, all of whom professed a desire to work. At the end of the two years, only one of the eight had left benefits and become self-supporting. The research confirmed that participants were wary of the SSA and afraid to lose the safety net of benefits. Five of the eight deliberately kept their earnings low to maintain their monthly cheques and medical benefits.

Can activating labour market policy offset the detrimental life satisfaction effect of unemployment

M. Wulfgramm

Socio-Economic Review, vol.9, 2011, p. 477-501

Job loss and, in particular prolonged periods of unemployment, have been found to cause not only financial hardship but also considerable drops in life satisfaction. Governments have developed activation programmes to alleviate the adverse effects of unemployment, but there have been few studies of their psychological impacts. This study conducts an empirical analysis based on panel data on the influence of the largest German activation measure, One-Euro-Jobs, on the reported life satisfaction of welfare recipients. The results show that this activation scheme cannot fully substitute for regular employment in terms of life satisfaction. One-Euro-Job participants are among the least satisfied individuals in Germany. However, participation in the scheme is connected to a significantly higher level of life satisfaction than being an openly unemployed welfare recipient.

Does mental health affect continued participation in the workfare program? The South Korean case

T.K. Yoo and S.H. Lee

International Social Work, vol. 54, 2011, p. 551-564

The Self-Sufficiency Program (SSP) is a pivotal workfare scheme in South Korea that assists economically disadvantaged people who are capable of working but unlikely to be employed. For those who are less employable, the goal of self-sufficiency is more likely to be achieved if they remain in the scheme long enough to improve their job related skills. Although mental health problems are thought to be widespread among the poor, the Korean workfare system does not take account of participants’ psychological capability to work or engage with the SSP. This study investigated the impact of mental health on SSP clients’ continued participation in the programme. Results showed that individuals with poor mental health were four times as likely as those without mental health problems to leave workfare programmes for negative reasons. Strategies need to be developed for mental health screening and service provision, referral and monitoring among South Korean workfare programme participants.

Explaining declining social assistance participation rates: a longitudinal analysis of Manitoba administrative population data

H. Stevens, W. Simpson and S. Frankel

Canadian Public Policy, vol. 37, 2011, p.163-181

This paper analyses social assistance participation for the period 1999 to 2008 using monthly micro-level administrative data from Manitoba, which include a rich set of social assistance programme and socio-demographic characteristics for all adult recipients during this period. These data are supplemented with monthly Labour Force Survey data to determine the size of the population eligible for social assistance in order to calculate monthly participation and entry rates. The analysis provides evidence of a rising proportion of the caseload comprised of persons with a disability. This growth is associated with a reduction in the exit rate from social assistance. Because people with disabilities often face barriers to labour market participation beyond their control, this compositional change signals a new trend in social assistance dependency and a challenge for social policy that has relied on keeping benefit rates low to discourage use.

Marketising social protection in Europe: two distinct paths and their impact on social inequalities

P. Frericks

International Journal of Sociology and Social Policy, vol. 31, 2011, p. 319-334

Social protection design has changed dramatically in all European countries since the early 1990s due to the emerging demand for more autonomy for citizens and considerations of cost containment. Analysis of the various social policy reforms reveals two very different experiments in partially outsourcing public social protection to the market. The two paths which different European welfare states have taken in partly outsourcing formerly public social protection to non-public providers are:

  • the fragmentation of social protection through personal savings accounts
  • the amalgamation of social protection through life-course savings schemes.

The first offers a very diverse range of single insurances policies. The other path offers a unified scheme meant to cover all kinds of ‘time outs’ from the labour market.

Poverty, social movements and community health: the campaign for the Special Diet Allowance in Ontario

J. Shantz

Journal of Poverty and Social Justice, vol.19, 2011, p. 145-158

Social assistance rates in Canada are not sufficient to ensure food security for low income Canadians, and poor people are at risk of malnutrition. Recently a grassroots movement, involving anti-poverty activists and health professionals, has emerged in Toronto around the Special Diet Allowance for social assistance recipients. Initiated by the Ontario Coalition Against Poverty, the broad coalition has called on medical professionals to sign a public call for the Special Diet Allowance to be released, as a matter of public health, to everyone receiving welfare and the Ontario Disability Support Program. This paper offers a discussion of this vital new campaign, which organises politically around the intersection of poverty and health. It examines the day-to-day practices of the campaign and its coalition of poor people and health professionals as well as the broader implications of the movement for healthcare.

The redistributional impact of Canada’s Employment Insurance programme, 1992-2002

R. Finnie and I. Irvine

Canadian Public Policy, vol. 37, 2011, p. 201-218

For a decade or so starting in the early 1990s, Canada’s major income support programmes underwent significant reforms, triggered mainly by the growth of the debt-to-GDP ratio of governments (federal plus provincial) to over 100 percent, but also by a sense that the system had to provide greater work incentives. These reforms included substantial changes to the Employment Insurance system. The net effect of these changes was tightened access and reduced benefits, to the point where the programme was running with surpluses of contributions over payouts of several billion dollars. This paper focuses on the redistributive effects of Employment Insurance from 1992 to 2002, a period over which the programme underwent significant reform and the national unemployment rate varied form a high of 12% at the beginning to a low of 7% in the later years. Results show that, despite the reduced payouts and contributions after 1992, and despite being a regressive tax on the contribution side, the programme was redistributive on both the contribution and the benefit sides throughout the period covered, especially with respect to the earnings of individuals, and somewhat less so for family income.

Techniques of innovative policy making: example of National Rural Employment Guarantee Act in India

S. Shome

International Journal of Public Administration, vol.34, 2011, p. 267-278

The National Rural Employment Guarantee Act initially came into force in 2006 in 200 of the most underdeveloped districts in India. It was subsequently extended to cover the whole country. The Act aims to enhance the livelihood security of rural households by providing at least one hundred days of paid employment every year to every rural household whose members volunteer for manual work. The intention is also to reduce the flow of rural-urban migration, curb child labour, alleviate poverty and improve village life by building roads, cleaning up water tanks, etc. This Act represents a novel approach to policy making and demonstrates the positive role that governments can play in labour markets.

Under which conditions does spending on active labor market policies increase? An FsQCA analysis of 53 governments between 1985 and 2003

B. Vis

European Political Science Review, vol. 3, 2011, p. 229-252

Active labour market policies (ALMPs) are a central plank of social policy in established democracies. Given that they are expensive and unlikely to win a government many votes, this study hypothesises that an improving socio-economic situation is a necessary condition for increased spending. Analysis of data from 53 governments of 18 established democracies between 1985 and 2003 showed that there are different routes towards activation and that an improving socio-economic situation is needed for each of them. Specifically, governments activate under decreasing unemployment combined with 1) trade openness; 2) the absence of corporatism in the case of leftist governments; or 3) the presence of corporatism in the case of rightist governments.

Using deprivation to assess the adequacy of Australian social security payments

P. Saunders and M. Wong

Journal of Poverty and Social Justice, vol.19, 2011, p. 91-101

This paper draws on the first comprehensive Australian study of deprivation to illustrate how the deprivation approach can provide valuable benchmarks for assessing the relative adequacy of various forms of social security payment. The comparisons do not depend on making assumptions about relative needs (implied by the use of an equivalence scale) or on wider judgements about the operational meaning of adequacy (implicit in the use of a poverty line). The fact that deprivation is identified by drawing on community perceptions about which items are essential gives more credibility to the estimates than those based on arbitrary poverty lines. The results provide a convincing case that the structure of social security payments in Australia does not meet the needs of different groups equally adequately. Although the findings can be used to support a case for raising the Age Pension, they present an even stronger case for raising benefits paid to those with a disability, those who are unemployed and sole parents. They also suggest that the increases paid to pensioners in 2009 following the 2008 pension review could have been better targeted.

Why don’t eligible firms claim hiring subsidies? The role of job duration

S. Hamersma

Economic Inquiry, vol.49, 2011, p. 916-934

For over thirty years, the US federal government has encouraged firms to hire disadvantaged workers by allowing those with qualified employees to claim tax credits, namely the Work Opportunity Tax Credit (WOTC) and the Welfare-to-Work Tax Credit (WtW). However, only a minority of firms claim the subsidies for which they qualify. This research investigates the relationship between a firm’s WOTC/WtW participation and worker hours requirements, which tightly link subsidy rates to job duration of qualified employees. In the period studied, 1999-2002, a firm qualified for the WOTC only if an eligible worker remained employed for 120 hours, and the subsidy rate increased if the worker exceeded 400 hours. As expected, the results show that firms with a larger fraction of workers exceeding the programmes’ job duration thresholds are more likely to claim the WOTC/WtW. No evidence was found of firms systematically modifying the job duration of their workers to maximise subsidy payments.

Search Welfare Reform on the Web