For the unemployed, state benefits can be a lifeline while they try to get back on their feet and into a new job.

Image: OECD

But some jobseekers are much more likely to receive benefits than others, depending on which country they live in.

Almost two-thirds of the jobless in Finland get benefits, but in Italy, less than 1 in 10 can expect the same.

Image: Reuters


Huge variation

The OECD Employment Outcome 2018 compares selected countries’ coverage rates and finds that there are huge variations.

Just next door to Finland, Sweden gives benefits to only 21% of its unemployed.

Belgium and France are at the higher end of the coverage scale with 60% and 42% respectively.

Many developed countries provide benefits for less than 15% of their unemployed. In the United States, it’s 12.4% and even lower in Italy at 8.4%.

Across 24 countries, on average fewer than 1 in 4 job-seekers receive unemployment benefits.

Tighter entitlements

Claimants in the Slovak Republic, Turkey and Lithuania need to be employed for at least a year and a half before they can seek benefits.

In other countries, that figure is much lower. Australia only demands six months’ employment and in New Zealand claimants don’t have to have been in work at all.

Some countries demand evidence that the claimant is searching for a job, or fulfill other conditions, to maintain the benefit.

Portugal, Estonia and Luxembourg have the strictest requirements, while Hungary, the Czech Republic and Turkey are among the most lenient.

There are also discrepancies among countries as to which type of unemployed person will receive benefits.

Overall, those who have only been unemployed for a short while are more likely to receive benefits than the unemployed youth.

Income inequality

The OECD says that low rates of benefits exacerbate the income inequality gap within countries.

While benefits rose in the aftermath of the global financial crisis, they dipped soon afterwards. In recent years, a number of governments have tightened entitlement conditions or reduced the duration of benefits.

In the future, the rise of automation and the changing nature of work will mean that governments will have to look again at their safety nets for the unemployed.

Some have suggested that governments will eventually have to provide a universal basic income, but trials have had mixed results.

Unemployment benefits are critical in supporting people while they get back to work.

But they’re also a political hot potato, with many working people believing that others are simply “workshy” and that many benefits are fraudulently claimed.