There is currently a discussion in Austria about reforming unemployment benefits. Scandinavian countries are often touted as role models. Protection against dismissal is generally more relaxed in Scandinavia – but you can also find your way back to a job more quickly. At first glance, the support is higher, everything inclusive but only slightly better.
The unemployment rate is currently lower in Denmark than in Austria, but higher in Finland and Sweden. But that alone is not meaningful, says Lukas Lehner, who researches labor market topics at Oxford University. It is noticeable that in Denmark, according to the OECD, around 20 percent, in Sweden even 30 percent of all unemployed people look for a job for less than a month.
In Austria, not even ten percent find their way back to work as quickly. Around half of the unemployed in Denmark, Sweden and Finland find a job within three months, in Austria this only applies to a little more than a third of those affected.
Part of the unemployed no longer employable
On the other hand, the proportion of long-term unemployed in Austria is significantly higher. According to the OECD, 12 to 17 percent of the unemployed in the three Scandinavian countries have been unemployed for more than a year, and 24 percent in Austria. All in all, you lose your job in Scandinavia than in Austria, but you get back to work more quickly. Whether that is good or bad is not so easy to answer. In the end, people in Austria have more “company-specific skills”, says Lehner. In Scandinavia, people rely more on transferable, general know-how.
Ultimately, one has to agree that some of the unemployed, says Lehner, who is also involved in the Lower Austrian “Marienthal job guarantee model”, in which all long-term jobs are offered a job.
Therefore, one must also think about the long-term security of the people. It is precisely this topic that is currently being discussed controversially in Austria, under the heading of “degressive” unemployment benefits – also support that is high at the beginning but then falls. Here, too, Scandinavian countries serve as role models.
Big differences in the country comparison
But it is also worth taking a closer look, recommends Lehner. The “net replacement rate”, ie unemployment benefits as a proportion of the last net income, is currently being discussed. This is a constant 55 percent in Austria, with the switch to emergency aid, however, the support decreases, the OECD assumes 51 percent after the first year. In Denmark, on the other hand, the support started much more generously, namely at 82 percent. In Sweden there is 69 percent at the beginning, in Finland only 58 percent and thus hardly more than in Austria.
If one compares the situation after two years, the Danes are still at the percent of the last net income, whereas the Swedes have only 59 percent since the 6th month of their unemployment, the Finns when when & with only 31. In the long term, the support in Denmark falls to 50 percent, also about the same level as the Austrian emergency aid.
These figures, however, only reflect part of the truth, because the picture changes if you add other social benefits – those who die in unemployment are often not cut, says Lehner. If you take a single parent with two children, according to OECD figures, this comes to a net replacement rate of 76 percent, which is hardly less than in Denmark (88 percent), Finland (82 percent) or Sweden (77 percent).
However, Lehner emphasizes that comparing the level of net replacement rates over the duration of unemployment is not enough. Social security goes much further than just money. “Social security has to do with whether I can say no to the current job,” said Lehner. Whether you also have an alternative and can switch. Because if you can’t do that, you remain dependent on the employer and the current working conditions. (apa)