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Patterns of welfare-to-employment transitions of Croatian Guaranteed Minimum Benefit recipients: a preliminary study

Author

Listed:
  • Teo Matkovic

    (Faculty of Law, University of Zagreb, Zagreb, Croatia)

  • Dinka Caha

    (Centre for Social Welfare Pozega, Pozega, Croatia)

Abstract

In this paper we explore the transitions of social assistance beneficiaries to employment in Croatia. Data was sourced from the social welfare register for 208 persons from the 2015 cohort of new, unemployed social assistance recipients in one Centre for Social Welfare, their outcomes tracked until June 2017. About a quarter of the recipients became employed within one year, in most cases with wages slightly higher than the statutory minimum. Out of them, about a quarter relapsed into social assistance status within a year. Following the World Bank Employment Barriers approach, we examine whether outcomes are associated with disincentives to work (inactivity trap), lack of work-related capabilities, or gendered engagement with in-household work. We found the average participation tax rate (PTR) for recipients to stand at 57%, yet no effect of PTR, benefit level, debt or PTR level on transition to employment was identified. With respect to capabilities, the role of human capital (vocational in particular), work experience and age turned out to be consistent with prior research. Substitution of inhouse work is consistent with the finding that women are less likely to get employed if living in a household with dependents.

Suggested Citation

  • Teo Matkovic & Dinka Caha, 2017. "Patterns of welfare-to-employment transitions of Croatian Guaranteed Minimum Benefit recipients: a preliminary study," Public Sector Economics, Institute of Public Finance, vol. 41(3), pages 335-358.
    • Handle: RePEc:ipf:psejou:v:41:y:2017:i:3:p:335-358
    DOI: 10.3326/pse.41.3.4
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    References listed on IDEAS

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    1. Xavier Jara Tamayo, Holguer & Gasior, Katrin & Makovec, Mattia, 2017. "Low incentives to work at the extensive and intensive margin in selected EU countries," EUROMOD Working Papers EM3/17, EUROMOD at the Institute for Social and Economic Research.
    2. Rodrigo Fernandez & Herwig Immervoll & Daniele Pacifico & Céline Thévenot, 2016. "Faces of joblessness: Characterising employment barriers to inform policy," OECD Social, Employment and Migration Working Papers 192, OECD Publishing.
    3. Slavko Bezeredi & Ivica Urban, 2016. "Predicting gross wages of non-employed persons in Croatia," Financial Theory and Practice, Institute of Public Finance, vol. 40(1), pages 1-61.
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    Cited by:

    1. Alexandru Avram & Marco Benvenuto & Costin Daniel Avram & Ginevra Gravili, 2019. "Assuring SME’s Sustainable Competitiveness in the Digital Era: A Labor Policy between Guaranteed Minimum Wage and ICT Skill Mismatch," Sustainability, MDPI, vol. 11(10), pages 1-20, May.
    2. World Bank, 2019. "Growth and Jobs in Slavonia, Baranja, and Srijem," World Bank Publications - Reports 34182, The World Bank Group.

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    More about this item

    Keywords

    welfare-to-employment transitions; social assistance recipients; participation tax rate; employment barriers;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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