Unemployment, Employment and Social Exclusion

Unemployment has become one of the most serious social and economic problems in Europe. In 1997, every tenth member of the EU labour force was unemployed; nearly half of these were long-term unemployed. Nearly four out of ten Europeans of working age were unemployed or otherwise outside the employment; 149 million people (60,5 percent) were employed (SEC (1998) 1668). Europe has thus been plagued by high unemployment and low employment rates, as well as slow growth in the number of the employed in comparison with other OECD countries. The connections between unemployment and the threat of social exclusion can be estimated by establishing how common or deep poverty is among the employed and the unemployed. This is the first aim of this article. The article also seeks to establish possible differences between social policy models in this respect. The fact that poverty is equally common or rare among the unemployed and the employed can be due to many factors. Small differences may be due to income transfers that effectively combat poverty even in the absence of income from work. On the other hand, small differences can also be due to high poverty risks not only among the unemployed but also among the employed whose income from work is insufficient. The second aim of this article is to assess the extent to which income transfers prevent poverty in different social policy models.