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Benefits and wages

Do cash transfers prevent families from income poverty? Does work pay? By how much does family income drop during unemployment? The Benefit and Wages database provides a large number of timely tax-benefit indicators that allows monitoring progress on recent tax-benefit reforms and comparing benefit generosity and work incentives across countries, years and family circumstances. The indicators use output from the OECD tax-benefit model, which enables international comparisons of how tax liabilities and benefit entitlements shape the disposable income of working-age families.

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Keywords: unemployment, benefit, income, replacement rate, child, care, cost, expense, work, minimum, work, employment

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  • Benefits in unemployment, share of previous income

    This indicator measures the proportion of previous in-work household income maintained after 2, 6, 12, 24 and 60 months of unemployment. Calculations refer to a single person without children whose previous in-work earnings were 67% of the average wage.

  • Adequacy of minimum income benefits

    This indicator measures the income of jobless families relying on guaranteed minimum income benefits as a percentage of the median disposable income in the country. Housing supplements are included subject to relevant eligibility conditions.

  • Financial disincentive to return to work

    This indicator measures the percentage of earnings lost to either higher taxes or lower benefits when a jobseeker returns to work after two months of unemployment. Calculations refer to a person with two children whose partner works full-time at 67% of the average wage.

  • Working hours needed to exit poverty

    This indicator measures the weekly hours that a family claiming guaranteed minimum benefit needs to work to exit poverty. The measure is expressed for three hourly wage rates. The poverty line is calculated as 50% of the median disposable income in the country.

  • Financial disincentive to increase working hours

    This indicator measures the percentage of earnings lost to either higher taxes or lower benefits when a family member increases working hours from 50% to full-time work. Calculations refer to a person with two children whose partner works full-time at 67% of the average wage.

  • Net childcare costs

    This indicator measures the net childcare costs for parents using full-time centre-based childcare, after any benefits designed to reduce the gross childcare fees. Childcare benefits can be received in the form of childcare allowances, tax concessions, fee rebates and increases in other benefit entitlements. Net childcare costs are calculated for both couples and lone parents assuming two children aged 2 and 3. For couples, one parent earns 67% of the average wage whereas the other earns either minimum wage, 67% or 100% of the average wage.

  • Financial disincentive to enter employment with childcare costs

    This indicator measures the percentage of earnings lost to either higher taxes or lower benefits when a parent of two children takes up full-time employment and uses centre-based childcare. Calculations refer to a couple with two children aged 2 and 3 where the other parent works full-time at 67% of the average wage.

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