Which Duration of Unemployment Benefits is Considered Just?

This blog is based on an article in Social Policy and Society by Christopher Osiander, Monika Senghaas, Gesine Stephan, Olaf Struck and Richard Wolff. Click here to access the article.

Welfare states allocate and redistribute scarce resources to and from various social groups. Citizens of welfare states have ideas about who should receive what kind of financial support and how much they should receive. These ideas are rooted in notions of fairness and deservingness. Our work focuses on a specific example of financial benefits in modern welfare states – the duration of unemployment benefits – and the following research question: which duration of unemployment benefits is considered as being just for which group of jobseekers? We show that different criteria such as age, reasons for unemployment, employment history and household context matter when it comes to the perceived just duration of unemployment benefits.

The theoretical basis of our article is the deservingness approach. In a nutshell, this approach postulates that people use different criteria as heuristics to judge who is deserving of welfare support and if so, to what extent. We use five heuristics: control over the situation, attitude, reciprocity, identity, and need. People who are perceived as not being in (1) control are usually considered more deserving, so are people with the (2) “right” attitude to work, those who are believed to have (3) “contributed” their share to society, those who are perceived as (4) “insiders or similar” to the evaluators, or (5) those who are perceived as particularly needy.

The empirical basis of our study is a combination of survey and administrative data: we drew a random sample of individuals from German register data of the Federal Employment Agency and asked them to participate in an online survey. We use a special survey technique, the so-called factorial survey experiment: These survey experiments consist of vignettes, i.e. descriptions of situations, persons or objects that are given to respondents to evaluate them. The central characteristics of the scenarios are randomly varied (like in an experiment) which makes it possible to identify the causal effect of these characteristics on the respondents’ evaluations. In our case, we describe jobseekers who receive unemployment insurance benefits with different sex, age, reasons for unemployment, employment histories, household contexts and spouse’s income. See the example below (words in italics were also highlighted in the survey):

“A forty-eight-year-old woman has recently become unemployed. Her employment contract was not extended because she was often late. She has been regularly employed since the age of twenty-two and has paid unemployment insurance contributions. She takes care of her father, who is in need of care. Her husband can partly cover their household’s needs with his income.”

Age, reason for unemployment, employment history, the household context and spouse’s income reflect different criteria of deservingness such as reciprocity, control and need. We expect that the maximum durations of unemployment benefit receipt considered vary with the perceived deservingness of the jobseekers described in our vignettes. Across all scenarios, respondents empirically granted unemployment benefits for about twenty-two months on average, the median being somewhat lower at eighteen months. As we theoretically expected, respondents are more generous to older jobseekers. For example, unemployed persons aged sixty are granted additional six months of unemployment benefits compared to forty-eight-year old persons (our youngest group). Continuous employment in the past is also rewarded with an additional five and a half months compared to irregular employment. Moreover, jobseekers who have raised children in the past are granted unemployment benefits for about a month longer than those without children., When the fictitious jobseekers currently provide care activities for older relatives in the household, respondents considered an additional benefit duration of three-and-a-half months as just.

In addition, unemployed persons who were laid off because the company went bankrupt are considered as more deserving when compared to unemployed persons who lost their jobs because they were often late for work. Respondents grant the former group about three-and-a-half months of additional unemployment benefits. The result underlines the importance of attributing responsibility to unemployed individuals for the situation they are in. Moreover, respondents take the financial situation of the household into account. Respondents are slightly less generous to unemployed persons whose spouse can partly cover the household’s financial needs (almost 1 month less), than to those whose spouse does not provide additional income. Respondents become even more restrictive if a person’s spouse can fully cover the household’s needs: in this case they reduce the fair unemployment benefit duration by about four months. Last but not least, a jobseeker’s sex does not affect respondents’ evaluations.

When we look at respondents’ characteristics, we can also see some interesting effects. Randomly selected respondents who we informed about the current legal regulations in Germany are less generous than the respondents without this information. Male respondents are more generous than female respondents, so are respondents with a preference for Germany’s left-wing party. In contrast, people from Eastern Germany are more restrictive than those from Western Germany. Individuals who have already received German means-tested basic income benefits are somewhat more generous than those who have never received those benefits. This might reflect experiences with difficulties arising from low household incomes and might also be associated with a self-interest for more generous social policies.

In summary, this particularly interesting case analyzes deservingness perceptions concerning the duration of unemployment insurance benefits. Our study shows that there is public support for different maximum unemployment benefit durations for specific groups. Therefore, the unemployed are not perceived as an equally deserving group. Instead, judgments regarding just benefit durations vary along the criteria of reciprocity, control, attitude and need. It is remarkable hat citizens balance these different criteria in relation to one another. 

Lastly, the institutional architecture of the welfare state may also shape common perceptions of what is just. Institutions convey a certain sense of the ‘appropriate’ and the ‘adequate’. Perceptions of deservingness may vary between social policy programs, such as contribution-based social insurance and means-tested social assistance. Cross-national studies with varying institutional rules on the duration of unemployment benefits or studies comparing different national social policy programs are needed to shed more light on this aspect in future research.

About the authors

Christopher Osiander is Senior Researcher at the Institute for Employment Research, Nuremberg.

Monika Senghaas is Senior Researcher at the Institute for Employment Research, Nuremberg.

Gesine Stephan is head of the research department “Active Labour Market Policies and Integration” at the Institute for Employment Research, Nuremberg, and Professor of Economics, in particular Empirical Microeconomics, at the University of Erlangen-Nuremberg.

Olaf Struck is Professor of Labour Studies at the University of Bamberg.

Richard Wolff is Junior Researcher at the University of Bamberg.

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