Budapest Working Papers on the Labour Market BWP - 2008/1
Using the 2004 income survey of the Hungarian Central Statistical Office we consider the targeting of two types of unemployment-related benefits: a) unemployment insurance and re-training benefits and b) the unemloyment assistance (UA). The evidence suggests that unemployment-related benefits are relatively well-targeted in the sense that most of this kind of income support go to persons at the bottom of income ladder, although those in deep poverty are benefiting less. The income-redistribution exercises we have performed show that removing these benefits would negatively affect the position of persons at the bottom of the income distribution resulting in a higher poverty rate, and that redistributing these benefits in favour of the members of the original bottom or the two bottom deciles would ameliorate their income position and reduce the rate of poverty. We have also examined whether persons entitled to unemloyment assistance (the most important means-tested benefit in Hungary) would benefit from this type of income support, and whether local labour market conditions influence the probability of receiving UA. We have found that persons meeting eligibility criteria (personal and household income levels) have a better chance to receive UA, and that local rates of unemployment also have a positive effect on getting this type of income support.
distribution income inequality targeting unemployment-related benefits income transfers