Minimum income schemes in Europe: Is there a trade-off with activation policies?

Iacono, Robe o A icle Minimum income schemes in Eu ope: Is he e a ade-o wi h ac i a ion policies? IZA Jou nal o Eu opean Labo S udies P o ided in Coope a ion wi h: IZA – Ins i u e o Labo Economics Sugges ed Ci a ion: Iacono, Robe o (2017) : Minimum income schemes in Eu ope: Is he e a ade- o wi h ac i a ion policies?, IZA Jou nal o Eu opean Labo S udies, ISSN 2193-9012, Sp inge , Heidelbe g, Vol. 6, Iss. 1, pp. 1-15, h ps://doi.o g/10.1186/s40174-016-0073-2 This Ve sion is a ailable a : h ps://hdl.handle.ne /10419/195018 S anda d-Nu zungsbedingungen: Die Dokumen e au EconS o dü en zu eigenen wissenscha lichen Zwecken und zum P i a geb auch gespeiche und kopie we den. Sie dü en die Dokumen e nich ü ö en liche ode komme zielle Zwecke e iel äl igen, ö en lich auss ellen, ö en lich zugänglich machen, e eiben ode ande wei ig nu zen. 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Robe o Iacono Co espondence: [email p o ec ed] Depa men o Applied Social Science, No wegian Uni e si y o Science and Technology (NTNU), 7491 T ondheim, No way Abs ac This pape makes wo con ibu ions o he li e a u e. Fi s , by employing a mac o- le el ins i u ional da ase on bene i le els o social assis ance (SA) and minimum income p o ec ion (MIP) in 22 Eu opean coun ies in he pe iod 1990–2013, I show ha he adequacy o income suppo o low-income inac i e indi iduals in Eu opean wel a e s a es has been s eadily dec easing since 1994. Second, he pape e isi s empi ically he hypo hesis o a ade-o be ween he adequacy o ou -o - wo k bene i s and he public expendi u e on ac i e labo ma ke policies (ALMPs). The empi ical esul s o he ixed e ec s model show ha he ade-o does no appea o be signi ican in any o he es ed speci ica ions. The esul s a e obus o he in oduc ion o a se o con en ional con ols ela ed o he labo ma ke . JEL Classi ica ion: H53, H55, I38. Keywo ds: Social assis ance, Minimum income p o ec ion, Ac i e labo ma ke policies, Eu opean wel a e s a es 1 In oduc ion This pape add esses he ela ionship be ween he adequacy o minimum sa e y-ne s and he inc eased ocus on ac i a ion s a egies in labo ma ke policies in Eu opean wel a e s a es. To which ex en can he e ec i eness o ac i a ion policies go hand in hand wi h o e ing adequa e le els o minimum income p o ec ion (MIP, he ea e ) and social assis ance (SA, he ea e )? On he one hand, do minimum income schemes ha e o be in eg a ed in he o e all ac i a ion amewo k and hence educed in magni- ude in o de no o dis o wo k incen i es? On he o he hand, how o achie e ha balance whils ensu ing ha minimum income schemes do no end up c ea ing po e y aps? These b oad ques ions lie behind he empi ical analysis o he cu en pape , which aims a es ing wo opposi e wo king hypo heses on he issue. I has o be poin ed ou ha , ins ead o aking a no ma i e s and on he balance be ween ac i a ion and ou -o -wo k bene i s, he cu en s udy aims a showing wha has been he ac ual p ac ice in Eu opean wel a e s a es om 1990 o 2013. Imme oll (2012) has analyzed he policy design and e ec i eness o minimum in- come bene i s in OECD coun ies. Nelson (2013) has explo ed he ques ion o o which ex en social assis ance in Eu opean wel a e s a es p o ides p o ec ion agains low income. On he o he hand, a me a-analysis o he li e a u e on ac i a ion s a - egies implemen ed in labo ma ke s o OECD coun ies has been p o ided by Ca d e al. (2010). The in e ac ion be ween ac i a ion and income suppo has been IZA Jou nal o Eu opean Labo S udie s © The Au ho (s). 2017 Open Access This a icle is dis ibu ed unde he e ms o he C ea i e Commons A ibu ion 4.0 In e na ional License (h p://c ea i ecommons.o g/licenses/by/4.0/), which pe mi s un es ic ed use, dis ibu ion, and ep oduc ion in any medium, p o ided you gi e app op ia e c edi o he o iginal au ho (s) and he sou ce, p o ide a link o he C ea i e Commons license, and indica e i changes we e made. Iacono IZA Jou nal o Eu opean Labo S udies (2017) 6:1 DOI 10.1186/s40174-016-0073-2 in es iga ed by Imme oll and Sca pe a (2012), ad oca ing o an e ec i e policy mix based on he igh balance be ween ac i a ion, income suppo , and wo k incen i es. In he economic li e a u e, Besley and Coa e (1992) ha e analyzed his issue by explo ing he incen i e case o wo k a e. Thei conclusion is ha , o he e o be a de e en a - gumen o wo k a e (i.e., o he bene i s o a educed numbe o poo exceeding he induced o al cos s o wo k a e), he go e nmen will ha e o impose signi ican ly mo e han a small wo k equi emen . Molande and To s ik (2015) in es iga e and analyze om a no ma i e poin o iew he main a gumen s jus i ying implemen a ion o manda o y ac i a ion o bene i ecipien s. The ou a gumen s highligh ed and com- pa a i ely e alua ed a e e iciency, sus ainabili y, pa e nalism, and jus ice. All hese im- po an con ibu ions in he economic and social policy li e a u e p o ided he g ound o he de elopmen o he esea ch ques ion o his pape , which is in oduced as ollows. A concep ual amewo k is ou lined in he nex sec ion in o de o ame he wo wo king hypo heses which a e subsequen ly es ed in he empi ical analysis. The amewo k is cons i u ed by he “disincen i e” iew p esc ibing low ou -o - wo k bene i s pa allel o a high expendi u e on ac i e labo ma ke policies (ALMPs, he ea e ) and by he “gene osi y” iew, which would ins ead complemen he high expendi u e on ALMPs wi h highe bene i le els. Hence, he main e- sea ch ques ion a ises as such: which o hese wo “ iews”o wo king hypo heses a esuppo edby heda aonminimumincomeschemesandexpendi u eonac i- a ion o Eu opean wel a e s a es? The main con ibu ions o he pape a e summa ized as ollows. Fi s ly, by employing he da ase on bene i le els o SA and minimum income p o ec ion (MIP) in 22 Eu opean coun ies in he pe iod 1990–2013, he desc ip i e empi ical analysis indi- ca es a ma ked educ ion as ega ds he adequacy o income suppo o inac i e low- income indi iduals in Eu opean wel a e s a es since 1994. This s ylized ac , seemingly p o iding ini ial suppo o he “disincen i e” iew, cons i u es he g ound o he p o- ceeding o he analysis on he in e ac ion o p o ision o ou -o -wo k bene i s wi h ac i- a ion. Second, he pape es s empi ically he null hypo hesis o he p esence o a ade-o be ween he adequacy o bene i le els and he agg ega e expendi u e on ALMPs. The empi ical analysis posi s di e en speci ica ions o he ixed e ec s model, in o de o gua an ee obus ness o he esul s. The esul s indica e ha he ade-o does no appea o be signi ican , in any o he es ed speci ica ions. Whene e signi i- can , he sign o he coe icien indica ing a co a ia ion be ween ou -o -wo k bene i s and expendi u e on ac i a ion is sligh ly posi i e. In o he wo ds, he “gene osi y” iew seems o ecei e suppo om he da a, indica ing ha i is he o e all expendi u e and deg ee o gene osi y o he wel a e s a es ha ma e s. A gene ous wel a e s a e will p o ide bo h high ou -o -wo k bene i s and high expendi u e on ac i a ion, whils a less gene ous one will cu on he bene i s wi hou in es ing in ac i a ion. These esul s a e p o en obus o he in oduc ion o a se o con en ional con ols ela ed o he labo ma ke . The pape p oceeds as ollows. In Sec ion 2, he concep ual amewo k is ou lined. The da a and he s ylized ac s a e p esen ed in Sec ion 3, whils Sec ion 4 desc ibes he empi ical analysis. Sec ion 5 p esen s he esul s, whils Sec ion 6 discusses hem in ligh o he concep ual amewo k. Sec ion 7 concludes. Iacono IZA Jou nal o Eu opean Labo S udies (2017) 6:1 Page 2 o 15 2 Concep ual amewo k This sec ion aims a p esen ing he concep ual amewo k which will be empi ically es ed in he es o he a icle. The ac ual ela ionship be ween social assis ance and minimum income p o ec ion, in gene al de ined as minimum income schemes (MISs, he ea e ) o ou -o -wo k bene i s, and ac i a ion policies is pinned down by go e n- men au ho i ies, mainly based on wo coun e ac ing conside a ions. [1]On one side, he “disincen i e” iew p esc ibes ha bene i s mus be kep low no o dis o wo k incen i es, so ha inac i e low-income indi iduals would ake pa in ac i a ion p og ams a he han elying on passi e bene i s. Hence, assuming ha he au ho i ies ake in o accoun his ade-o o a ep esen a i e (a e age) bene i ecei e , we should as a esul obse e a ade-o be ween bene i s and ac i a ion a he mac o-ins i u ional le el as well. F aze and Ma lie (2009) in hei o e iew abou he adequacy o MISs ac oss EU membe s a es include a de ailed lis o he speci ic disincen i es o ake up wo k o inac i e indi iduals. The s ylized ac o inc eased obliga ions o wel a e ecipien s a he Eu opean le el, join ly wi h he e osion o ou -o -wo k bene i le els, has been highligh ed as he po en ial ealiza ion o a ade-o be ween ac i a ion and bene i s in Nelson (2013) o he pe iod 1990–2007 in 19 Eu opean coun ies. The cu en pape aims a es ing his hypo hesis o ade-o agains he ollowing al e na i e hypo hesis. [2]On he o he hand, Eu opean coun ies in he las decades aimed a combining a s a egy o po e y educ ion o indi iduals who a e no wo king, join ly wi h p omo ion o e u n o employmen (OECD, 2005). This join s a egy, which I label as he “gene osi y” iew, would co espond o a policy o main aining (o e en inc easing) he cu en le els o adequacy o income suppo whils inc easing expendi u e on ALMPs. This iew is backed-up by F aze and Ma lie (2009), who p o ide a lis o policy-o ien ed sugges ions o EU membe s a es, and p ecisely add ess he s a egy o a oid disincen i e e ec s whils a he same ime ensu ing adequacy o MISs. Which o hese wo wo king hypo heses ha e p e ailed in he ac ual policy making o he Eu opean coun ies’au ho i ies in he yea s 1990–2013? In o de o gi e a en a i e answe o his empi ical ques ion, I u n o he da a in he nex sec ion. 3 Da a and s ylized ac s A i s , he s udy aims a p esen ing some s ylized ac s ela ed o social assis ance (SA) and minimum income p o ec ion (MIP) bene i s in Eu ope. The da ase u ilized in his wo k is he social assis ance and minimum income p o ec ion (SAMIP) da ase , which includes de ailed compa able in o ma ion on he bene i le els o indi iduals e- cei ing income suppo in a la ge numbe o Eu opean coun ies, o he yea s 1990– 2013. The ull SAMIP da ase con ains bene i le els o h ee ypical households: a single pe son, a lone pa en , and a wo pa en amily. Howe e , his s udy ocuses ex- clusi ely on he single pe son case, whils he wo o he households a e excluded due o missing da a ( o he ull pe iod 1990–2013) on mean equi alized income necessa y o compu e he abo emen ioned adequacy measu es. 1 Iacono IZA Jou nal o Eu opean Labo S udies (2017) 6:1 Page 3 o 15 The SA a es om he SAMIP da ase employed in his s udy a e denomina ed in local cu ency, o a single adul pe son below e i emen age and wi hou child en, ex- cluding o ins ance housing cos s and o he bene i s. The MIP le els build on he SA a es, by including housing cos s and o he bene i s. The SA and MIP bene i le els o a o al o 22 Eu opean coun ies (Aus ia, Belgium, Czech Republic, Denma k, Es onia, Finland, F ance, Ge many, Hunga y, I eland, I aly, Luxembou g, Ne he lands, No way, Poland, Po ugal, Slo akia, Slo enia, Spain, Sweden, Swi ze land, Uni ed Kingdom) a e hen s anda dized by ei he GDP pe capi a o by a e age annual wages, 2 p o iding an in e na ionally compa able p oxy o he adequacy o ela i e “gene osi y”o ou -o - wo k bene i s in a gi en coun y. The main a iables in he da ase used o he empi - ical analysis o his wo k a e summa ized in Table 1. The s ylized ac s abou he se ies on adequacy o SA and MIP a e p esen ed below. Figu e 1 shows an o e all dec easing endency o he median adequacy o social assis - ance in Eu opean coun ies. The u n om a sligh upwa d endency o a dec easing one akes place a ound yea 1994, om which SA adequacy ine i ably declines un il yea 2005, emaining s able om hen onwa ds. As shown in Fig. 2, a ia ion ac oss coun ies appea s o be wide o he adequacy o MIP as compa ed o ha o SA. In addi ion, we obse e a endency owa ds a lowe a e age and median le el o bo h schemes in 2013 as compa ed o 1990. In o he wo ds, Figs. 1 and 2 indica e ha bo h SA and MIP adequacies ha e been educed a he o e all Eu opean le el. The hypo hesis ha his esul has been endogenously d i en by con empo aneous g ow h in GDP pe capi a is ele an o he coun ies aken indi idually, bu becomes less plausible a he c oss-coun y le el. Ano he s ylized ac is p o ided by simply ocusing on he 1990–2013 se ies o he sample a iance o SA adequacy o he 22 Eu opean coun ies included in he analysis. Figu e 3 plo s his ime se ies, compu ed by using yea ly SA a es. As shown in Fig. 3, a e an ini ial pe iod 1990–2000 wi h signi ican jumps in he a iance o SA adequacy, he pe iod om 2000 onwa ds p esen s an app oxima ely cons an le el among Eu opean coun ies (a se o s anda d uni - oo es s ha e been conduc ed as well, ejec ing he uni - oo null hypo hesis a he 95% con idence le el). This e idence applies o bo h measu es o adequacy, independen ly o whe he he de- nomina o is gi en by GDP pe capi a o a e age annual wages. A ho ough empi ical analysis o he issue o con e gence o di e gence as ega ds he pa h o SA adequacy Table 1 Summa y s a is ics o he main a iables in he da ase Obs. Mean S d. de . Min Max SA/GDP pe capi a 490 0.1905 0.0657 0.0535 0.4344 SA/a g. annual wages 482 0.1797 0.0540 0.0611 0.3414 MIP/GDP pe capi a 489 0.2707 0.0899 0.1036 0.5054 MIP/a g. annual wages 482 0.2572 0.0832 0.1066 0.5364 ALMP (as % o GDP) 467 2.0488 1.249 0.15 7.07 T ade union densi y 508 35.898 20.511 5.6543 83.862 To al employmen index 377 94.732 11.823 52.206 146.27 Unemploymen (% o labo o ce) 516 8.0393 4.2666 0.4689 26.187 No e. Da a sou ces. (1) OECD.S a (2016) o : GDP pe capi a a cu en p ices; a e age annual wages; ALMP as % o GDP; ade union densi y; o al employmen index; unemploymen as % o labo o ce. (2) SAMIP (2016) da ase o : SA a es; MIP a es Iacono IZA Jou nal o Eu opean Labo S udies (2017) 6:1 Page 4 o 15 among Eu opean coun ies lies ou side he scope o his pape . Howe e , i has o be poin ed ou ha Nelson (2008) analyzed ends and le els o minimum income p o ec- ion in Eu ope o he pe iod 1990–2005 and his esul s poin in he di ec ion o a con- e ging pa h. How does he p e ious li e a u e explain he dec easing le el o adequacy o SA and MIP om a ound 1994 onwa ds? Ma chal e al. (2016) ha e highligh ed he ole o aus- e i y in o de o ob ain a causal explana ion o his e enchmen in he gene osi y de- g ee o SA and MIP since he 1990s. The cu en s udy, a he han e isi ing he analysis o he undamen al de e minan s o ou -o -wo k bene i le els, aims ins ead a explo ing he ela ionship be ween adequacy o bene i s and ac i a ion policies a he c oss-coun y le el, as explained in he concep ual amewo k o he p e ious sec ion. Le us u n now o he s ylized ac s on ac i a ion policies, p ima ily aimed a b ing- ing indi iduals back o employmen . Due o high he e ogenei y ac oss coun ies in he app oaches o ac i a ion as documen ed by Escude o (2015) and o he speci ic e- sea ch ques ion unde analysis, his wo k ocuses on he agg ega e alue gi en by coun- ies’public expendi u e on ALMPs as a pe cen age o GDP. Ma in John (2014) has 0.1 .2 .3 .4 Social Assis ance adequacy, yea ly 1990 1995 2000 2005 2010 2015 Yea Fig. 1 Social Assis ance adequacy, 1990–2013. No e: social assis ance (SA) yea ly a es s anda dized by GDP pe capi a o 22 Eu opean coun ies in he yea s 1990–2013 .1 .2 .3 .4 .5 MIP adequacy, yea ly 1990 1995 2000 2005 2010 2015 Yea Fig. 2 Minimum income p o ec ion adequacy, 1990–2013. No e: minimum income p o ec ion (MIP) yea ly a es s anda dized by GDP pe capi a o 22 Eu opean coun ies in he yea s 1990–2013 Iacono IZA Jou nal o Eu opean Labo S udies (2017) 6:1 Page 5 o 15 ex ensi ely documen ed he e idence o an inc ease in public expendi u e ela ed o ac- i e labo ma ke policies (ALMPs) in Eu opean coun ies in he las decades, also in ela ion o hei e ec i eness. The abo e e idence (Figs. 1 and 2) o dec easing SA and MIP adequacy combined wi h a sus ained public expendi u e in ALMPs pins down he esea ch ques ion o his pape , which aims a in es iga ing he alidi y o he abo e- men ioned wo king hypo heses based on he “disincen i e”o “gene osi y” iews. Le us obse e in Fig. 4 he join sca e plo o bo h SA and MIP adequacy and he ac ion o GDP spen on ALMPs. Figu e 4 poin s o a somewha posi i e ela ionship be ween bo h SA ( ed) and MIP (blue) adequacy and he ac ion o GDP dedica ed o ALMPs. The in es iga ion o he ac ual ela ionship be ween hese a iables will be he main ask o he ollowing sec- ions whe e he empi ical analysis is conduc ed. 4 Empi ical s a egy The ela ionships I es ima ed a e ep esen ed by he ollowing pai o log-log al e na i e speci ica ions: SAj; ¼ajþβ þγALMPj; þθ0 j; φþ∈j; ;ð1Þ .002 .003 .004 .005 .006 .007 Va iance SA / GDP p.c. 1990 1995 2000 2005 2010 2015 Yea Fig. 3 Sample a iance o Social assis ance adequacy, 1990–2013 0.1 .2 .3 .4 .5 0 2 4 6 8 ALMP % o GDP (OECD) MIP adequacy SA adequacy Fig. 4 SA and MIP adequacy and ALMPs, 1990–2013 Iacono IZA Jou nal o Eu opean Labo S udies (2017) 6:1 Page 6 o 15 MIPj; ¼δjþπ þτALMPj; þμ0 j; ρþ∈j; ;ð2Þ in which SA j, in (1) and MIP j, in (2) a e espec i ely he log o SA and MIP adequacy a iables o coun y j, s anda dized ei he by GDP pe capi a o by a e age annual wages; 3 a j and δ j a e dummy a iables es ima ing coun y ixed e ec s; β and π es ima e ime ixed e ec s; ALMP j, ep esen s he log o he ac ion o GDP in es ed in ac i e labo ma ke policies o coun y j; θ’ j, and μ’ j, include a se o con en ional co a ia es e- la ed o labo ma ke ins i u ions ( ade union densi y, o al employmen , unemploymen as a % o he labo o ce); and ∈ j, a e e o e ms adjus ed o coun y clus e ing. As ega ds he choice o he speci ic con ol a iables, ade union densi y (TUD, he ea e ) has been included based on he ollowing logic. Assume o ins ance ha he esul s indica e a ade-o be ween ou -o -wo k bene i s and ALMPs so o con i m he “disincen i e” iew. The expec ed posi i e e ec o highe TUD on he wages o he low-skilled labo o ce would po en ially make ou -o -wo k bene i s ela i ely less ap- pealing o hese wo ke s, hence con ibu ing o mi iga e he signi icance and obus - ness o he ade-o wi h ac i a ion policies. Fo each o he wo adequacy measu es, models (1) and (2) we e es ima ed a i s by pooled OLS wi h s anda d e o s clus e ed by coun ies. Subsequen ly, he dummy a - iables es ima ing coun y and ime ixed e ec s we e in oduced. A las , in o de o ake in o accoun as well o he hypo hesis o au oco ela ion in he idiosync a ic e o e ms, (1) and (2) we e es ima ed in he p esence o AR (1) dis u bance. A ema k abou endogenei y issues has o be done he e. Gi en he speci ica ions o (1) and (2) and he policy a iables a hand, he isk o endogenei y does no allow o exclude he p esence o e e se causali y a his s age. Howe e , his does no need o ully in alida e he esea ch ques ion o he cu en s udy. On one side, esul s indica - ing weak signi icance o he e ec o ALMPs on SA/MIP would o ins ance gi e e i- dence in he di ec ion o dis ega ding he “disincen i e” iew men ioned abo e, since ha hypo hesis equi es a s ongly signi ican in e se ela ionship o be con i med. On he o he hand, in case o posi i e and signi ican ela ionship be ween SA/MIP ad- equacy and ALMPs, he e idence would lead o a p e e ence o he “gene osi y” iew, ega dless o he unde lying di ec ion o causali y. In o he wo ds, he aim o he cu en explo a o y s udy is o open he ield o u u e esea ch on his speci ic ela- ionship, which should also be suppo ed by analyses a he wi hin-coun y le el o which a mo e powe ul iden i ica ion s a egy and a highe le el o de ail can be ob- ained. The esul s o he di e en es ima ions a e p esen ed in he nex sec ion. 5 Econome ic esul s Tables 2, 3, 4, and 5 below epo he e ec s o he expendi u e o ALMPs on he SA and MIP adequacy a iables as speci ied by (1) and (2) and es ima ed by pooled OLS wi h clus e ed s anda d e o s, o each o he wo s anda diza ions (ei he GDP pe capi a in Tables 2 and 3 o a e age annual wages in Tables 4 and 5). The OLS coe icien s in Tables 2, 3, 4, and 5 a e elas ici ies; hence, hey show he ex- pec ed pe cen age change o SA/MIP adequacy when he ac ion o GDP de o ed o ALMPs inc eases by 1%. A i s look a hese in oduc o y esul s indica e ha ALMPs ha e a posi i e and signi ican e ec on bo h SA and MIP adequacy, wi h he la e be- ing s ongly signi ican when all con ols a e included as well. The magni ude o he Iacono IZA Jou nal o Eu opean Labo S udies (2017) 6:1 Page 7 o 15 e ec does no o e come he 0.3% o he ini ial adequacy a es (in o he wo ds, an elas- ici y o 0.3). As p edic ed in he p e ious sec ion, he in oduc ion o TUD as a con ol has he e ec o educing he impac o ALMPs on adequacy a es, indica ing ha he ela ionship becomes milde wi h highe wages o he low-skilled indi iduals. These esul s migh be biased by ime-in a ian and coun y-speci ic ac o s simul- aneously a ec ing he dependen a iable and he eg esso s. Hence, we mo e o he ixed e ec s (FE, he ea e ) model speci ica ion which con ols o all he ac oss- coun y ac ion, in o de o exploi he wi hin-coun y a ia ion o e ime. Tables 6, 7, 8, and 9 below epo now he e ec s o he expendi u e o ALMPs on he SA/MIP adequacy a iables as es ima ed by he FE model, o each o he wo s an- da diza ions (ei he GDP pe capi a in Tables 6 and 7 o a e age annual wages in Tables 8 and 9). The FE esul s o he abo e Tables 6, 7, 8, and 9 indica e ha , mos ly o he case o he SA adequacy (unde bo h he possible s anda diza ions), he signi icance o he pooled OLS coe icien s was due o some unobse able ime-in a ian and coun y spe- ci ic a iable, which has been now aken away by he FE dummies. When i comes o he MIP adequacy, he e ec s o ALMPs a e sligh ly less signi ican , howe e mos ly o he same magni ude as in he simple pooled OLS models. No ice ha , un il now, none Table 2 Log-log model es ima ed by pooled OLS wi h clus e ed s anda d e o s (1) (2) (3) (4) SAGDP SAGDP SAGDP SAGDP ALMP (% o GDP) 0.253 *** 0.207 *** 0.149 ** 0.0915 (0.0687) (0.0545) (0.0560) (0.102) T ade union densi y 0.393 *** 0.348 * 0.360 * (0.0977) (0.142) (0.147) To al employmen −0.399 −0.384 (0.236) (0.227) Unemploymen (% o LF) 0.0778 (0.0946) Obs. 445 440 318 318 Clus e ed s anda d e o s in pa en heses, * p< 0.05, ** p< 0.01, *** p< 0.001 Table 3 Log-log model es ima ed by pooled OLS wi h clus e ed s anda d e o s (1) (2) (3) (4) MIPGDP MIPGDP MIPGDP MIPGDP ALMP (% o GDP) 0.294 *** 0.262 *** 0.239 *** 0.189 *** (0.0548) (0.0436) (0.0393) (0.0405) T ade union densi y 0.237 ** 0.216 * 0.223 ** (0.0786) (0.0843) (0.0839) To al employmen −0.402 −0.392 (0.217) (0.202) Unemploymen (% o LF) 0.0671 (0.0565) Obs. 445 440 318 318 Clus e ed s anda d e o s in pa en heses, * p< 0.05, ** p< 0.01, *** p< 0.001 Iacono IZA Jou nal o Eu opean Labo S udies (2017) 6:1 Page 8 o 15 Nelson K (2008) Minimum income p o ec ion and Eu opean in eg a ion: ends and le els o minimum bene i s in compa a i e pe spec i e, 1990-2005. In J Heal h Se 38(1):103–124 Nelson K (2013) Social assis ance and EU po e y h esholds 1990-2008. A e Eu opean wel a e sys ems p o iding jus and ai p o ec ion agains low income? Eu Sociol Re 29(2):386–401. doi:10.1093/es /jc 080e OECD (2005) Inc easing inancial incen i es o wo k: he ole o in-wo k bene i s. OECD Employmen Ou look. Pa is. h ps://www.oecd.o g/els/emp/36780865.pd . Accessed 20 Sep 2016 OECD.S a (2016) h p://s a s.oecd.o g/. Accessed 24 Sep 2016 SAMIP (2016) h p://www.so i.su.se/spin/. Accessed 20 Sep 2016 Submi you manusc ip o a jou nal and benefi om: 7 Con enien online submission 7 Rigo ous pee e iew 7 Immedia e publica ion on accep ance 7 Open access: a icles eely a ailable online 7 High isibili y wi hin he fi eld 7 Re aining he copy igh o you a icle Submi you nex manusc ip a 7 sp inge open.com Iacono IZA Jou nal o Eu opean Labo S udies (2017) 6:1 Page 15 o 15