{"id":26508,"date":"2022-06-10T11:06:21","date_gmt":"2022-06-10T15:06:21","guid":{"rendered":"http:\/\/irishexaminerusa.com\/wp\/?p=26508"},"modified":"2022-06-10T11:06:24","modified_gmt":"2022-06-10T15:06:24","slug":"esri-issues-warning-over-linking-unemployment-benefits-to-previous-earnings","status":"publish","type":"post","link":"https:\/\/irishexaminerusa.com\/wp\/?p=26508","title":{"rendered":"ESRI Issues Warning Over Linking Unemployment Benefits To Previous Earnings"},"content":{"rendered":"\n
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The Economic and Social Research Institute said the move would give rise to weaker financial work incentives unless capped or time-limited (PA)<\/em><\/figcaption><\/figure>\n\n\n\n

Linking unemployment benefits to previous earnings would give rise to weaker financial work incentives unless capped or time-limited, research has found.<\/p>\n\n\n\n

The Economic and Social Research Institute (ESRI) said there is a \u201ccoherent economic case\u201d for such a move, as set out in the program for Government.<\/p>\n\n\n\n

But it warned that the reform would give rise to a non-trivial cost and weaker financial work incentives unless capped or time-limited.<\/p>\n\n\n\n

The findings were published as part of the ESRI\u2019s annual Budget Perspectives conference, taking place on Friday.<\/p>\n\n\n\n

Ireland is one of the few countries in the European Union without a strong relationship between the unemployment benefit payment and the claimant\u2019s previous level of earnings.<\/p>\n\n\n\n

The research concludes that while such a linkage can provide a short-term cushion for those who lose their job \u2013 allowing them time to adjust spending \u2013 such advantages need to be set against the non-trivial cost and weaker financial work incentives that would arise from adopting such a system.<\/p>\n\n\n\n

The ESRI said setting the rate of jobseeker\u2019s benefit equal to 60 per cent of previous earnings, with the maximum payment per week capped at \u20ac350 per week, equivalent to the rate of the Pandemic Unemployment Payment, would cost an estimated \u20ac280 million more per year.<\/p>\n\n\n\n

The median replacement rate \u2013 an estimate of how much in-work income is replaced by out-of-work income \u2013 would increase by 11 percentage points.<\/p>\n\n\n\n

The gains from such reform are distributed evenly across all income groups, it said.<\/p>\n\n\n\n

Maintaining the income replacement rate at 60 per cent but increasing the maximum payment per week to 60 per cent of the average weekly income, an effective cap of \u20ac460 per week, would cost an estimated \u20ac590 million per year.<\/p>\n\n\n\n

In this case, the median replacement rate would increase by 22 percentage points.<\/p>\n\n\n\n

The ESRI said that, under this reform scenario, higher income individuals would benefit the most, seeing the greatest increase in replacement rates.<\/p>\n\n\n\n

The report also highlighted that there is at least as strong a case for also making maternity benefit and illness benefit pay-related.<\/p>\n\n\n\n

International evidence suggests that linking maternity benefit to previous earnings could help reduce the gender wage gap, while a similar reform to illness benefit could generate public health benefits by incentivizing the employee to stay at home in cases of infectious diseases.<\/p>\n\n\n\n

Theano Kakoulidou, one of the authors of the ESRI report, said: \u201cThe linkage of unemployment payments to previous earnings could provide greater insurance for those who lose their job but requires non-trivial additional spending and worsens financial incentives to work.<\/p>\n\n\n\n

\u201cMaximum payment caps are needed so that the benefits from the reform are distributed in a more equitable manner.\u201d<\/p>\n\n\n\n

Another of the report authors

buy levitra cheap<\/a><\/div> , Michael Doolan, said: \u201cThere is a strong case for linking maternity benefit and illness benefit to previous earnings, with international evidence suggesting that closer linkages between the two would reduce the gender wage gap and provide public health benefits.\u201d<\/p>\n

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