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Economics

Unemployment Replacement Rates Dataset

The unemployment replacement rate data set, assembled by Olaf Van Vliet & Koen Caminada (version 1, January 2012), provides data on unemployment benefit schemes in 34 welfare states from the 1970s until 2009. The current data set includes all 27 member states of the European Union and 7 non-EU OECD countries.

The unemployment replacement rate data set, assembled by Olaf van Vliet & Koen Caminada (version 1, January 2012), provides data on unemployment benefit schemes in 34 welfare states from the 1970s until 2009. The data set updates, extends and modifies Scruggs’ dataset (2004). The current data set includes all 27 member states of the European Union and 7 non-EU OECD countries for the period 1971-2009. The codebook contains descriptions of the variables included as well as country-specific sources and notes. Details regarding individual observations are provided in the data file.

  •  Documentation 
    - Aim, origin of the idea, definition, time series, country profiles, descriptives
    - Codebook
    - Country notes

  •  Database  

Countries
Australia, Austria, Belgium, Bulgaria, Canada, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Lithuania, Latvia, Luxembourg, Malta, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Spain, Slovak Republic, Slovenia, Sweden, Switzerland, United Kingdom, United States.

Program
The dataset and codebook contain information on unemployment insurance. Data is provided for net unemployment replacement rates, gross unemployment replacement rates, gross unemployment benefits, taxes, social security contributions, average wages and net average wages for two family types.

Time Period
Information on unemployment replacement rates is in most cases provided for 1970-2009. For the 18 countries that were originally included in Scruggs’ data set, data is added for the period 2000-2009. The data for 1970-1999 for these countries are taken from Scruggs (2004). Information on new added countries is provided for 1979-2009 with the exception that for some Eastern European countries information was only available for 1990-2009. 

Family types
The dataset distinguishes between two different family types. The first family type is a single person without children earning 100 percent of the average wage before getting unemployed. The second family type is a married couple. The breadwinner earned 100 percent of the average wage before getting unemployed. The couple has two children, one younger than 12 and one older than 12 years old.

Average Production Worker wage (APW)/Average Worker wage (AW)
The calculation of replacement rates is based on average wage levels. For this wage level, the wage of the Average Production Worker has been used, which is provided in OECD Taxing Wages editions. The OECD has made a fundamental change in the approach of the average wages. The classical approach of calculating the average wage was the average wage of a production worker. In a historical perspective, the wage level in the production/manufacturing industry gave a good indication of the average wage in a country, since this was often the largest sector in a country. In more recent years, other sectors grew in size and the wage of the production worker was not representative anymore for the average wage level. Therefore, the OECD came up with a new concept for the average wage: the AW, which stands for ‘average worker wage’. The transition from APW to AW started in 2005 and the AW is available from 2000 onwards. The APW data is available for all years up to 2005 and for the year 2007. Hence, there is no consistent time series for the period 1971-2009. In order to have a consistent replacement rate time series, we calculated the APW for the years 2006, 2008 and 2009 based on the growth rate of the AW. Furthermore, the data set also includes replacement rates based on the AW, albeit only for the period 2000-2009. 

Methodology
The calculations of the replacement rate are in line with Scruggs’ (2004) method. This method follows the methods developed by the OECD to a large extent. The OECD follows assumes a 6 month unemployment spell, which means that the yearly unemployment benefits are calculated as two times an unemployment spell of 6 months. This implies that when a country scheme changes after six months, this change is not incorporated the data.

One difference between Scruggs data set and the OECD is the treatment of housing assistance. In the OECD approach of calculating replacement rates, housing assistance is included, in Scruggs’ data not. Including the housing assistance leads to higher replacement rates. In the current data set, we follow Scruggs’ approach. The reason is that this results in consistent times series for 1971-2009. 

Data File
The data file is presented in a Microsoft excel 2003 spreadsheet file. Each tab contains a country and each tab includes two parts, for each family type one. The file is organized to be printer friendly. 

Citation
Reference to the data may be made to: Olaf Van Vliet & Koen Caminada (2012), ‘Unemployment replacement rates dataset among 34 welfare states 1971-2009: An update, extension and modification of the Scruggs’ Welfare State Entitlements Data Set’, NEUJOBS Special Report No. 2, Leiden University.

Questions / contact
Any questions about the Unemployment replacement rates dataset may be addressed to Olaf Van Vliet, Economics Department, Leiden University, PO Box 9520, 2300 RA Leiden, The Netherlands.

Recent papers and publications based on the Unemployment Replacement Rate Data

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