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Welfare for the Unemployed in Britain and Germany

Who Benefits?

Frances McGinnity

In recent decades, the problem of unemployment has generated fierce political and academic discussion on how national governments should address this issue. This book sheds light on a key debate in unemployment policy – that of whether unemployment benefits should be insurance-based or means-tested. It carefully compares the impact of the British and German benefit systems on poverty, the duration of unemployment and the spread of workless households during the 1990s.
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Chapter 4: Income Poverty Among the Unemployed

Frances McGinnity


As discussed in Chapter 1, an important issue for many comparative approaches to welfare states is the financial consequences of unemployment. Esping-Andersen (1990) focuses on decommodification and how welfare states replace income from the market, covering the contingency of market failure. Gallie and Paugam (2000) refer specifically to how they expect different types of welfare state to be associated with different levels of poverty among the unemployed. Schmid and Reissert (1996) predict that the welfareoriented systems and insurance-based systems differ in the extent to which they protect the income of the unemployed. The gender typologies discussed are primarily concerned with how welfare states treat men and women differently. One key concern, we argue, is (unemployed) women’s access to an independent income. There is also an emphasis in these typologies on which family or household types are favoured, financially or otherwise, by different types of welfare system (Lewis and Ostner 1994; Daly 1996, 2000). In this chapter we address these issues by comparing financial deprivation among individual unemployed people in Britain and Germany. While there are many consequences of unemployment, the financial consequences are those most directly addressed by cash transfers. This is not to say that other effects of unemployment are not important – unemployment can affect individuals in ways that are non-financial, and a full treatment would look at its impact on psychological distress and on social networks, families and close relationships. Cross-sectional comparative research on life satisfaction suggests that in both Britain and Germany, life satisfaction...

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