Receiving Assistance in Material Need versus Active Participation in the Labour market: Who Will Win?
Receiving Assistance in Material Need versus Active Participation in the Labour market: Who Will Win?

Summary/Abstract: The paper focuses on identifying the main factors affecting the motivation of labour market participation in connection to the system of assistance in material need and the subsistence minimum. The results of the analysis show that (i) assistance in material need itself lowers the motivation to work, but in Slovakia, the difference between net household income from work after finding a job and the net social income during unemployment is increasing in time; (ii) households with incomes below the subsistence minimum react to these changes most sensitively; and (iii) increases in the assistance in material need negatively affect the motivation to work, especially in those individuals for whom the additional benefit from work is relatively low, i.e., people with a low level of education and mothers with dependent children.

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