Patterns of welfare-to-employment transitions of Croatian Guaranteed Minimum Benefit recipients: a preliminary study

Matković, Teo; Caha, Dinka

doi:10.3326/pse.41.3.4.

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Patterns of welfare-to-employment transitions of Croatian Guaranteed Minimum Benefit recipients: a preliminary study

Teo Matković*

Teo Matković

Affiliation: Faculty of Law, University of Zagreb, Zagreb, Croatia

0000-0002-3538-1873

Correspondence
teo.matkovic@pravo.hr

Dinka Caha

Dinka Caha

Affiliation: Centre for Social Welfare Požega, Požega, Croatia

0000-0001-6838-503X

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https://doi.org/10.3326/pse.41.3.4

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Patterns of welfare-to-employment transitions of Croatian Guaranteed Minimum Benefit recipients: a preliminary study

Teo Matković, Dinka Caha

https://doi.org/10.3326/pse.41.3.4 | Published online: September 15, 2017

Graph 1
Number of unemployment benefits recipients and GMB recipients from 2003 to 2016

Source: Croatian Employment Service and Ministry of Social Welfare.

Graph 2
Barriers to employment faced by GMB beneficiaries: schematic of theoretical mechanisms involved

Source: Authors, adapted from Fernandez et al. (2016).

Graph 3
Histogram of GMB-related benefits and social transfers including child benefits

Source: SocSkrb, calculation of the authors.

Graph 4
Estimated participation tax rate for taking up a minimum-wage job

Table 1
Outcome of the unemployment episode of GMB recipients

Outcome	%
GMB ceased - in employment	22.3
GMB ceased - household income other than employment	4.3
GMB ceased - employment of another household member	13.5
GMB ceased - not seeking job	4.7
GMB ceased - other (e.g. death, migration, prison…)	8.6
GMB recipient - disability	0.4
GMB recipient - in employment	2.6
Status unchanged as of May-2017	42.9

Source: SocSkrb, calculation of the authors.

Graph 5
Kaplan-Meier failure function: exit into employment (recipient)

Source: SocSkrb, calculation of the authors.

Graph 6
Kaplan-Meier failure function: transitions into employment (recipient), by disincentive for work criteria

Log-rank tests: (1) chi2(3)=3.67; (2) chi2(3)=8.38*; (3) chi2(3)=0.98; (4) chi2(3)=2.10.

Source: SocSkrb, calculation of the authors.

Graph 7
Kaplan-Meier failure function: transitions into employment (recipient), by workrelated capabilities criteria

Log-rank tests: (1) chi2(4)=17.46**; (2) chi2(4)=12.12*; (3) chi2(2)=5.37+; (4) chi2(1)=4.24*.

Source: SocSkrb, calculation of the authors.

Graph 8
Kaplan-Meier failure functions: transitions into employment, by gender and household configuration

Log-rank tests: (Men): chi2(3)=12.09**; (Women): LR test chi2(3)=3.67.

Source: SocSkrb, calculation of the authors.

Graph 9
Wages and realized PTR for GMB recipients who made the transition to employment

Source: SocSkrb, calculation of the authors.

Table 2
Hypothetical PTR, average realized PTR and wage of GMB recipients who made transition to employment, by household type

	Hypothetical PTR for all recipients, % (at 35% avg. wage)	Actual PTR, % (for those who got employed)	Average wage, HRK (for those who got employed
Single person household	52	50	2.831
Single parent household	56	54	3.577
Household with dependents	61	58	3.029
Household without dependants	58	55	2.915
Total		53	2.998

Source: SocSkrb, calculation of the authors.

Graph 10
Kaplan-Meier failure function: relapse from employment into GMB

Source: SocSkrb, calculation of the authors.

Graph 11
Kaplan-Meier failure function: relapse from employment into GMB, by realized participation taxation rate and gender

Log-rank tests: (METR) chi2(1)=3.86*; Gender LR test chi2(1)=4.08*.

Source: SocSkrb, Tax Administration, calculation of the authors.

Table A1
Attributes of individuals and households within the tracked population

Attribute	Individuals % (first episode)	Average PTR for min. wage	% Employed by Jun 2017
Education
No formal education	19	55	12
Compulsory education (ISCED 2)	37	54	15
Vocational education - 3yr (ISCED 3C)	32	60	36
Upper secondary education - 4yr (ISCED 3AB)	11	62	9
Professional tertiary education (ISCED5)	1	71	34
University education (ISCED 6)	0
Prior employment history
No	22	57	11
Up to 1 year	14	56	29
1-5 years	29	58	18
5-10 years	15	55	34
More than 10 years	20	58	17
Unemployment duration (when starting GMB episode)
Less than 6 months	68	56	23
6-12 months	6	64	8
1-3 years	12	58	28
3 or more years	7	57	13
Not required or unknown	7	57	0
Age (as of 2016)
0-17	2	53	0
18-29	22	60	26
30-50	47	57	26
51-64	28	55	9
Gender
Male	57	57	26
Female	43	57	14
Received GMB prior to 2015	53	56	22
Household type
Single household	34	52	18
Single parent	6	56	7
Household with dependents	42	61	24
Household without dependants	18	58	21
Number of dependent children
No	52	54	19
1	19	60	21
2	16	65	21
3 or more	13	55	24
Child - nursery age (0-3)	15	57	19
Debt - account due to debt execution process
Account not blocked	43	57	23
Account blocked - up to 2 min. wages	15	58	23
Account blocked - 2 to up to 12 min. wages	28	58	15
Account blocked - more than 12 min. wages	14	55	20
Estimated participation tax rate for taking up a minimum-wage job
Less than 50%	13	40	15
50-60%	47	53	19
60-70%	29	66	24
More than 70%	11	77	22
Total household benefit level (including child benefit)
Up to HRK 1.000	28	48	21
HRK 1,160 to HRK 1,400	25	55	12
HRK 1,560 to HRK 2,350	23	65	28
HRK 2,390 to HRK 5,037	24	62	22
Total		57	20

Source: SocSkrb, calculation of the authors.

Table A2
Cox regression results: transitions of GMB recipients to employment

	Coeff	Std. Err
Barrier: lack of work-based capacities
Education (ref: No formal education)
Compulsory education (ISCED 2)	0.046	(0.525)
Vocational education - 3yr (ISCED 3C)	1.053*	(0.497)
Upper secondary education - 4yr (ISCED 3AB)	0.354	(0.707)
Professional tertiary education (ISCED5)	1.046	(1.289)
Age (ref: 18-29)
30-50	-0.173	(0.415)
51-64	-1.352	(0.524)
Employment history (at least some tenure)	1.097+	(0.562)
Unemployed <12 months when started receiving GMB	0.344	(0.371)
Prior GMB recipient (received GMB prior to 2015	0.276	(0.310)
Barrier: lack of incentives to work
Bank account blocked (debt greater than 2 minimum wages)	-0.419	(0.305)
Total household benefit level (including child benefit) (per HRK 1,000)	-0.061	(0.209)
Estimated PTR for taking up a minimum--wage job min (per %)	0.007	(0.014)
Barrier: in-household work and care
Gender: Female	-1.791**	(0.576)
Household configuration (ref: 2+ adults, with dependent members)
Single person household	-0.752	(0.506)
Single parent household	0.087	(1.180)
Household without dependants	-0.612	(0.731)
Interaction: gender and household configuration
Female*Single person household	2.419**	(0.794)
Female*Single parent household	0.627	(1.404)
Female*Household without dependants	2.235*	(0.999)
Female*Nursery-age child in household	-0.326	(0.891)
Observations	233
Individuals	202
Events (employment)	58
Log likelihood	-265.4

Source: SocSkrb, calculation of the authors.

This is an Open Access article distributed under a Creative Commons Attribution-NonCommercial 4.0 International License (CC-BY-NC) which permits non commercial use and redistribution, as long as you give appropriate credit, provide a link to the license, and indicate if changes were made.

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