Distributional Effects of Unemployment Benefits and the Means Tested Minimum Income

The period between 2010 and 2015 in Austria is characterised by sluggish economic growth, a remarkable rise in unemployment and structural changes in economy and society. The share of households with long-term unemployed members increased from 5.8 percent to 7.6 percent, the share of households with means-tested minimum income doubled from 1.8 percent in 2010 to 3.6 percent in 2015. The means-tested minimum income benefits were concentrated on the lowest income groups and accounted on average for about a quarter of the income in the respective households. Also, about three fourths of unemployment benefits and unemployment assistance went to the lower third of the income distribution and accounted for half of the gross income of affected households there.