Incentive Effects of Selected Elements of the Austrian Unemployment Insurance System

This study examines the potential of selected elements of the Austrian unemployment insurance system to promote the take-up of employment or to perpetuate unemployment. Based on economic theory as well as international and national empirical evidence and considering behavioural changes, the effects of potential reform scenarios (degressive design of the net replacement rate, abolishment of additional earnings without benefit reduction, reduction of unemployed people per case worker) are simulated. The analysis focuses on the effects on the number of recipients, on the level of benefits as well as on the budget allocation for unemployment insurance and the means-tested minimum income (or social assistance) systems.