Generous welfare makes people more likely to want to work

49 comments on “Generous welfare makes people more likely to want to work ”

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1. One Anonymous Bloke 1

   2 April 2015 at 8:06 am

   It’s common sense that people want to give more to a society that values them. As for the poor righties, is there a single belief they hold that hasn’t been comprehensively debunked?
   • Draco T Bastard 1.1

     2 April 2015 at 8:38 am

     As for the poor righties, is there a single belief they hold that hasn’t been comprehensively debunked?

     Can’t think of one offhand.
     • aerobubble 1.1.1

       2 April 2015 at 3:36 pm

       I heard that loss growth always means job losses. Like automation growth means job increases. Its nonsense of course, over simplified by the former ACC minister, discredited yet let back.

       Thatcherism caused a massive collapse in growth as a generationwere told their on their own, that in order to become rich they need to keep their cards close less some rich prick laywers up and steals off.

       We dont even house people who could be called up to fight in future conflicts, its just greed that says we cant afford it.
   • Stephanie Rodgers 1.2

     2 April 2015 at 9:35 am

     And at another level, workers want to give more to an employer who values them!

     It’s almost like when we think about ourselves as part of a community rather than individuals-in-competition we achieve better results. #creepingcommunism
     • tracey 1.2.1

       2 April 2015 at 10:54 am

       There were some surveys doing the round when I was a baby Lawyer. They suggested (this was early 90’s) that many employees, especially women, would rather have their work and efforts acknowledged, thanked than a pay rise. I recalls the two partners I worked for expressing surprise. “Why wouldn’t they want more money” they asked me…

       I said I am sure we all would but feeling valued gives people a boost that money doesn’t always, and it is economical. It didnt change their behaviour however…

       so didnt get more money or thanks.

       😉
       • Stephanie Rodgers 1.2.1.1

         2 April 2015 at 2:17 pm

         Ah, but being the early 90s before the Employment Contracts Act really began to destroy collective bargaining, people’s pay might not have been such an issue as it is now. (I am guessing. I was a wee thing at the time.)
         • tracey 1.2.1.1.1

           2 April 2015 at 3:22 pm

           Gender inequaltiy was a big issue. The survey (I should have been clearer) was from the Women Lawyers Association. I was hired about 6 months before another young (male) lawyer. He and I graduated from the same year at Auckland Uni. He had been on his OE since graduating. I had over 2 years experience. The firm had 2 partners so secretaries and secrets were shared. He was hired on a starting salary $10,000k higher than mine. When I left 2 years later I was earning more but so was he.

           Back then 50% of graduates from law school were women. Even today that figure is not reflected on the bench or in the partnerships.
   • johnm 1.3

     2 April 2015 at 9:31 pm

     Hi OAB 1000% right! 🙂
     The opposite policy leaves demoralised defeated people unable to contribute.
2. Olwyn 2

   2 April 2015 at 8:57 am

   Generous welfare provisions give people a choice. Not just whether to work or not, but whether to work for this boss or not. Which puts the boss class in the position where they have to meet certain standards if they want workers. However they want to set standards, not be forced to meet them. The myth is a euphemistic rendition of “Generous welfare benefits allow people to do otherwise. If they are asked to work under heinous conditions, there is every chance they will do otherwise.”
   • Draco T Bastard 2.1

     2 April 2015 at 10:33 am

     he myth is a euphemistic rendition of “Generous welfare benefits allow people to do otherwise. If they are asked to work under heinous conditions, there is every chance they will do otherwise.”

     Exactly what I’ve been thinking for the last few years. The bosses need atrocious welfare conditions so that people can be forced to work in atrocious conditions for minimal pay.
3. fisiani 3

   2 April 2015 at 9:08 am

   Generous welfare makes people more likely to want welfare. Self evident. Fixed it for you.
   • weka 3.1

     2 April 2015 at 9:17 am

     I think that’s an argument for paying lower welfare rates to neoliberal right wingers such as yourself who believe that everyone is as self interested as they are. Maybe there should be a test.
     • tracey 3.1.1

       2 April 2015 at 10:58 am

       no more taxpayer/ratepayer funded irrigation schemes for farmers, right Fiszzy?
   • miravox 3.2

     2 April 2015 at 9:18 am

     “Generous welfare makes people more likely to want welfare. Self evident. Fixed it for you”
     I guess you didn’t read the report. Let me make it easy for you. It concludes:

     This article concludes that there are few signs that groups with traditionally weaker bonds to the labour market* are less motivated to work if they live in generous and activating welfare states. The notion that big welfare states are associated with widespread cultures of dependency, or other adverse consequences of poor short term incentives to work, receives little support. On the contrary, employment commitment was much higher in all the studied groups in bigger welfare states and social differences were mostly smaller or did not vary across welfare states. Hence, this study’s findings support the welfare resources perspective over the welfare scepticism perspective.

     * e.g. (my words) poor, young, disabled, unemployed, ethnic minorities

     Read the rest here (as linked in the post) if you want to make a more informed comment
     http://wes.sagepub.com/content/29/1/99.full.pdf

     Seems to me the greater stake society has in you, the greater the commitment to that society (fify). [edit: snap OAB]
     • tracey 3.2.1

       2 April 2015 at 10:59 am

       This is why you are all too hard on Fisiani. He/She is a lfty, and uses parody as humour to mock the government. By pretending to have not read the facts on which the post is based he/she shows up Farrar’s question for how stupid it is.
   • BassGuy 3.3

     2 April 2015 at 9:52 am

     I’m going to draw the obvious conclusion from your statement:

     Poor welfare makes part-time minimum wage more attractive. Fixed that for you.

     Mind you, you need 16 hours before you earn more than the dole. If you’re forced to work two jobs, then one pays secondary tax so many would need even more than that.
   • tracey 3.4

     2 April 2015 at 10:57 am

     David Farrar asks

     ” Why do myths and misinformation drown information, facts and science?. ”

     David, study Fisiani. Even when the facts are posted for him/her, he/she ignores it completely cos it doesn’t fit his/her personal belief system and agenda.. But you already know this David, people like Fisiani are your, Slater and Key’s fodder.
4. One Anonymous Bloke 4

   2 April 2015 at 9:15 am

   🙄

   Faced with facts, Fisi’s automatic response is deny deny deny.

   People want to give back more to societies that value them: it’s self evident.
   • tracey 4.1

     2 April 2015 at 11:02 am

     And people like Fizzy never address why we make those born, or by accident, unable to ever work again, live on a subsistence level until they turn 65 (if they live that long) and then we give them a “pay rise” to 65% of the average wage. And, in this government’s case, take them right tot he supreme court to fight a minimum wage for their carers… and then bring in a law to get around Human Rights.
     • Sacha 4.1.1

       2 April 2015 at 12:47 pm

       We hate people who make us feel guilty. Govts have a lot to be guilty about.
5. vto 5

   2 April 2015 at 9:27 am

   quelle surprise

   the surprise is that righties do not see the truth of the human character
   • Stuart Munro 5.1

     2 April 2015 at 9:37 am

     It may be true of them – some are pretty unevolved.
6. Andrew Geddis 6

   2 April 2015 at 9:57 am

   Speaking of data and right-wingers, this post by David Farrar made be laugh…

   To be fair to David (I know, I know, but let me continue), the post wasn’t by him. It’s clearly labelled “A guest post by John Hughes of The Norwood Resource”.

   Of course, David chose to post it on his website, but I’m not sure the maxim “if you host something, you must agree with it” is one that applies? It would mean, for instance, that the various individuals with oversight of the website known as “The Standard” agree with and endorse every single guest post that they have ever hosted on their platform … .
   • r0b 6.1

     2 April 2015 at 10:28 am

     To be fair to David (I know, I know, but let me continue)

     By all means be fair to David!

     the post wasn’t by him

     Indeed not (lazy wording in post which I will fix). But in the case of a “one man band” blog like Kiwiblog if the blog owner posts it without disclaimer then I think the maxim applies (unlike anarchic collectives like this one where we frequently argue).

     After all, who doesn’t claim to support facts and science over myths and misinformation?
   • tracey 6.2

     2 April 2015 at 11:03 am

     Has he answered the question? David I mean, cos he surely knows the answer?
7. Kaye 7

   2 April 2015 at 10:01 am

   I’m on the Supported Living Payment. Can’t hold down any form of paid work any more. BUT- before the reforms, ie cuts I wasn’t living under daily chronic stress over money and was fit enough give back to the community in the form of voluntary work. The stress has made my medical condition way worse, I’m no longer able to even volunteer, so I can’t give back to the community. Repeat this scenario for many people with long term disabilities who for years have been helping hold the non-profit sector together, as well as giving ourselves a reason to keep going.

   Benefit rates aren’t just an incentive to go back to paid work.
   • tracey 7.1

     2 April 2015 at 11:04 am

     See my post above and thanks for commenting Kaye.
8. Hateatea 8

   2 April 2015 at 10:02 am

   Given that the amount of income that you are allowed to earn before abatement of entitlement kicks in hasn’t changed in at least 10 years, there is actually a disincentive to seek paid employment under the current Job Seeker’s benefit.

   Abatement commences at $80 Gross. A person has to pay either secondary tax on that or get a special tax rate from IRD. By the time you factor in transport costs etc there is little, if any, increase in a person’s disposable income for the effort expended to get and maintain employment.

   We need to look at how we encourage people back to employment, not punish them for the efforts that they make.
9. Penny Bright 9

   2 April 2015 at 10:41 am

   How about decent, full-time, well-paid jobs make people more likely to look for work?

   Penny Bright
   • tracey 9.1

     2 April 2015 at 11:05 am

     Well said…

     BUT how would the 1% get richer if that happens?
     • Murray Simmonds 9.1.1

       2 April 2015 at 1:11 pm

       Good thinking Hateatea, Penny Bright and tracey.

       And fizziassi – er – My reply to you is self-censored.
   • fisiani 9.2

     2 April 2015 at 12:39 pm

     Agreed. That’s National party policy and it’s working. More people employed than ever before in New Zealand. Record numbers of Kiwis returning from Australia to the better job opportunities here. Wages rising well ahead of inflation.
     • tracey 9.2.1

       2 April 2015 at 12:43 pm

       Kaloo Kalay
     • Draco T Bastard 9.2.2

       2 April 2015 at 5:35 pm

       That’s National party policy and it’s working.

       No it’s not. In fact, no government since 1984 has run with a full employment policy.

       More people employed than ever before in New Zealand.

       Now that is National Party policy and it is working – see your first sentence.

       Wages rising well ahead of inflation.

       Only for the few people at the top of the pile. The rest are either stagnant or going backwards.
10. Phil 10

    2 April 2015 at 11:19 am

    The paper is really interesting, and I’d encourage people to read it themselves.

    Unfortunately, your title for this post overstates both the results of the paper and the other research in the field which it refers to. The paper gives a pretty good summary of the literature both ‘for’ and ‘against’ generous welfare systems, and even notes that we can’t really tell which direction any causality between work and welfare goes (i.e. is a strong work ethic a pre-condition for a generous welfare state?) .

    Anyway, getting to the nitty-gritty in particular:
    As you’ve written, the paper is only able to find correlation not causality. Labour markets are, even at the best of times and with the best quality data, really hard to understand. It’s great to see this kind of study being undertaken and contributing to the field of work.

    but… the correlations aren’t especially strong for welfare generosity.

    Unsurprisingly, Job Satisfaction comes out as the most significant factor – if you’re happy in your job you’re much more likely to keep working even if you don’t need to.
    The next two most significant factors are ethnicity and current employment status; if you’re part of an ethnic minority you’re less likely to be committed to remaining employed and (i think i have read this correctly) if you’re NOT in work, you’re more committed and want to be employed even if you don’t need to be.

    Welfare generosity slots in just behind those two factors in fourth place (of the observed factors only – there may be other factors or unobserved variables that explain more of the difference).

    There’s also a really interesting point toward the end of the paper; Welfare generosity is highly correlated with ALMP’s (alternative labour market policies), which is no surprise in-and-of-itself. ALMP’s, like training schemes, employment subsidies etc aim to lower the costs of finding employment. The paper acknowledges that those alternative policies may be just as large a driver of the results as welfare generosity.
11. tracey 11

    2 April 2015 at 11:25 am

    Time for a re-post

    http://www.washingtonpost.com/opinions/free-money-might-be-the-best-way-to-end-poverty/2013/12/29/679c8344-5ec8-11e3-95c2-13623eb2b0e1_story.html
12. adam 12

    2 April 2015 at 12:03 pm

    It all comes back to the Myth of Dolism.

    The core of this Myth is – intergeneration and ever increasing dependence on welfare. That left to grow, dolism will mean a shrinking tax base, so that eventually the rich will pay for everything. All this, whilst the poor sit at home all day and play, PlayStation.

    “add you favourite cliché about working people here…”

    Ironic, that many people who grew up with welfare, are the exact ones – who on obtaining wealth, want it removed.

    “add you favourite hypocrite here…”

    Dolism, a fantasy to scare middle-class white people. Because middle-class white people ‘ant scared enough.

    “add- something to scare the middle-class white people in your neighbourhood…”
    • Phil 12.1

      2 April 2015 at 12:52 pm

      Here’s the paper from the OP on that matter, noting that plenty of literature exists which concludes “dolism” may very well be real.

      The predictions of the welfare scepticism approach are the opposite of those of the welfare resources perspective (e.g. Heinemann, 2008; Lindbeck and Nyberg, 2006). A basic assumption is that if individuals can obtain sufficient levels of well-being (economic, social and psychological) from living off public benefits, compared to being employed, they would prefer the former. When a ‘critical mass’ of individuals receive public benefits rather than engaging in paid work, the norms regulating work and benefit behaviour will weaken, setting off a self-reinforcing process towards the ‘selfdestruction’ of the welfare state (Heinemann, 2008). The more people are recipients of benefits, the less stigmatizing and costly in terms of social sanctions it is to apply for benefits (e.g. Heinemann, 2008: 240). Accordingly, as a consequence there will be spillover effects from benefit recipients to other people, between generations (Lindbeck and Nyberg, 2006), as well as at the company level and locally (Lindbeck et al., 2008; Rege et al., 2009), which in the end will undermine employment commitment and lead to the emergence of ‘dependency cultures’ (Murray, 1984).

      Similarly to Algan and Cahuc (2009), Michau (2009) argues that a high work ethic is
      a precondition for a generous welfare state. Once established, however, the generous welfare state will undermine its own normative base through parents’ adjustment of parenting style in anticipation of an enduring generous welfare state, making them less likely to teach their children to work hard. According to Michau (2009) and Lindbeck and Nyberg (2006), the drop in work ethic will only occur with a time lag of a generation after the introduction of generous benefits
      • tracey 12.1.1

        2 April 2015 at 1:00 pm

        Phil

        Is the stuff in highlights a developed theory or an observation/conclusion from studies of actual welfare recipients?
        • Phil 12.1.1.1

          2 April 2015 at 1:37 pm

          I haven’t read any of the studies I copy-pasted, but the modus operandi for a lot of this kind of research is to use ‘macro’ data (like GDP, unemployment rates, inflation, demography etc) first, where it exists.

          I.e. they’re studies of actual welfare data, at a macro level.
          • tracey 12.1.1.1.1

            2 April 2015 at 1:48 pm

            Thanks Phil…

            Kind of an economic perspective overview?
      • adam 12.1.2

        2 April 2015 at 3:46 pm

        Source, please.
13. Gosman 13

    2 April 2015 at 12:51 pm

    Is this study supported by statistics that show that countries with higher benefits have lower ;levels of unemployment or at least lower levels of people leaving work for a benefits? That would be interesting if it was the case.
    • tracey 13.1

      2 April 2015 at 1:01 pm

      You could find out and share it with us?
      • Gosman 13.1.1

        2 April 2015 at 1:12 pm

        I could indeed.
    • Phil 13.2

      2 April 2015 at 1:30 pm

      I’d also love to see them dig into the data on company-creation and self-employment.

      My ‘prior’ would be that countries with more generous welfare systems provide a safety net to entrepreneurs; this reduces the net-risk of creating a company or embarking upon their own enterprise and then suffering the financial costs of failure.
14. The Gormless Fool formerly known as Oleolebiscuitbarrell 14

    2 April 2015 at 6:12 pm

    The researchers, of Oslo and Akershus University College, Norway, found that the more a country paid to the unemployed or sick, and invested in employment schemes, the more its likely people were likely to agree with the statement, whether employed or not.

    They agreed with the statement? Whoo!

    Did they go and get an actual job?
    • idbkiwi 14.1

      2 April 2015 at 6:55 pm

      No.

      “With per capita GDP around $100,000, the Norwegian lifestyle has become such that the work week averages less than 33 hours, one of the lowest in the world, and while unemployment is low, there is large underemployment, made possible by benefits.

      In 2012, a new word entered the Norwegian lexicon – to “nave”, or live off benefits from welfare agency NAV.”

      http://uk.reuters.com/article/2014/05/08/uk-norway-economy-insight-idUKKBN0DO07520140508
15. Michael 15

    2 April 2015 at 6:39 pm

    Thanks for posting this Anthony – and for the link to the research. I hope the Labour MPs who voted for National’s latest beneficiary-bashing legislation in the House today all get to read this.

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