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Income in Work and When Unemployed: Some Problems in Calculating Replacement Ratios

Published online by Cambridge University Press:  26 March 2020

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Extract

Replacement ratios measure the relationship between income out of work and income in work. A ratio of 50 per cent for example would indicate that an employed person would have only half the income if he were unemployed. Interest in these ratios may be a reflection of concern either about living standards or about the incentive to work. For some purposes it is the current level and dispersion of these ratios that matter, for others it is necessary to build up a consistent set of ratios for a run of years in the past. The construction of time series is of particular importance if one is trying to assess the effect of the benefit system on wages or on employment.

Type
Articles
Information
National Institute Economic Review , Volume 103 , February 1983 , pp. 56 - 61
Copyright
Copyright © 1983 National Institute of Economic and Social Research

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Footnotes

∗

This note has been prepared by Chris Trinder of the National Institute of Economic and Social Research.

References

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