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Receiving Assistance in Material Need versus Active Participation in the Labour market: Who Will Win?

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  • Brian König
  • Gabriela Dováĺová
  • Ján Košta

Abstract

The paper focuses on identifying the main factors affecting the motivation of labour market participation in connection to the system of assistance in material need and the subsistence minimum. The results of the analysis show that (i) assistance in material need itself lowers the motivation to work, but in Slovakia, the difference between net household income from work after finding a job and the net social income during unemployment is increasing in time; (ii) house-holds with incomes below the subsistence minimum react to these changes most sensitively; and (iii) increases in the assistance in material need negatively affect the motivation to work, especially in those individuals for whom the additional benefit from work is relatively low, i.e., people with a low level of education and mothers with dependent children.

Suggested Citation

  • Brian König & Gabriela Dováĺová & Ján Košta, 2025. "Receiving Assistance in Material Need versus Active Participation in the Labour market: Who Will Win?," Politická ekonomie, Prague University of Economics and Business, vol. 2025(1), pages 1-30.
    • Handle: RePEc:prg:jnlpol:v:2025:y:2025:i:1:id:1451:p:1-30
    DOI: 10.18267/j.polek.1451
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    References listed on IDEAS

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    4. Aaberge, Rolf & Colombino, Ugo & Strom, Steinar, 1999. "Labour Supply in Italy: An Empirical Analysis of Joint Household Decisions, with Taxes and Quantity Constraints," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 14(4), pages 403-422, July-Aug..
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    More about this item

    Keywords

    Subsistence minimum; assistance in material need; motivation to work; Heckman's selection model;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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