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Convergence in national Unemployment Benefits Systems

The Five Presidents' Report (2015) calls for strengthening economic policy coordination and setting EU wide standards.

In his 2016 State of the Union Address President Juncker said that we need a better Union that protects its citizens, among other priorities, as Europe is a social market economy.

He also set as a priority the presentation of the Pillar of Social Rights, which calls for effective unemployment benefits.

In this policy context, the discussion about convergence of national unemployment benefits schemes is high on the political agenda in the EU.

The Joint Research Centre (JRC) Fiscal Policy Analysis team cooperates with ZEW in doing a research on the convergence of unemployment benefits systems in Europe, focusing on the assessment of the impact of three key parameters: duration of benefits, replacement rates and eligibility conditions.

One of the key challenges for the simulation of unemployment benefits is the lack of information on the working history of individuals in cross-sectional survey data.

For this reason one of the novelties of the project is the use of the longitudinal EU-SILC micro-data. The output of the study includes the impact of different scenarios for convergence on the public budget (including feedback effects from indirect taxes), work incentives and on the income distribution of households.

The Fiscal Policy Analysis team is also working on extending EUROMOD for the simulation of unemployment benefit reforms, by matching EUROMOD input data with EU-SILC longitudinal data.

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