Financial disincentive to return to work measures the percentage of earnings lost due to higher taxes or lower benefits when a jobseeker takes up a new job after a period of unemployment.
Calculations are based on a scenario where a person with two children returns to work after two months of unemployment, and their partner works full-time at 67% of the average wage. The indicator shows how much of the new earnings are effectively lost through reduced unemployment-related support or increased taxes. Results can vary depending on the level of earnings in the new job. Social assistance and housing benefits are included if the person meets the eligibility conditions.
This indicator is expressed as a percentage of earnings in the new job.
