Household nonemployment, social risks and inequality in Europe

The dissertation explores interactions between households, states and markets and their relation to socio-economic inequalities among working-age households. The focus lies on three aspects: the importance of the welfare state, economic risks and opportunities within households, and the link between these two aspects and broader patterns of inequality at the societal level. These are analysed in three empirical studies, using a range of statistical methods (multilevel analysis, event history models and counterfactual analyses of income distributions). In addition, an extensive framework paper provides a background to the analyses, clarifies their relation in theoretical terms, and discusses the results. The first empirical study explores the relation between the regulation of social benefits, social risks, and household nonemployment in 20 European countries using internationally comparative institutional and survey data. The study reveals that eligibility conditions and activation policy vary systematically with the effect of social risks on the probability of household nonemployment. The strength and direction of influence depends on the specific policy area and risk factor. The second study analyses the duration of household nonemployment for British and German couples from the early 1990s to the mid-2000s. Dual joblessness has become longer over time, which is related to changes in the household composition of nonemployed couples. The third analysis evaluates the consequences of welfare shifts between households on changing patterns of inequality between 2005 and 2010. Changes in the distribution of household employment, benefit transfers, and family types in Germany, the United Kingdom, Poland, and Spain are analysed in terms of their contribution to developments in income inequality between households. The analysis of income distributions suggests that changes in socio-demographic and economic household characteristics in a population can have a substantial impact on different income groups. The overarching conclusion of the dissertation is that certain aspects of household composition enhance the risk of lower economic activity and welfare but that the impact of these factors varies strongly according to the broader context the households are situated in. Social policies that have the potential to reduce inequalities between households need to consider possible adverse effects on economic risk structures and spill-over effects to other areas of social protection. Future research should continue studying the household’s role in relation to the market, the state, and individual needs and resources; incorporate additional economic and welfare regime aspects into the analyses; and explore further statistical tools to do so