Effective Tax Rate On Taking Up Work When Claiming Unemployment Benefits

This indicator measures the financial disincentives to participate in the labour market. It calculates the proportion of earnings in the new job that are lost to either higher taxes or lower benefit entitlements when a jobless person takes up employment and claims unemployment benefits. Higher values means higher financial disincentives.

Calculations for families with children assume 2 children aged 4 and 6 who do not use formal childcare.