Minimum income benefits—called Social Security payments, Jobseeker’s Allowance, social assistance or colloquially welfare payments—are paid out by all developed countries in the OECD. However, their amounts vary greatly, as data from the organization shows. Rates in the United States, reaching between 6% and 17% of nationwide median disposable incomes, are on the same level as in some Eastern European nations.
The relative size of minimum income payment depends on a person’s living situation—whether they are partnered or have children (and how many). In the U.S., a couple with two children can expect to receive 17% of the disposable income a typical working couple with two kids would have, while a single’s benefit would amount to just 6% of median disposable income in the country.
Benefit payments are lower in Hungary and Turkey compared to the United States, while they are on about the same level in Slovakia and Bulgaria. Other Eastern European nations surpass the U.S. in the relative size of their minimum income, for example Romania, Croatia, Czechia and Poland. In the latter country, benefits reach as high as 41% of median disposable incomes.
This is more than in Scandinavian nation Norway, where benefits only reach as high as 37%. However, Norway treats benefactors more equally, with singles, couples, the childless and parents all paid between 35% and 37% of national median disposable incomes when receiving benefits. Finland and New Zealand apply a similar approach.
Different Welfare Systems
The childless receive no benefits in Turkey and very low assistance in Hungary, Bulgaria and Romania—comparable to the low level of support in the United States. These discrepancies are typical for conservative welfare regimes, which focus on family-based assistance. While assistance levels are higher, the same discrepancies between payments for the childless and payments for families can be observed in other Eastern European countries as well as Canada. Countries might also apply a liberal approach to welfare, paying out means-based, modest payments, or create a universalistic system, which like in some Scandinavian countries promotes high and equal standards while trying to reduce stigma around benefits.
Some of the highest minimum income payments are found in Western Europe, including in Germany, the United Kingdom, Denmark, the Netherlands and Ireland. Benefits are also high in South Korea and, above all, in Japan, where recipients are paid between two thirds and three quarters of national disposable incomes. Japan’s system has been lauded for its generality and ease of use, but there is still a large stigma attached to it in the country, leading to lower uptake.
Welfare payments have been accused of discouraging people to work. In the context of developed countries, some studies have found no such effect, while other have indeed found small effects, which might be considered by some to be outweighed due to the help provided for people in need, many of which will enter employment again. In the context of developing countries, cash benefits paid out to poor recipients have been associated with a bigger array of positive outcomes on work.
Charted by Statista
