Net Replacement Rates in unemployment
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Net Replacement Rates in unemployment measure the proportion of previous in-work income that is maintained after 1, 2, …, T months of unemployment.

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1. The indicator is the ratio of net household income during a selected month of the unemployment spell to the net household income before the job loss.
2. Calculations refer to a jobseeker aged 40 with an uninterrupted employment record since age of 19 until the job loss.
3. Guaranteed Minimum Income (GMI) benefits are included in the calculations subject to relevant income and eligibility conditions. If benefit receipt is subject to activity tests, such as active job-search or being available for work, it is assumed that these requirements are met.
4. Income taxes payable on benefit entitlements are determined in relation to annualised benefit amounts (i.e. monthly values multiplied by 12), even if the maximum benefit duration is shorter than 12 months.
5. For married couples, the second adult member is also assumed to be out of work. Differently from the other adult, they are not claiming contributory benefits, e.g. because they have expired, but are similarly assumed to meet any behavioural requirements needed for eligibility to other types of social benefits.
6. Family benefits are included in the calculations subject to relevant income and eligibility conditions. Calculations for families with children are for families with two children aged 4 and 6. Neither childcare benefits nor childcare costs are considered. Adults are both aged 40 and are assumed to have full work capacity.
7. If housing benefits are included in the calculations, these are calculated assuming a household renting in the private market paying rent equal to 20% of the average wage. Rent levels are the same for all family types.
8. Where benefit rules are not determined on a national level but vary by region or municipality, results refer to a “typical” case (e.g. Michigan in the United States, the capital in some other countries). A full description of the policies included in the calculations for each country is available
here.
9. For a detailed description of the assumptions underlying the OECD Tax-Benefit model and the related policy indicators, please see the methodology document.
10. For more information, visit the project webpage or contact the OECD tax-benefit team.

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The first preliminary release of year T-1 indicators is in February. As this release is based on projected wage values and preliminary information on tax rules, any use of these indicators should include the following disclaimer: “Results based on preliminary data and wage estimates”. The second final release of year T-1 indicators is scheduled in April.

Net Replacement Rates in unemploymentAbstract

Net Replacement Rates in unemployment measure the proportion of previous in-work income that is maintained after 1, 2, …, T months of unemployment.

Other data characteristics

1. The indicator is the ratio of net household income during a selected month of the unemployment spell to the net household income before the job loss.
2. Calculations refer to a jobseeker aged 40 with an uninterrupted employment record since age of 19 until the job loss.
3. Guaranteed Minimum Income (GMI) benefits are included in the calculations subject to relevant income and eligibility conditions. If benefit receipt is subject to activity tests, such as active job-search or being available for work, it is assumed that these requirements are met.
4. Income taxes payable on benefit entitlements are determined in relation to annualised benefit amounts (i.e. monthly values multiplied by 12), even if the maximum benefit duration is shorter than 12 months.
5. For married couples, the second adult member is also assumed to be out of work. Differently from the other adult, they are not claiming contributory benefits, e.g. because they have expired, but are similarly assumed to meet any behavioural requirements needed for eligibility to other types of social benefits.
6. Family benefits are included in the calculations subject to relevant income and eligibility conditions. Calculations for families with children are for families with two children aged 4 and 6. Neither childcare benefits nor childcare costs are considered. Adults are both aged 40 and are assumed to have full work capacity.
7. If housing benefits are included in the calculations, these are calculated assuming a household renting in the private market paying rent equal to 20% of the average wage. Rent levels are the same for all family types.
8. Where benefit rules are not determined on a national level but vary by region or municipality, results refer to a “typical” case (e.g. Michigan in the United States, the capital in some other countries). A full description of the policies included in the calculations for each country is available
here.
9. For a detailed description of the assumptions underlying the OECD Tax-Benefit model and the related policy indicators, please see the methodology document.
10. For more information, visit the project webpage or contact the OECD tax-benefit team.

Validation

The first preliminary release of year T-1 indicators is in February. As this release is based on projected wage values and preliminary information on tax rules, any use of these indicators should include the following disclaimer: “Results based on preliminary data and wage estimates”. The second final release of year T-1 indicators is scheduled in April.