Plans for a welfare system with parallel employment are on the table of experts Commission.
Discussion Paper, published on the official website of the Commission on March 13, 2025, examined the potential role, feasibility and possible impact of a possible system of benefits. According to the Discussion Paper Experts of the Commission, such a system could subsidize the employment of 60,000 (beneficiaries of the minimum guaranteed income) at a total budgetary cost of € 290 million.
Such systems have been used successfully in other EU Member States encourage labor market participation and reduce poverty, most of the time as part of a wider labor reform, the study of experts said.
Greece has a significant gap in employment compared to most other EU Member States, with significantly lower employment rates for women and part -time workers and a higher rate for women with long -term unemployment.
About 1.3 million of the population at work are either long -term unemployed or inactive at the labor market (excluding those who study full -time and those suffering from long -term illness or disability).
About 960,000 from this group of unemployed are women. An important part of the labor market -active is the beneficiaries of the guaranteed minimum welfare income allowance (GMI), who are facing particularly strong disincentives to participate in the labor market.
The document thus examined the possible role of a new system of benefit benefits to provide financial incentives for new labor market participation and to strengthen other labor supply policies.
In order to explore the optimal design of such a shape, the structure and planning of successful examples of optimal practices from the United States, Germany, France and the Netherlands were examined.
It is noteworthy that these programs targeted different sections of the job supply, such as the German Mini – Jobs aimed at low -income part -time, the Dutch system targets full -time minimum wage and medium -sized jobs, while the US EITC has given the US EITC.
In any case, the offenses between increased incentives for a new labor market participation, potential disincentives for existing workers and the overall budgetary cost of the regime plays an important role in both its design and effectiveness.
Looking at these shapes, four important designs have been identified for work benefits:
- In order to maximize the impact and to ensure the cost-efficacy relationship, the benefits at work should aim where significant new participation can be expected.
- The cost -effectiveness ratio can be maximized by limiting the number of existing workers are adversely affected by the gradual abolition of the benefit.
- In order to maximize the incentives and the effectiveness and results of a reduction in the poverty of the benefit system of low -income workers and households, benefits should be paid in real time.
- In order to allow poverty to reduce, it is important to ensure good integration between employees and existing welfare programs.
The generals for a new effective and cost -effective employment system in Greece can be developed through the implementation of these principles.
Of the overwhelming 75% of all existing jobs in Greece, most are 35 hours, the new regime should aim for new full -time jobs and provide incentives for new part -time employment.
In fact, the deterrent effects of such a system for existing workers are limited due to the relatively small number of existing workers, who earn a little less or more than the minimum wage full time.
By choosing a work allowance, which is a simple percentage of gross salary, they allow for immediate inclusion of the allowance in weekly or monthly wage packages.
Complete consistency with the social allowance of the minimum guaranteed income could be more easily achieved by the complete exemption of benefits within the work environment by definition of income used to assess GMI’s eligibility and benefits.
Taking into account the budgetary restrictions, an indicative system of benefits is examined, which would offset 13.9% of the insurance contributions of all low -wages with a gross salary of 627 euros per month (the GMI income threshold of a couple with two children) and which is subsequently reduced.
Overall, the introduction of the unemployment benefit is estimated to significantly increase the rate of participation in the labor market by 0.9 percentage points of the workforce, about 60,000 additional employees.
Women’s participation rate is expected to increase by 1.2 percentage points or 39,000 people, about twice the increase in men’s participation rate by 0.6 percentage points or about 22,000 people. Most of the new workers are expected to move to full -time jobs over 35 hours.
Total working hours are expected to increase by 1.2%. The distribution of income is also estimated to be improved, with the Gini factor slightly reduced (by 0.5%) and the rate of poverty risk decreased by about 0.6 percentage points for the active population.
The total budgetary burden of the new system is estimated at EUR 290 million a year, as the impact of taxation on tax and benefits compared to a basic estimate of approximately EUR 320 million per year.
However, these costs are likely to be significantly further reduced, if the positive macro -economic effects of an increase in total employment by 1.2% would be taken into account.
The conclusion is, therefore, that a system of benefits, according to the lines presented here, could contribute to an overall strategy for mobilizing and facilitating the long -term unemployed and inactive population to return to the labor market.
Read here In detail the study of the Commission experts.