Politická ekonomie 2025, 73(1):1-30 | DOI: 10.18267/j.polek.1451

Receiving Assistance in Material Need versus Active Participation in the Labour market: Who Will Win?

Brian König ORCID..., Gabriela Dováĺová ORCID..., Ján Košta
Brian König, University of Economics in Bratislava, Faculty of Economic Informatics, Bratislava, Institute of Economic Research SAS, Bratislava, Slovak Republic
Gabriela Dováĺová, Institute of Economic Research SAS, Bratislava, Slovak Republic
Ján Košta, Institute of Economic Research SAS, Bratislava, Slovak Republic

The paper focuses on identifying the main factors affecting the motivation of labour market participation in connection to the system of assistance in material need and the subsistence minimum. The results of the analysis show that (i) assistance in material need itself lowers the motivation to work, but in Slovakia, the difference between net household income from work after finding a job and the net social income during unemployment is increasing in time; (ii) house-holds with incomes below the subsistence minimum react to these changes most sensitively; and (iii) increases in the assistance in material need negatively affect the motivation to work, especially in those individuals for whom the additional benefit from work is relatively low, i.e., people with a low level of education and mothers with dependent children.

Keywords: Subsistence minimum, assistance in material need, motivation to work, Heckman's selection model
JEL classification: C13, C51, J33

Received: November 7, 2023; Revised: July 3, 2024; Accepted: July 29, 2024; Published: February 17, 2025  Show citation

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König, B., Dováĺová, G., & Košta, J. (2025). Receiving Assistance in Material Need versus Active Participation in the Labour market: Who Will Win? Politická ekonomie, 73(1), 1-30. doi: 10.18267/j.polek.1451
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