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ARTICLE
Social consequences of unemployment: an EastWest comparison
Duncan Gallie, University of Oxford, UK
Dobrinka Kostova, Academy of Sciences, Bulgaria
Pavel Kuchar, Institut Sociologichke Studi, Prague, Czech Republic
Summary
The paper compares the experience of unemployment in Britain with that in three former
state socialist societies Bulgaria, the Czech
Republic and Slovakia, countries with relatively
recent welfare systems, providing a low level
of coverage for the unemployed. The analysis
examines the implications of the different
types of welfare regime for financial stress, for
social isolation and for psychological wellbeing. While it finds that the implications of
welfare arrangments depend considerably on
the nature of the labour market, it concludes
that the combination of very high unemployment with low welfare coverage exemplified
by the case of Bulgaria has exceptionally
high social and personal costs. There is no evidence that these are offset by the emergence of
alternative welfare arrangements based on
community solidarities.
Rsum
Cet article compare lexprience du chmage
au Royaume-Uni avec celle de trois anciens
Etats socialistes: la Bulgarie, la Rpublique
Tchque et la Slovaquie, pays avec des systmes de scurit sociale relativement rcents
et un bas niveau de couverture pour les
chmeurs. Cette analyse examine les implications des diffrents types de rgime de protection sociale sur langoisse financire,
Key words
Bulgaria, Czech Republic, Slovakia, social
exclusion, unemployment, welfare regimes
Introduction
In general, studies of the social consequences
of unemployment have focused on countries
with relatively established welfare states. The
very sharp rise in unemployment that accompanied the political transformation of the
countries of the former Soviet bloc provides us
with a particularly good test case of the impact
of unemployment in societies where there was
only an embryonic welfare safety net. Do the
unemployed in such countries experience
much higher levels of deprivation? Or could it
be the case that in the absence of institutionalized welfare provision, there are other mechanisms of support for the unemployed that may
provide equivalent or even higher levels of
social integration? The paper explores these
issues through a comparison of three former
state socialist societies (Bulgaria, the Czech
Republic and Slovakia) with a West European
society (Britain) which has an extensive
system of minimal social protection. Using
evidence from representative surveys in the
four countries, it concludes that community
Journal of European Social Policy 0958-9287 (200102)11:1 Copyright 2001 SAGE Publications, London, Thousand
Oaks and New Delhi, Vol 11 (1): 3954; 015841
Downloaded from http://esp.sagepub.com by Cristina Rat on February 28, 2009
40
G A L L I E , K O S T O VA
AND
KUCHAR
SOCIAL CONSEQUENCES
Table 1
Year
Czech
Slovakia
Bulgaria
Registered unemployed
1989
6.3
0a
1990
5.8
0.7a
1991
8.0
4.1
1992
9.8
2.6
1993
10.3
3.5
1994
9.4
3.2
1995
8.3
2.9
0a
0.8a
7.0
11.7
12.9
14.4
13.8
na
1.7
11.1
15.3
16.4
12.4
11.1
ILO unemployed
1993
10.3
1994
9.6
1995
8.6
13.7
13.1
21.4
20.2
16.2
4.0
4.1
4.1
OF
UNEMPLOYMENT
41
G A L L I E , K O S T O VA
42
Table 2
AND
KUCHAR
Czech
Slovakia
Bulgaria
Men
Women
80.9
19.1
41.9
58.1
55.4
44.6
40.6
59.4
204
2544
45+
18.8
50.4
30.8
23.2
55.8
21.0
23.8
59.4
16.8
17.5
57.7
24.8
Professional/managerial
Lower non-manual
Technician/supervisory
Skilled manual
Non-skilled
Never worked
12.7
8.2
3.8
20.2
51.6
3.6
18.9
8.7
2.6
23.7
28.0
18.1
22. 7
7.1
2.7
23.5
23.8
20.3
21.3
5.8
1.9
26.4
23.6
21.1
% married
All unemployed
Male unemployed
Female unemployed
48.7
50.8
39.9
59.9
44.4
71.0
53.9
49.9
59.0
74.0
71.1
76.0
SOCIAL CONSEQUENCES
OF
UNEMPLOYMENT
43
44
G A L L I E , K O S T O VA
AND
KUCHAR
Table 3 Percentage worrying almost all the time about money by sex, unemployment status and
unemployment duration
Britain
Czech
Slovakia
Bulgaria
Employment status
Employed
Unemployed
8.8
42.1
19.5
24.5
25.6
29.5
17.1
47.6
Sex
Men
Women
40.9
46.5
25.1
23.6
32.5
27.3
51.0
45.6
Duration of unemployment
<6 months
12+ months
36+ months
50.0
40.5
45.8
21.2
31.7
28.9
27.0
34.0
42.3
33.4
53.7
56.8
society before and after changes in the structure of welfare and, at the individual level,
making it possible to follow chronologically
the changes in peoples experiences in the
aftermath of unemployment. Until such evidence is available we are necessarily restricted
to testing the plausibility of particular views
about the implications of welfare arrangements in the light of evidence at a particular
point in time.
In assessing the impact of unemployment in
the four societies, we will focus in turn on
three main areas of peoples experience. The
first is that of financial stress; the second is the
implications of unemployment for family relations and for wider social networks; and the
third is its consequences for psychological
well-being.
Financial stress
Did the low level of financial protection provided by the weakly developed welfare
systems of the former state socialist societies
mean that unemployed people in those countries suffered much higher levels of anxiety
about money? Our main measure of financial
stress was a question asking people how often
they found themselves worrying about money.
The responses ranged from almost all the time
SOCIAL CONSEQUENCES
OF
UNEMPLOYMENT
45
Table 4 Unemployment effect on financial anxiety relative to Britain, with controls (ordered logit
models)
Model 1
Country effects
among unemployed
Coefficient
Sig
Britain
Czech
Slovakia
Bulgaria
N=
Ref.
.29
.03
.41
2,973
**
n.s.
***
Model 2
Country unemployment
effects relative to employed
Coefficient
Sig
Ref.
1.44
1.44
0.41
***
***
***
10,104
46
G A L L I E , K O S T O VA
AND
KUCHAR
SOCIAL CONSEQUENCES
Table 5
OF
UNEMPLOYMENT
47
Czech
Slovakia
Bulgaria
All
Employed
Unemployed
81.5
30.1
82.2
83.6
70.5
84.6
57.9
60.0
Male
Employed
Unemployed
72.3
23.7
70.4
76.5
61.4
83.3
51.3
49.5
Female
Employed
Unemployed
90.5
64.0
92.6
86.5
80.8
88.7
64.2
67.1
G A L L I E , K O S T O VA
48
Table 6
AND
KUCHAR
Czech
Slovakia
Bulgaria
18.4
34.6
18.7
24.5
23.1
27.0
13.1
25.4
24.6
47.0
24.7
35.1
29.0
48.4
32.8
46.8
13.7
48.7
5.9
21.3
20.3
38.1
28.6
42.3
Table 7
Britain
Czech
Slovakia
Bulgaria
Needed money
Employed
Unemployed
69
52
71
62
77
69
59
55
Depressed
Employed
Unemployed
78
68
66
62
69
59
52
45
Employed
Unemployed
52
48
65
57
67
62
33
24
SOCIAL CONSEQUENCES
OF
UNEMPLOYMENT
49
Table 8 Unemployment effect on social support relative to Britain, with controls (ordered logit
models)
Model 1
Country effects
among unemployed
Coefficient
Sig
Britain
Czech
Slovakia
Bulgaria
Ref.
.14
.05
1.12
N=
3,007
n.s.
n.s.
***
Model 2
Country unemployment
effects relative to employed
Coefficient
Sig
Ref.
.04
.31
.42
n.s.
*
***
8,638
Psychological distress
As a last step in the examination of the consequences of unemployment, we have examined
50
Table 9
G A L L I E , K O S T O VA
AND
KUCHAR
Czech
Slovakia
Bulgaria
All
Employed
Unemployed
0.87
1.22
1.03
1.21
1.02
1.28
0.91
1.42
Male
Employed
Unemployed
0.86
1.18
1.02
1.19
1.00
1.29
0.90
1.39
Female
Employed
Unemployed
0.93
1.38
1.09
1.22
1.06
1.27
0.95
1.43
Model 2
Country unemployment
effects relative to employed
Coefficient
Sig
Britain
Czech
Slovakia
Bulgaria
Ref.
.02
.09
.21
n.s.
**
***
Ref.
.17
.06
.17
***
*
***
Constant
1.02
***
.72
***
N=
2,968
10,121
Notes: * = p < 0.05; ** = p < 0.01; *** = p < 0.001; n.s. = non-significant.
Model 1. Unemployed sample only. Country coefficients are the main country effects. Adjusted
R2=.05. Control variables included sex, age, class and duration of unemployment.
Model 2. Sample of employed and unemployed. The country coefficients for the unemployed are the
interaction terms unemployed*country. The coefficient for unemployment in the reference country
(Britain) was .36 (p = 0.001). Control variables included country, sex, age and class. The overall model
adjusted R2=.17.
Source: Project Surveys (see Note 6).
SOCIAL CONSEQUENCES
Conclusions
The paper has focused on whether the relatively low coverage of welfare state protection
in the former state socialist societies led to an
accentuation of the personal and social problems associated with unemployment or
encouraged the growth of other types of social
solidarity, rooted in the community, that could
help offset deprivation and possibly provide a
higher level of social integration than would
be found in societies with more extensive
formal welfare provision.
A first point to note is that there was no
straightforward relationship between the
financial anxiety caused by unemployment
and the level and duration of benefit protection. In part this is because the effects of
welfare provision have to be considered
together with the severity of unemployment.
OF
UNEMPLOYMENT
51
All of the former state socialist societies provided income support for unemployed people
for only relatively short periods. But whereas
this was not associated with high levels of
anxiety in the Czech Republic, where the level
of unemployment was low and unemployment
tended to be of short duration, it was associated with very high levels of anxiety in
Bulgaria, which was confronted by high and
very persistent unemployment.
While unemployed people in Bulgaria suffered more than the unemployed in any of the
other countries, it was the British unemployed
who were the next most subject to financial
stress despite the greater coverage of welfare
provision. This may have reflected the low
level of benefits even at the outset of unemployment and possibly the high levels of
household debt associated with the consumerism of Western societies. This suggests
that, as well as the extent of welfare provision, the severity of unemployment and the
nature of consumption practices in a society
are likely to affect the relationship between
unemployment and financial stress.
The structure of the welfare systems was
associated with different patterns of financial
anxiety by duration of unemployment. In the
former state socialist societies, which provided
relatively high benefits in the early months of
the unemployment spell, but virtually no
safety net for long-term unemployed people,
there was a sharp rise in financial anxiety by
duration of unemployment. In contrast, the
British were distinctive in their very high levels
of financial anxiety immediately upon becoming unemployed. This may well result from
the fact that the British system provides relatively low replacement ratios at the onset of
unemployment. The indefinite nature of benefits in the British system, however, may have
been an important factor in preventing financial anxiety from rising sharply with longer
unemployment as happened in the former
state socialist societies.
Were the differences in the welfare systems
associated with differences in the responses
to unemployment of the household and the
Journal of European Social Policy 2001 11 (1)
52
G A L L I E , K O S T O VA
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KUCHAR
Notes
1 Overall household income had to be below the
minimum living standard, which in the early
1990s was lower than the minimum wage (for
instance in the Czech Republic in 1992 Kcs
1,700 compared to Kcs 2,200). The system
offered better protection for families with several
dependent children. In Bulgaria, eligibility criteria also included housing space (not more than
one room per person) and savings (not more
than the equivalent of 70.00). The maximum
social assistance grant was 50% of the minimum
wage.
2 Of the registered unemployed 86% (our data)
and 66% of the ILO unemployed (Department
of Employment, 1993: 45).
3 The minimum wage was approximately a third
of the average wage.
SOCIAL CONSEQUENCES
References
Banks, M., Clegg, C., Jackson, P., Kemp, N.,
Stafford, E. and Wall, T. (1980) The Use of the
General Health Questionnaire as an Indicator of
Mental Health in Occupational Studies, Journal
of Occupational Psychology 53: 13794.
Bobeva, D. (1994) Labour Market Policy in
Bulgaria, in Centre for Co-operation with the
Economies in Transition, Unemployment in
Transition Countries: Transient or Persistent.
Paris: OECD.
Boeri, T. (1994) Labour Market Flows and the
OF
UNEMPLOYMENT
53
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KUCHAR