Assessing Design Principles and Possible Impacts of an In-Work Benefit Scheme in Greece

The paper examines the potential benefits and challenges of a possible in-work benefit scheme in Greece.

Highlights

• We examine current developments in the Greek labour market  and the potential role, design and impact of the introduction of an in-work benefit scheme
• Compared with other EU Member states, Greece suffers from very low employment rates for women and part-time workers and a very high rate of female long-term unemployment.
• Some 1.3 million of the working-age population in Greece are either long-term unemployed or currently inactive in the labour market, including some 200,000 adult recipients of the Guaranteed Minimum Income (GMI) welfare benefit scheme.
• An in-work benefit scheme of an overall fiscal cost of €290 million a year, once second-order employment effects are accounted for, could make a substantial contribution to an overall strategy to help mobilise and facilitate the long-term unemployed and inactive population to return to the labour market. 
• Estimates suggest that such a scheme could increase labour market participation by 0.9 percentage points of the workforce, particularly among women. This would add approximately some 60,000 additional workers to the economy and increase overall labour hours by 1.2%. Meanwhile, the at-risk-of-poverty rate is expected to decrease by approximately 0.6 percentage points for the active population.

Information and identifiers

Discussion Paper 219. March 2025. Brussels. PDF. 38pp. Tab. Graph. Bibliogr. Free.

KC-01-25-021-EN-N (online)
ISBN 978-92-68-23680-2 (online)  
ISSN 2443-8022 (online)
doi:10.2765/0939217 (online) 

JEL classification: J200, J210, J220

Disclaimer

European Economy Discussion Papers are written by the staff of the European Commission’s Directorate-General for Economic and Financial Affairs, or by experts working in association with them, to inform discussion on economic policy and to stimulate debate. The views expressed in this document are solely those of the author(s) and do not necessarily represent the official views of the European Commission.