Majority of unemployed not 'better off on dole', according to new research

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New research shows further evidence that people are better off having a job than living on the dole.

A paper entitled "Welfare Targeting and Work Incentives" from the Economic and Social Research Institute (ESRI) has found that most people who claim benefits are single and childless - and would be paid more on the minimum wage.

Even when work does pay less than welfare, seven out of 10 people would prefer to have a job.

"New research confirms that work pays more than welfare for close to six out of seven unemployed people – even when in-work costs like childcare and travel to work are taken into account," the ESRI said.

"Among those people in employment or unemployed facing a situation where work pays less than welfare, more than seven out of 10 choose work rather than welfare."

For those with families, extra payments for dependent children and in respect of a non-working spouse can mean that the net rewards from work are reduced, the research indicted.

But even those who, on a “snapshot” basis, would be “better off on the dole” tend to choose work.

Reasons for this include:

- The fact that prolonged unemployment tends to reduce future wages;

- Being in employment provides opportunities for wages to grow;

- There are non-financial benefits to being in work, including social and psychological benefits;

- There are also compliance costs associated with welfare payments – such as requirements to attend training and to search for work – and penalties associated with non-compliance.

The paper is among the topics for discussion at the ESRI's "Budget Perspectives" conference, taking place today in Dublin.

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