Three decades of research: Social security and employment
To celebrate VATT’s 30th anniversary we are publishing a series of texts presenting our core fields of research. In this fifth part of the series, we are focusing on our research in social security and employment.
The social security system provides a safety net during illness, disability and unemployment and its purpose is to ensure reasonable income in all situations and to narrow income differences and differences in wellbeing. However, generous social security benefits weaken incentives to work and the social security contributions collected from employers affect the demand for labour.
Providing social security in a welfare state is challenging: the safety net must be comprehensive, while at the same time, it must be ensured that it does not unreasonably discourage people from seeking employment. Improvements in the social security system should be guided by research on how the benefits and the contributions collected to finance them impact the behaviour of employees and employers and, consequently, employment. For this reason, since its establishment, VATT has carried out extensive research on social security and its effects on income distribution and employment.
To mark its anniversary year, VATT has produced a compilation of its studies on social security and employment: https://vatt.fi/en/social-security-and-employment