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Aliki Mouriki

Unemployment insurance

The replacement and coverage rates and the duration of benefits of the unemployed vary greatly
in the 4 countries under consideration. Greece and Spain have among the lowest coverage rates in
the EU-15, 36% and 47% respectively, whilst in Denmark it is close to 90% of the total workforce.
⁶⁰ Greece is also the country with extremely low replacement rates, 50% of the minimum wage (i.e.
€ 430,75 per month, increased to €454,25 as of May 2009), and short duration of benefits (up to
a maximum of 12 months), whereas in Denmark, the duration of the Unemployment Benefit can
reach 4 years and the replacement rate is 80%, in the Netherlands the replacement rate is 70% and
the duration can vary from 6 months to 5 years, whilst in Spain the replacement rate is also 70% of
the minimum wage and the duration ranges between 1-3 years.

As mentioned earlier (section 5.2.) in countries with more generous unemployment insurance
systems, eligibility criteria are becoming stricter and the duration of the benefits’ period shorter (like
in Denmark and the Netherlands). By contrast, in countries with low replacement rates, the tendency
is to marginally improve the conditions attached to unemployment compensation. However, the 2002
labour market reform in Spain has made the receipt of the unemployment benefit subject to job
activation and the non repeated refusal of “suitable” job offers or of a temporary job (Karamessini,
2008a).

Labour market segmentation

The dividing line in the labour markets has traditionally been between ‘insiders’ (those enjoying
a stable job and full employment and social security rights) and ‘outsiders’ (the marginalized, precari-
ous workforce, with few if any employment and social security rights). In recent years, however, la-
bour market segmentation has been reinforced along new dividing lines: internal and external labour
markets, workers with decent wages and the working poor. In Spain and Greece in particular, labour
market segmentation has been reinforced in 3 ways: (a) through increased labour market flexibility
and the growth of precarious jobs; (b) through the re-invigoration of the underground economy and

60 ECHP 2002 data, mentioned in Karamessini, 2008a.

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