Principle 13

Unemployment benefits

"The unemployed have the right to adequate activation support from public employment services to (re)integrate in the labour market and adequate unemployment benefits of reasonable duration, in line with their contributions and national eligibility rules. Such benefits shall not constitute a disincentive for a quick return to employment."

- Principle 13 of the European Pillar of Social Rights

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Unemployment benefits as a determinant of health

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Studies show that unemployment is strongly associated with worsened physical and mental health, especially during prolonged spells. Economic insecurity is the greatest driver of poor health in the EU, as confirmed by the latest data. Pathways leading to this are multidimensional, with the most pronounced effects being heightened risk of financial insecurity and lower disposable income.  

Unemployment benefits are more than financial aid to those out of work and seeking new employment; they are also effectively a public health instrument.  

Employment benefits as a public health instrument

By temporarily cushioning income shocks, unemployment benefits reduce stress, anxiety, and related health risks while sustaining access to essential goods and services, such as healthcare, housing, and nutrition. Well-designed systems help people remain connected to society, preserve dignity, and avoid the downward spiral into poverty and ill health. For policymakers, such benefits are not only about fairness in the labour market, but also about building healthier, more resilient populations, easing pressures on health systems, and supporting quicker reintegration into work. 

When unemployment stretches over the long term, adequate benefits become a lifeline that prevents long-lasting ill health, social isolation, and inequalities — making them a crucial lever for protecting public health. While vital, they are hardly sufficient on their own to sustain healthy living and secure employment, meaning that building skills, social and health support are needed as complementary measures. 

Employment benefits as a public health instrument

Not all job loss is equal

Unemployment harms everyone, but its health toll is heaviest for vulnerable groups: low-skilled workers, migrants, women in precarious jobs or unpaid care roles, people with disabilities, Roma communities, and residents of disadvantaged regions. 

  • Gender gaps: Women’s unemployment rate in the EU was 6.2 % vs. 5.7 % for men in 2024. Many struggle to stay in the workforce due to low career prospects and informal care duties. The EU’s ‘unpaid care penalty’ is estimated at €242 billion annually, underscoring the need for gender-equity-proof policies. 
  • Roma and migrants: On average, 57% of Roma aged 20- 64 in the EU are unemployed, with discrimination from education and the labour market, and informal work histories blocking access to benefits and statutory support systems for goods and services, such as housing or care. Migrants and ethnic minorities often face the same barriers, widening exclusion. There might be some recent exceptions with the Ukrainian refugees who – at least until now – could benefit from special arrangements.  
  • Disability: Only 51 % of people with disabilities are in work (vs. 75 % without). This gap reflects persistent barriers such as inaccessible workplaces and discrimination. Without inclusive benefit access, people with disabilities face higher risks of poverty, poorer physical and mental health, and long-term exclusion. Ensuring disability-sensitive benefits and activation measures is essential to narrow inequalities and protect public health. 
  • Long-term unemployment: Extended joblessness (12+ months) increases risks of depression, chronic stress, poorer physical health, and social isolation. The relationship is bi-relational: poor health also raises the risk of labour-market exclusion. A Norwegian study showed men’s excess mortality and hospitalisations rise more sharply than women’s after unemployment, and men more often claim post-unemployment sick benefits — underlining both gendered risks and the protective role of social protection. 
  • Rural and regional dimension: In EU rural areas in 2023, unemployment rates among men were 19% and 30.3% for women, underpinning a rationale for gender-sensitive employment policies and inclusive social protection measures that address structural barriers in rural labour markets and better alignment of unemployment benefits with regional and rural realities. 
Not all job loss is equal

Cost, coverage, and health returns

Unemployment benefits are a substantial investment: in 2022, EU expenditure on unemployment-related benefits amounted to €178 billion, or ~1.1 % of GDP. This share represents 4.1 % of all social benefit spending in the EU. Yet coverage is limited: around two-thirds of unemployed people in the EU receive no unemployment benefit, often because their employment records are too short or eligibility has lapsed. That suggests many are left unprotected. 

Adequacy varies widely. In some countries, initial benefits replace up to 80–90% of previous wages (e.g., Luxembourg, Denmark, Finland, Sweden, the Netherlands, France, and Portugal). In contrast, in other countries, they decline so rapidly that benefit recipients fall below national poverty thresholds within months (Greece, Italy, Ireland), especially when only a non-contributory safety net support remains.  

The average of a single person's previous net income that is replaced by unemployment benefits 

For a single person without children, the average net replacement rate is around 58%: unemployment benefits replace 58% of their previous net income. The rate drops to 37% once they are long-term unemployed. Benchmarking across Europe shows that some unemployment assistance schemes (not full insurance) provide low flat-rate benefits that may not keep pace with the cost of living, particularly in high-price regions. 

Well-designed benefits pay off: they reduce stress-related ill health, cut demand for costly emergency health and social services, and prevent long-term exclusion from the labour market. In practice, this means lower healthcare expenditure, stronger reintegration, and healthier, more resilient populations — turning social spending into a public health return on investment. 

Cost, coverage, and health returns

Youth unemployment and mental health: a public health imperative

Unemployment hits young people particularly hard. Entering the labour market straight into joblessness, or losing a first job after only a short time, undermines self-worth, belonging and trust in institutions.  

Youth unemployment and high NEET (not in education, employment, or training) rates in the EU (15% and 11.2% respectively) are a public health emergency: they heighten risks of depression, anxiety, loneliness, and harmful coping strategies such as substance misuse or gambling. Long-term scarring effects include chronic stress, poorer health later in life, and wage penalties that lock young people into cycles of disadvantage. 

Adequate unemployment benefits make a critical difference. By reducing financial insecurity, they protect mental health, buffer against adverse experiences in families, and support young people in staying connected to education, training, or job-seeking pathways.  

For public health systems, this means reduced demand for crisis interventions and healthier long-term trajectories. Investing in youth support through benefits and active labour-market measures is therefore both a social protection duty and a public health imperative — shaping more resilient, inclusive, and prosperous societies. 

Youth unemployment and mental health: a public health imperative
About principle 13

What does the EPSR Action Plan say?

The EPSR Action Plan sets out several overarching goals for EU Member States for Principle 13:

  • Increase employment: By 2030, at least 78% of those aged 20-64 should be employed, focusing on young, female, and low-skilled workers vulnerable to labour market shifts and economic shocks. 

    • At least half the gender employment gap compared to 2019 in order to progress on gender equality and achieve the employment target on for the entire working age population. 

     

    • Decrease the rate of young people neither in employment, , nor in education or training (NEETs) aged 15-29 from 12.6% (2019) to 9% , namely by improving their employment prospects. 

  • Reduce poverty and social exclusion: By 2030, lift at least 15 million people (including 5 million children) out of poverty or exclusion through an integrated, life-course approach tackling its root causes. 

  • Improve social impact assessments: Member States should use distributional impact assessments to ensure transparency in reforms and resource allocation effects on meeting the needs of diverse populations. 

Where are we now?
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Where are we now?

The Social Scoreboard measures progress on the principles of the EPSR. Linked to Principle 13, the Scoreboard outlines that in the EU in 2024:  

  • Unemployment rate was 5.9% among the total EU population, with 1.9% of all unemployed long-term, while youth unemployment was 14.6% and 11.1% of young people aged 15-29 were not in employment, education or training (NEETs). 

  • EU gender employment gap was 10%. 

  • Disability employment gap was 24%.

  • 21% of EU population was at risk of poverty or social exclusion, with 24.2% of child poverty 21% of EU population was at risk of poverty or social exclusion, with 24.2% of child poverty.

  • Impact of social transfers (such as unemployment benefits) on poverty reduction was 34.2%.

  • 8.3% of employed individuals were in-work poor, meaning earning an income that is below the poverty threshold, despite having a job.

What are public health actors doing?

 

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What are public health actors doing?

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The following actions taken by public health actors at (sub)national level can support the implementation of EPSR principle 13.

Portugal - Local public health units in employment networks

In Portugal, unemployment benefits are administered by the Ministry of Labour, but public health units (under the Ministry of Health) are mandated to support vulnerable groups at the municipal level. These units participate in Local Social Inclusion and Employment Networks, alongside employment offices and social services.  

Public health professionals contribute expertise on mental health, addiction, and health literacy, ensuring that unemployed populations benefit from preventive health services and outreach. In practice, this can include mobile health promotion clinics, vaccination drives, or mental health workshops delivered in job centres and community hubs.  

While not a direct cash benefit, this co-location of public health within labour and social policy mechanisms ensures that health determinants are embedded in unemployment support systems. Portugal’s model is notable for its cross-sector collaboration at the local level, with public health authorities taking an active seat in networks aimed at reducing unemployment and social exclusion.  

Ongoing reforms, such as the OECD-backed proposal for a unified social benefit, also create opportunities to embed public health more systematically into income protection, linking adequacy of unemployment support with broader determinants of health and wellbeing.

Portugal - Local public health units in employment networks

Finland – Work ability programme, wellbeing services and integrated support in counties

Since 2023, Finland has reorganised health and social care into wellbeing services counties, overseen by the Ministry of Social Affairs and Health. This reform explicitly integrates health, social and employment services. For unemployed people, this means that activation plans can now include social rehabilitation and health interventions coordinated with labour market measures. For example, people with mental health problems or substance use disorders may receive both treatment and employment counselling under one plan.  

Municipal employment offices cooperate closely with county-level public health units, enabling joint responsibility for outcomes. The Finnish Work Ability Programme aims to increase employment by supporting unemployed individuals to regain the ability to work. Instead of focusing on incapacity, it strengthens people’s ‘readiness to work’, functional capacity, and employability by: 

  • Helping unemployed individuals with partial work ability and long-term unemployed find and retain jobs. 
  • Preventing long-term unemployment and physical and psychosocial incapacity for work. 
  • Improving labour market participation for vulnerable groups. 

Finland’s model illustrates how governance reform can embed health promotion into unemployment protection: benefits remain under the Labour Ministry, but the Ministry of Health ensures that counties deliver joined-up health and rehabilitation services, reducing fragmentation and addressing inequalities. V 

ia the involvement of health professionals such as the Finnish Institute of Occupational Health (FIOH) and the Finnish Institute for Health and Welfare (THL), the programme trains professionals to enhance client employability by focusing on building their health resilience. Training focuses on integrating work ability support into social and health centres, expanding subsidised employment for those facing the greatest challenges, strengthening professional skills, and evaluating project impact and service coordination. 

Finland – Work ability programme, wellbeing services, and integrated support in counties

Germany - Bürgergeld reform of the statutory health insurance funds for the unemployed

Germany’s 2023 Citizen’s Benefit Act reform raised the adequacy of unemployment benefits, with additional expansion of the health sector’s statutory role. Under §20a of the Social Code (SGB V), statutory health insurance funds must finance health promotion for unemployed people, not just provide treatment and care when sick. Jobcentres partner with local health authorities and health funds to provide preventive care, such as nutrition, exercise, and mental health promotion, for all on unemployment benefits.  

This mechanism formally integrates public health financing and expertise into labour market support, ensuring unemployed populations have access to tailored preventive interventions. Some federal states and municipalities have piloted programmes that refer unemployed people directly to local health promotion activities from Jobcentres. The involvement of public health authorities ensures that health inequalities are addressed alongside employability, recognising that poor health is both a cause and consequence of long-term unemployment.  

Germany - Reforming statutory health insurance funds for the unemployed

Norway – Labour and Welfare Administration partnership for the Work Assessment Allowance

Norway’s Labour and Welfare Administration (NAV) was created through the merger of labour, social insurance, and health-related services. While the Ministry of Labour and Social Inclusion leads on unemployment benefits (‘dagpenger’), the Ministry of Health and Care Services is directly involved through health-linked allowances.  

The Work Assessment Allowance (‘arbeidsavklaringspenger’) supports people unable to work due to health problems by combining income security with mandatory rehabilitation and health follow-up. Public health services are engaged in designing and delivering individual activity plans, often including mental health support, physiotherapy, or substance use treatment.  

NAV also runs the Qualification Programme, which targets long-term unemployed people with multiple barriers, including poor health. It provides income close to the minimum wage, plus a tailored plan integrating training, work practices, and health measures. This model stands out for institutional integration of health into unemployment protection, protecting living standards while promoting recovery and re-employment.  

Norway – Labour and Welfare Administration partnership for the Work Assessment Allowance
What EU tools are out there?

EU tools that help implement Principle 13

There are EU policies and instruments that can help relevant actors in the field, including public health, to work together to achieve EPSR Principle 13.

More information about the EU institutions and programmes is available on EuroHealthNet's Health Inequalities Portal.

Youth Employment Support initiative EU Joint Employment Reports Recommendation for support to employment Council Recommendation on integration into the labour market Access to social protection, coordination of social security systems, and the European Labour Authority SURE instrument and the European Globalisation Adjustment Fund (EGF)
Youth Employment Support initiative

In 2020, to mitigate the negative impact of the COVID-19 pandemic for young people, the Commission adopted the Youth Employment Support communication. The Support is built around four strands that together provide a bridge to jobs for the next generation: 

The Reinforced Youth Guarantee is a commitment by all EU Member States (via an adoption of the Council Recommendation) to ensure that all young people under 30 receive a quality offer of employment, continued education, apprenticeship, or traineeship within four months of becoming unemployed or leaving education.  

This initiative emphasises tailored, individualised support, offering guidance, crash courses, or boot camps when upskilling is needed. It aligns with local labour market trends and leverages opportunities from the digital and green transitions.  

All countries have submitted and are implementing their National Youth Guarantee Plans to support young people effectively. 

EU Joint Employment Reports
Recommendation for support to employment
Council Recommendation on integration into the labour market
Access to social protection, coordination of social security systems, and the European Labour Authority
SURE instrument and the European Globalisation Adjustment Fund (EGF)
Read about EU funding and contact points

Available resources

For more supportive policy instruments on the topic, consult our other flashcards:

More information about the EU institutions and programmes is available on EuroHealthNet’s Health Inequalities Portal.

Available EU funding

Available EU funding

Contact points for further assistance

The following contact points and resources may be useful:

Contact points for further assistance

Technical resources

Technical resources
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Have your say

Would you like to share promising policies or practices carried out by your public health institute, which support the implementation of this EPSR principle?

Feel free to reach out to our EuroHealthNet colleague Silvia Ganzerla.

What's next?

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