IESET.
Hypotheses·welfare architecture·unemployment_benefit_generosity_employment_drag

In a broad-country panel 1990-2019, higher unemployment-benefit generosity (proxied by public social expenditure on unemployment programmes as a share of GDP and by the OECD net replacement rate where available) predicts lower employment-to-population ratios and higher structural unemployment, controlling for cyclical conditions, institutional quality, and demographic structure.

The directional claim is that a 5 percentage-point increase in net replacement rate is associated with at least a 1 percentage-point decrease in the employment-to-population ratio.

PARTIALengine/runs/unemployment_benefit_generosity_employment_drag

PARTIAL — coef=-85.87, p=0.553 (above α=0.1); direction inconclusive

confidence cueThe result is useful, but not decisive. Treat it as a clue, not a settled conclusion.

policy briefMixed or noisy

In ordinary language

In plain terms, this asks whether unemployment benefit expenditure income is actually linked to better or worse employment to population ratio from 1990 to 2019.

plain answer

The evidence is suggestive but not decisive. coef=-85.87, p=0.553 (above α=0.1); direction inconclusive

why it matters

This matters because welfare architecture claims should change belief only when they survive a pre-declared empirical test.

how the test works

It compares 38 country or place units from 1990 to 2019, using a panel fe design, with fixed effects for country and year.

what was measured
What changed
  • Unemployment benefit expenditure income
  • Social expenditure income
What we checked
  • Employment to population ratio
  • Unemployment rate
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

0 input datasets, 0 unresolved missing series, provenance status: no input vintages recorded.

Results

engine/runs/unemployment_benefit_generosity_employment_drag
1007550250199020052019USAGBRDEUFRAITAESPNLD
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show employment_to_population_ratio across 38 sampled countries over 1990–2019.
The shapes above are stylised — none of the lines are real data.
Placeholder for unemployment_benefit_generosity_employment_drag. Published chart will be generated from engine/runs/unemployment_benefit_generosity_employment_drag/chart_data.json.

Who has skin in the game — schools predicting on this

8 schools list this hypothesis as a test of their position. The chips below are school-level scoreboard outcomes, not a second hypothesis verdict.

hypothesis verdict vs scoreboard outcome

The banner verdict judges this hypothesis as written. The scoreboard asks whether each school's polarity-corrected prediction was right. Raw status is not a school win: SUPPORTED supports schools that needed SUPPORTED, but refutes schools that needed REFUTED.

Degrowth / Ecological Macroeconomicswins if MIXEDpartial/no-callDemocratic Socialism (Bernsteinian revisionism + modern)wins if REFUTEDpartial/no-callEco-Socialism / Red-Greenwins if REFUTEDpartial/no-callMarket Socialism (Lange-Lerner tradition)wins if REFUTEDpartial/no-callMarxian Political Economywins if REFUTEDpartial/no-callMarxism-Leninism (central-planning implementation)wins if REFUTEDpartial/no-callModern Monetary Theorywins if REFUTEDpartial/no-callPost-Keynesianwins if REFUTEDpartial/no-call

Pre-registration

registration ordering unverified
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z
run generated · 2026-06-29T17:55:02Z
Run timestamp predates this path's first git-add commit (rebase, rename, or pre-git local run). Spec hash is still the path's first-add commit — not repository HEAD — but ordering is not a clean pre-registration proof.

In a broad-country panel 1990-2019, higher unemployment-benefit generosity (proxied by public social expenditure on unemployment programmes as a share of GDP and by the OECD net replacement rate where available) predicts lower employment-to-population ratios and higher structural unemployment, controlling for cyclical conditions, institutional quality, and demographic structure. The directional claim is that a 5 percentage-point increase in net replacement rate is associated with at least a 1 percentage-point decrease in the employment-to-population ratio.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

SUPPORTED if β1 (benefit generosity) is negative and significant at p<0.10 for both employment-to-population and unemployment rate. PARTIAL if negative and significant for unemployment but not employment (search- duration effect without exit reduction). REFUTED if β1 is positive and significant at p<0.10. INFORMATIVE: excluding Nordic countries should not eliminate the negative sign; if it does, the result is driven by the Nordic model.

formal test & threshold
test:      panel_fe_unemployment_benefit_employment_drag
threshold: β_benefit (employment/pop) < 0 at p<=0.10  AND β_benefit (unemployment) > 0 at p<=0.10  AND Ex-Nordic robustness retains sign.

Method

Template
panel_fe
Fixed effects
country, year
Clustering
country
Sample
38 countries · 1990 – 2019
Evidence type
associational

Two-way FE panel: employment = β0 + β1*benefit_generosity + controls + FE. Robustness: (1) exclude Nordic countries (dominant high-benefit cases); (2) use 5-year non-overlapping averages to capture structural rather than cyclical unemployment; (3) instrument benefit generosity with left-party government seat share (political-economy instrument); (4) subsample by EPL strictness (generosity may matter less when firing is already costly).

Data

VariableSourceTransform
employment_to_population_ratio
outcome
ilostat:EMP_2EMP_SEX_AGE_NBtier 2
level
unemployment_rate
outcome
ilostat:UNE_2EAP_SEX_AGE_RT_Atier 2
level
unemployment_benefit_expenditure_gdp
treatment
oecd:DSD_SOCXtier 2
level
social_expenditure_gdp
treatment
world_bank_wdi:GC.XPN.TOTL.GD.ZStier 2
level
real_gdp_growth
control
world_bank_wdi:NY.GDP.MKTP.KD.ZGtier 2
level
institutional_quality
control
wgi:RL.ESTtier 4
level
working_age_population_share
control
world_bank_wdi:SP.POP.1564.TO.ZStier 2
level
inflation_rate
control
world_bank_wdi:FP.CPI.TOTL.ZGtier 2
level
trade_openness
control
world_bank_wdi:NE.TRD.GNFS.ZStier 2
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — unemployment_benefit_generosity_employment_drag

Verdict: PARTIAL — coef=-85.87, p=0.553 (above α=0.1); direction inconclusive

Pre-registration

  • Claim: In a broad-country panel 1990-2019, higher unemployment-benefit generosity (proxied by public social expenditure on unemployment programmes as a share of GDP and by the OECD net replacement rate where available) predicts lower employment-to-population ratios and higher structural unemployment, controlling for cyclical conditions, institutional quality, and demographic structure. The directional claim is that a 5 percentage-point increase in net replacement rate is associated with at least a 1 percentage-point decrease in the employment-to-population ratio.
  • Falsification rule: SUPPORTED if β1 (benefit generosity) is negative and significant at p<0.10 for both employment-to-population and unemployment rate. PARTIAL if negative and significant for unemployment but not employment (search- duration effect without exit reduction). REFUTED if β1 is positive and significant at p<0.10. INFORMATIVE: excluding Nordic countries should not eliminate the negative sign; if it does, the result is driven by the Nordic model.
  • Falsification test: panel_fe_unemployment_benefit_employment_drag

Estimate

  • Method: linearmodels.PanelOLS
  • Coefficient (treatment): -85.87
  • Std error: 144.6
  • p-value: 0.553
  • Observations: 611, countries: 30
  • Within R²: -0.552
  • Fixed effects: entity=True, time=True
  • Clustering: country

Variables resolved

  • ilostat:EMP_2EMP_SEX_AGE_NB → employment_to_population_ratio (outcome, publisher=ilostat, n=10188)
  • ilostat:UNE_2EAP_SEX_AGE_RT_A → unemployment_rate (outcome, publisher=ilostat, n=10188)
  • oecd:DSD_SOCX@DF_SOCX_AGG → unemployment_benefit_expenditure_gdp (treatment, publisher=oecd, n=1400)
  • world_bank_wdi:GC.XPN.TOTL.GD.ZS → social_expenditure_gdp (treatment, publisher=world_bank_wdi, n=5156)
  • world_bank_wdi:NY.GDP.MKTP.KD.ZG → real_gdp_growth (controls, publisher=world_bank_wdi, n=13897)
  • wgi:RL.EST → institutional_quality (controls, publisher=wgi, n=5296)
  • world_bank_wdi:SP.POP.1564.TO.ZS → working_age_population_share (controls, publisher=world_bank_wdi, n=16965)
  • world_bank_wdi:FP.CPI.TOTL.ZG → inflation_rate (controls, publisher=world_bank_wdi, n=7550)
  • world_bank_wdi:NE.TRD.GNFS.ZS → trade_openness (controls, publisher=world_bank_wdi, n=10714)

Generated by scripts/run_panel_fe.py at 2026-06-29T17:55:02+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Authored framework. Read the transparency note.