Number of social security recipients continues to grow

• Number of social security recipients back at level late 1990s
• Sharp increase among young people in first quarter

Statistics Netherlands announced today that the number of social security recipients rose by 13 thousand to 426 thousand in the first quarter of 2014.  Despite indications that the economy is picking up steam, this is not borne out by the number of social security recipients. They are usually more distant from the labour market and it appears to be more difficult for them to find jobs than, for example, for people who receive unemployment benefits.

Aftermath of poor labour market situation in 2013

Since 2009, the number of social security recipients too young to claim old age pensions has risen by more than 120 thousand. Early 2013, the growth rate accelerated, as the situation on the Dutch labour market deteriorated. Many jobs were lost and the number of people on unemployment benefits grew. A minority in this group became dependent on social security.
Recently, Statistics Netherlands stated that there were indications of economic recovery. Dutch entrepreneurs are less pessimistic, more prepared to invest and they anticipate no further staff cuts. The number of unemployment benefits is decreasing and the number of job vacancies is increasing, but, as yet, the number of social security recipients has not declined. Most people living on social security have been unemployed for a relatively long period of time and on average their chances on the labour market are fairly limited. By the end of March this year, 426 thousand people in the Netherlands were receiving social security benefits. Such a large number has not occurred since the late 1990s.

Substantial increase among young people

Proportionally, the most substantial increase in social security recipients in the first quarter of 2014 was recorded in the age category under 27. With nearly 7 percent, the increase was more dramatic than in older age categories. The number of young social security recipients is currently above the level of June 2013. Between June 2013 and the first quarter of 2014, the number of young people receiving social security benefits had in fact fallen. This irregular pattern among young people is partly due to the fact that many of them have short-term employment contracts. They are not able to build up entitlement to unemployment benefits. As a result, they will become dependent on social security after a short period of time once they are unemployed. On the other hand, they are more successful when it comes to finding new jobs.