Mr. R?n?n Hession:

We try to use that language carefully. In the international literature, that is the way it is discussed, as it is in the commentary we had on the pay-related benefit from the ESRI and the Commission on Taxation and Welfare. I was trying to reiterate faithfully the point that was being made to us. International literature shows that replacement rates do have an influence on decision-making, but I agree that our overall experience dealing with jobseeker's benefit is that people do want to work. We saw that with the pandemic unemployment payment, PUP, where even in cases where people had replacement rates above 100%, that is, they were earning more on the PUP than when they were working, they still went back to work quickly when the country reopened. We do not mean it in a pejorative way but, obviously, people make intelligent decisions for their families.

We have had good engagement with experts in the OECD about their international experience. In some cases, there is a positive work outcome where there is a higher payment. People take a little bit longer to go back to work, but they get a job that is a better match for their skills. A high-skill person does not panic due to a shortage of income and go back and take a lower-skilled job, which is worse overall for the labour market. Then we get better job matching, which is ultimately enriching for the labour market. That is certainly drawn out in the literature.