Gross replacement rates (GRR) measure gross unemployment benefit levels as a percentage of the previous gross earnings.
The index available here is defined as the average of the gross unemployment benefit replacement rates for two earnings levels (67 and 100% of the Average Production Worker wages), three family situations (single person, one-earner couple and two-earner couple), and three durations of unemployment (1 year, 2 to 3 years, and 4 to 5 years).
For further details, see OECD (1994), The OECD Jobs Study (chapter 8) and Martin J. (1996), “Measures of Replacement Rates for the Purpose of International Comparisons: A Note”, OECD Economic Studies, No. 26. Pre-2003 data have been revised.
Please note: Net Replacement Rates (NRR) provide a more complete measure of benefit generosity and income maintenance, especially when compared over longer periods of unemployment.
Updating and maintainenance of the gross replacement rate (GRR) index, originally constructed as part of the OECD Jobs Study (1994), was reliant on access to Average Production Worker (APW) wages. These data have not been collected by the OECD since 2005 and the Historical GRR series has been dismissed. Instead, the OECD provides annually since 2001 the NRR indicator based on a slightly different definition of the reference wage, the Average Wage (AW), for most OECD and EU countries.
Calculations for families with children assume 2 children aged 4 and 6 who do not use formal childcare.