Stress Test Job Loss and Disability of Employees and Self-Employed

Without an income shock, 93% of all households have sufficient means to continue paying their fixed and necessary expenses for two years or longer. Many households can absorb an income shock for a longer period. For employees, this applies to 82% in case of job loss and 91% in case of disability.

For self-employed persons, the CPB examined two variants. Without insurance, 70% of the self-employed can continue to pay fixed and necessary costs for at least two years after an income shock due to disability. With a public disability insurance with a waiting period of one year, this increases to 75% of the self-employed. On the other hand, a significant portion (15.4%) of Dutch entrepreneurs can only continue to pay fixed and necessary expenses for a few months after an income shock.

Besides self-employed persons, young people, tenants, and single earners are vulnerable groups. They have lower incomes, smaller buffers, and spend a relatively large part of their income on fixed and necessary expenses. As a result, their financial reserves are depleted more quickly after a shock. Moreover, young people often have fewer unemployment and disability rights and have accumulated less wealth.