From a beautiful swan to an ugly
duckling?
– Danish activation policy since 2003
Henning Jørgensen
Professor, Aalborg Universitet, CARMA
henningj@socsci.aau.dk,
ASPEN/ETUI conference, Brno, March 2009
Activation as part of the ”modernization” of
the welfare systems
Activation part of a new intervention
paradigm
 employment as goal and the integration mechanism
 new moralism build into contractual arrangements
 reinventing identities (economic citizenship)
Activation regimes: diversity




different concepts of active labour market policy
LMP expenditures differ strongly
LMP priorities differ strongly
LMP procedures differ strongly
2
Expenditures on Labour market policy
2005
Denmark
Netherlands
Belgium
Germany
Finland
France
Sweden
Spain
Active
Portugal
Austria
Passive
Switzerland
Norway
Ireland
Italy
Canada
UK
Japan
USA
0
1
2
3
Spending as percent of GDP
4
5
3
Construction of activation systems
based on:
Egalitarian values
 social logic, outcome of struggles
 Beveridgean rationale
Paternalistic values
 functional logic, outcome of construction
 Bismarckian rationale
The Danish activation system of the
1990´es based on egalitarian values
4
Activation systems – look at more
levels:
 Activities: common discourses – different
qualities/systems/models
 Steering arrangements: corporatism vs.
contractualization
 Financing: public-private mobilization of
resources/incentives based arrangements
5
Contextualization of activation
systems
 Labour market situations and IR systems
 Welfare state traditions
 Macro-economic regimes
 Learning capability of people and
organizations
 Power relationships
 EU influence in national system
Collective mechanisms and collective
memories decisive as to successfully
(re)integrating individuals and reforming
public policies
6
The Danish labour market system
 A voluntaristic bargaining system
(collective agreements since 1899)
 A political interventionist strategy




densely organised labour market
negotiated regulation of labour market questions
active labour market policies (especially since 1994)
generous unemployment benefit system (socializes
costs of flexibility)
7
Denmark:
Socio-economic and political context
 Economic problems and high unemployment
during the 80es and beginning of the 90es
 New Social Democratic lead governments
1993-2001
 New Policy-Mix of offensive macro-economic
policy and active LMP
 Readjustments of policy in 1995, 1996 and
1999 in accordance with recovery
 New Liberal-Conservative government in 2001
– and a new LMP introduced
8
The Nordic Approach:
Macro-economic
policy
The social
partners
Wage policy
The welfare state
Collective
agreements
Income security
Services and LMP
”Flexicurity”
Job protection
Low
Social
protection
Low
UK
USA
High
Denmark
High
Italy
Germany
Sweden
10
The Danish flexicurity system
• Strong rotation between jobs
• Low job security
The primary axe of the
Flexicurity model
Social
security
Flexible
labour
market
• Quick structural adaptation
The social partners
• Income security
• High percieved job security
Active
labour
market and
educational
policies
Employment
security
11
Work motivation high in Scandinavia
Question: ”I would be glad to work even if I did not have a need for the money”
Country
Sweden
Denmark
Norway
Switzerland
Japan
Germany
USA
Hungary
Portugal
UK
France
Netherlands
Cyprus
Ireland
Spain
Czech Rep.
Slovenia
Bulgaria
Agree
(totally or partly) %
75
78
74
70
69
71
60
57
63
55
53
52
47
52
52
47
43
36
1) Difference between ”agree” and ”disagree”
Source: International Social Survey Programme (ISSP), 1997.
Percentage Difference
Index % 1)
64
62
61
52
51
50
36
35
34
27
21
21
19
18
15
15
0
-7
12
Structure of tax and contribution receipts
13
Danish LMP reform 1993/1994
* Content:
- from rules to needs
- individual action plans
* Steering
- regionalization
- the social partners in pivotal positions
14
Activation in Denmark
Before 1994
Measures
Work
After 1994
Measures
Arbejde
Work
15
Unemployment figures (%), 1994-2006
12
11
10
9
8
7
6
5
4
3
2
1
0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Denmark
OECD, Employment outlook, 2007.
Germany
EU (average)
16
LMP regimes – employment rates 2002
17
Denmark: the Phillips curve flattened out!
Wage increase (percentage)
25
1974
20
1973
15
1975
1971
1961
1966
19651970
19691968
1972
1967
1962
10
1976
1979
1977 1980
1978
1987
1959
1964
1963
1981
1956
1960
5
1982
1986
1957
1958
1998
2001
20021999
2000
1997
1983
1988
Labour market policy
reform
1984
1985
1991
19961989
1990 1995
1992
1994
1993
0
0
Source: ADAMs databank
2
4
6
8
10
12
14
Unemployment (percentage)
18
Some basic figures for Danish flexicurity:
”the security of the wings” (up to 2004)
20 procent of the
workforce experience
unemployment each
year
30 procent change
jobs each year
13 percent of the
workforce complete a
CVT-courses each year
Flexible
labour
market
CVT
ALMP
Social
security
11 procent in
ALMP each year
19
Public finances in Denmark, % of GDP
1995
2004
General government expenditure
Denmark
Total OECD
60.3
42.4
56.3
40.8
Tax and non-tax receipts
Denmark
Total OECD
58.0
38.4
58.6
37.5
Budget balances
Denmark
Total OECD
- 2.3
- 4.0
2.3
-3.3
Government debt
Denmark
Total OECD
78.4
73.7
49.4
76.4
20
New LMP reform of the new government:
”More people to work” 2002/2003
 Individual and flexible contacts with
the unemployed persons
 Job plan
 Offers
 guidance and qualification
 trainee service
 wage subsidies
21
Those outside - Who are they?
22
New structural reform 2007 - 2009
 Towards one-tier system:
Joint entrance for all kinds of unemployed people in jobcentres
(common for municipalities and public employment service)
 From 14 to only 4 regions:
From steering bodies to mostly monitoring agencies
 From corporatist steering to state-municipality steering:
Reduced role of the social partners
 Strong, big municipalities in pivotal positions
 More rule-based efforts
 More standardized measures
 Erosion of regionalized labour market policy
 The social partners without much power and motivation
23
Danish employment policy 2009
Content:
* Shift of priority from fighting unemployment towards
increasing the supply of labour
* Activation to become threatening to unemployed people
in order they will find a job themselves
Processes:
* The social partners no longer in pivotal positions:
municipalities takes over decision-making responsibility
* coordination weakened in the system
Polity:
*
schizophrenic mixture of control and competition
(decentralized operations – centralized steering)
24
The Labour Market Steering System in Denmark
2006
Parliament
National
Employment Board
Minister of Employment
Central
”Arbejdsmarkedsstyrelsen”
Labour Market Administration
Regional
”Arbejdsformidlingen” (AF)
Regional Labour
Market Board
Employment Service
County
Municipalities
Goals
Resources
Evaluations
Educational
Institutions
Unemployment
Offices
Firms
25
The Labour Market Steering System in Denmark
2007 - 2009
State financing
unemployment benefits and
efforts
Minister of Employment
Regional service
Region of employment
BER
RBR
Monitoring of effects and
results
Jobcentres
B
S
C
K
LBR
K
KB
Municipal financing of
assistance and efforts
26
The new labour market steering
system from 1.8.2009




Municipalities take over responsibilities
Economic responsibility for
unemployment transferred as well
Economic incentives to steer activities
Strong monitoring and intervention
from the side of the state
27
Danish LMP: from beautiful swan
to an ugly duckling?
 LMP no longer ”owned” by the social partners
 In LMP: Threats and sanctions for those who do
not have the ”right” attitudes and motivation
 From qualification measures to ”shortest possible
way to a job”
 Towards a unified benefit system?
 Leaving Danish flexicurity behind?
28
Policy changes - assessment
Content
Continuity
Process
Break
Incremental
change
Reproductive
adaptation
Gradual change
Abrupt/
Brusque
change
Regime survival
System
transformation
29
Ways of creating policy change
”Crowding
out”
”Breed of new
elements”
”Reshaping”
”Exhaustion”
Alternative
solutions to the
present
institutions
New elements to
be connected to
present
institutions
Re-use of old
institutions for
new purposes
Gradual erosion
of institutions
over time
Mechanisms
Shortcomings
Differentiated
growth
New
interpretation
Use up
Execution
Openings for
new behavior
Quicker growth
of new elements
Gap between
rules and
practice
Change of
normal practice
Invasion of
foreign ideas
New advantages
connected to
the growth
Unintended
conflicts to be
solved
Falling returns
Principal
features
30
Content
”Crowding out ”Breed of new
elements”
”Reshaping”
”Exhaustion”


from ”learn-fare” to
”quickest possible
way to a job”

The state run
public employment
service system
abolished

firm contacts with
the unemployed
persons

Gender equality
”mainstreamed”
and forgotten
Activation changed
and downsized

Regional LMP
eroded

Network activities
having a new local
basis

Motivation of
private actors to
participate
lowered

discourses on
individualisation
of risks

introduction of
”other actors”

Outsourcing of
activities
Dutch examples
to be copied


From motivation
to control



From individual
action plans to
narrow job plans


Regional LMP
substituted by
local discussions
Focus on effects
only –
downplaying
regional strategic
discussions
14 job centres with
municipal
leadership only

Ceiling of social
assistance
Cross-profesional
unemployment
insurance funds

Low start help for
immigrants

New actor system


Local labour
market boards
instead of regional
ones
The role of the social
partners changed
from policy makers
to monitoring agents

Process
Municipality
based actions

Local job center
activities to be
monitored

New evalutation
practices

Uncoordinated
control systems
31
Implementation depends on organizing principles
The labour market calls for shifting and dynamic interventions:
But the jobcentres are transformed into traditional bureaucracies!
Tasks
Uniform
Variable
Technologies
Standardized
Bureaucracy
Professional
organisation
Non-standardized
Management
Learning
organisation
32
Internal behavioral consequenses:

”Wicked” problems redefined as ”tame” ones

Steet-level bureaucrats have less discretion


No further training and education in the
system (e.g.: you just need to know how to
act according to an order!)
Controlling the unemployed people: they need
to learn how to handle their own situation and
to reshape their attitudes
33
External actors institutionalizing
cooperation
competition
”Cartel”-like
competition
”Market”competition
individual
reasons
collective
reasons
Partnership
Network
cooperation
34
cooperation
trust
learning
coupling mechanisms
norms
coordination
institutional set-up
incentives
goals
resources
motivation
cognition
actors
political system
Why do ideas travel?
The new institutionalists speak of ”isomorphic
mechanisms”
•
Coercive
(rarely)
•
Normative
(perhaps: but norms only direct
imitation)
•
Mimetic
(yes!)
36
Imitation and invention go hand in hand
a)
Imitation a first cognitive step
b)
Imitation weakens the original attraction of
the invention
c)
Imitiation has to be adapted to national
institutional settings and traditions
multiple and intertwined processes
37
Looking for national solutions:
-
Translation is a vehicle
-
Imitation its motor
-
Fashion sits at the wheel
or you can use present Danish activation system
as an non-inspiring example: it is an ugly
duckling!
38
39
Forms of activation systems
Approach
Principal system of
social integration
Active mechanisms
Role of passive
support
I. Liberal
Labour market and
family
Competition/
wages/incentives
family
responsibilities
Negative work
incentives, and
help for the poor
only
II. Paternalistic
Labour market
participation
Paternalistic help
and strong
sanctions
Measures in cash
depending on
complying with
rules and advices
III. Welfare
security
Income security
through public
support
(Un)conditioned
basic income
Diagnostic
assessment of
basic needs
IV. Activation of
social protection
Active participation in activation
and educational
systems
Activation
measures and
supportive policies
Positive
incentives and
public supply of
offers
40