From learning to steering in
Danish labour market policy
- or from a beautiful swan to an ugly
duckling?
Henning Jørgensen
Professor, Aalborg Universitet, CARMA
henningj@socsci.aau.dk,
Welfare States in Transition, Chicago 15th May 2009
Activation as part of the ”modernization” of
the welfare systems
Activation part of a new intervention
paradigm
 employment as goal and central 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
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)
5
The Nordic Approach:
Macro-economic
policy
Wage policy
Collective
agreements
The social
partners
The welfare state
Income security
Services and LMP
”Flexicurity”
Job protection
Low
Social
protection
Low
UK
USA
High
Denmark
High
Italy
Germany
Sweden
7
The Danish flexicurity system: not a
model – only relationships
• 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
8
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
9
Danish LMP reform 1993/1994
* Content:
- from rules to needs
- individual action plans
- activation offers (mostly education)
* Steering
- regionalization
- the social partners in pivotal positions
10
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)
11
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)
12
New LMP reform of the new government:
”More people to work” 2002/2003
 Individual and flexible contacts with
the unemployed persons
 Job plan
 Use of ”other actors”
 Offers
 guidance and qualification
 trainee service
 wage subsidies
13
New structural reform 2007 - 2009
 Towards one-tier system:
Joint entrance for all kinds of unemployed people into jobcentres
(common for municipalities and public employment service)
 From 14 to only 4 regions:
(now mostly monitoring agencies)
 From corporatist steering to state-municipality steering:
(reduced role of the social partners)
14
Danish ”employment policy” 2007Content:
* 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 (but still rights
and dialogues)
Processes:
* The social partners no longer in pivotal positions:
municipalities takes over decision-making responsibility
* coordination weakened, contractualisation in use
Polity:
*
schizophrenic mixture of control and competition
(decentralized operations – centralized steering)
15
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 (91)
B (77)
S
M
C (14)
LBR
M
KB
Municipal financing of
assistance and efforts
16
A new labour market steering
system from 1.8.2009



Municipalities take over all
responsibilities
Economic incentives to steer activities
Strong monitoring and intervention
from the side of the state
17
Policy changes - assessment
Content
Continuity
Process
Break
Incremental
change
Reproductive
adaptation
Gradual change
Abrupt/
Brusque
change
Regime survival
System
transformation
18
Institutional recalibration of the system


Contractualization introduced at all levels
Performance management system and
”steering” as to results

New measurement system from 2007

Central standards and manuals
19
Evidence-based measurement system




Is partial: includes only some aspects of
LMP (employment records)
Measures only on the supply side: is
one-sided
Register last years performance: too
static
The role of dialogues has been reduced
20
Consequences internally



The frontline people have a new role
definition: agents for a ”behavioral”
policy
Employees will experience deprofessionalization
The PES is becoming a traditional
bureaucracy (run by the
municipalities)
21
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
22
Internal behavioral consequenses:

”Wicked” problems redefined as ”tame” ones

Steet-level bureaucrats have less discretion


No further training and education in the
system
Controlling the unemployed people: they need
to learn how to handle their own situation and
to reshape their attitudes (a moraltheraupeutic problem)
23
Danish policy change now more
”European” as to institutional reform

Policy design separated from policy implementation

MBO is subsituting law making and political regulation


Measurement og monitoring to help performance
management (central steering)
Individualization and moral-therapeutic practices (casemanagement)

Contractualization

Quasi-markets and outsourcing of tasks from PES

Standardization of procedures and ways of operating
24
But: cooperative adaptation is
still the key to good governance

Institutionalizing social dialogues

Placing responsibilities on actors

Developing common norms

Coupling mechanisms

Trust and learning
25
cooperation
trust
learning
coupling mechanisms
norms
coordination
institutional set-up
incentives
goals
resources
motivation
cognition
actors
political system
Danish LMP: from beautiful swan
to an ugly duckling?
 LMP no longer ”owned” by the social partners
 In LMP: Threats and sanctions to become
dominant (paternalistic values introduced)
 From qualification measures (learn-fare) to
”shortest possible way to a job” (work-first)
 Organizational change from a learning system to
central steering of a fully bureaucratized system
 Leaving Danish flexicurity behind?
27