Describing change in labour market policy. A conditionality approach

1. Describing change in labour market policy.A conditionality approach Jochen Clasen University of Edinburgh RECWOWE/ESPAnet summer school 2007

2. Structure • Definition and boundaries of LMP • Indicators of change • Levels and levers of conditionality • Applying the framework • Some concluding remarks

3. 1. Definitions of LMP • Labour demand and labour supply • Active programmes • e.g. training, work experience, job search support (focus: job entry, employability) • Passive benefits • e.g. unbemployment benefits, early retirement, lone parent benefit (focus: temporary job exit)

4. 1. Active or passive? • wage subsidies (tax credits) vs. partial UB? • e.g. combination (wage and UB) • tax credits not in ALMP budget • short-term working, bad weather payments • leave schemes (education, child care) • regular UB payments? • conditional • better job matching • Industrial restructuring >> the active (productive) role of passive benefits • Some training/work experience programmes

5. 2. Describing change – indicators? 1. Social Expenditure – LMP expenditure 2. Institutional parameters 3. Social rights indicators

6. 2. Describing change – indicators? 1. Social Expenditure – LMP expenditure - net social expenditure - adjusted expenditure (e.g. by number of unemployed) - participants in ALMP - problem of displacement (working-age benefits)

7. 2. Describing change – indicators? 2. Institutional parameters - funding mode (tax, contributions) - responsibilities, management - benefit type (flat-rate; earnings-related) - benefit access (insurance, means-tested)

8. 2. Describing change – indicators? 3. Social rights indicators a. replacement rates - net or gross? - UB or unemployment compensation package? - relative to which wage level? b. coverage - or recipiency rates? c. composite indicators (de-commodification) >>but what about social obligations?

9. 3. Levers of conditionality • Conditionality as cornerstone and basis for risk management in welfare states • Three levels of conditionality: • 1. Conditions of circumstance • 2. Conditions of category • 3. Conditions of conduct

11. 3. Applying the framework • unemployment protection • long time periods • four countries • legislation • (not administration/implementation) • stylised accounts

12. Conditionality Shifts in Unemployment Benefit Reforms in the UK I, II, III: levels of conditionality - = tighter conditionality; + = looser conditionality; / = no significant change

13. Conditionality Shifts in Unemployment Benefit Reforms in Germany I, II, III: levels of conditionality - = tighter conditionality; + = looser conditionality; / = no significant change

14. Conditionality Shifts in Unemployment Benefit Reforms in France I, II, III: levels of conditionality - = tighter conditionality; + = looser conditionality; / = no significant change

15. Conditionality Shifts in Unemployment Benefit Reforms in Denmark I, II, III: levels of conditionality - = tighter conditionality; + = looser conditionality; / = no significant change

17. Main results • all 4 countries altered all 3 levers of conditionality (category; eligibility; behaviour) • clearest chronological pattern in the UK • Danish pattern similar to British (at level I and III) • German and French reforms distinctive • 2nd level privileged policy lever • differential effects (deeper dualism) • late turn away from labour market exit strategies and towards activation policy

18. Some concluding remarks • what is the point? • comparative (empirical) investigation of often touted ‘new model’ (paradigm) in the management of social risks • systematic identification of patterns - new questions for causal & theoretical analyses • conditionality understood as merely one, albeit crucual, indicator