The digital economy and the future of European welfare states

As a consequence of new technology, labour markets are changing. This article’s central aim is to discuss variations among welfare states in Europe to adjust to changing labour markets. These variations in adjustment suggest that some welfare states are more prepared than others, including their capacity to ensure their sustainable financing. In the years to come, the predicted impact of technological development on labour markets will be huge. Impacts will include stronger “dualization” and new cleavages between “insiders” and “outsiders”. Fewer industrial jobs are to be expected, and service‐sector employment faces a risk of decline due to automation. While the creation of new jobs is likely, it remains to be seen whether these will replace the number of jobs destroyed, leaving the risk that many people whose skills become obsolete will become unemployed in the short as well as the longer term. Furthermore, even if the same number of jobs are eventually created, there will be a period of transition. In the light of this, welfare states will be challenged, not only in how they can finance their activities but also in terms of the threat posed to social cohesion by emerging labour market “winners” and “losers”, with an accompanying higher risk of increasing inequality. The article offers suggestions as to how welfare states may cope with the changes related to the financing of welfare states, and how active labour market policy can be part of the response to help alleviate the expected dramatic changes. Also required is a discussion on the annual average number of hours people will work and how this might be a factor in lower future levels of unemployment.     

Employers' attitudes towards long‐term unemployed people and the role of activation in Switzerland

Over the last few years, most OECD countries have extended their activation policy to new groups of non‐working people, including the long‐term unemployed (LTU). However, it is widely known that employers tend to regard LTU people as potentially problematic persons. This is likely to constitute a major obstacle for long‐term unemployed jobseekers. On the basis of a survey among employers in a Swiss canton (N = 722), this article aims to shed light on the perception employers have of the long‐term unemployed and whether this may matter for their recruitment practices. It also asks what, from the employer point of view, may facilitate access to employment for an LTU person. A key finding is that large companies have a worse image of the long‐term unemployed and are less likely to hire them. Furthermore, independent of company size, a test period or the recommendation of a trustworthy person is seen as the factors most likely to facilitate access to jobs for LTU people.     

Employers' perspectives on benefit conditionality in the UK and Denmark

This article examines the under-explored demand-side of active labour market policies (ALMPs). Based on interview data from a comparative study of the UK and Denmark, the paper analyses employers' perspectives and experiences of ALMPs. In both countries, employers were favourably disposed towards employing unemployed jobseekers but held negative views on conditionality. First, benefit conditionality led to employers receiving large numbers of unsuitable and unfiltered job applications, with associated negative resource impacts. Second, employers perceived this as a product of ‘box ticking' and compliance targets. Finally, employers criticised policy and media rhetoric for focusing solely on the supply-side and for problematizing unemployed candidates. The paper argues that these crucial, but neglected, employer perspectives demonstrate that the current benefit conditionality regime in the UK risks irrevocably ‘tarnishing' candidates, which undermines, rather than enhances, their chances of securing employment through ALMPs. This unique dataset provides further evidence that the current direction of policy requires urgent and radical re-thinking.     

Youth‐oriented active labour market policies and economic crisis: Explaining policy effort in Greece and Portugal

The starting point of this study is the implementation of seemingly similar youth‐oriented labour market policies in Greece and Portugal. Both countries have suffered high youth unemployment rates and have been pressured to restructure their labour market as part of the rescue programmes adopted during the European sovereign debt crisis. Despite convergence in terms of policy trajectories, there is a significant divergence in employment outcomes. In Portugal, youth‐oriented policies were better‐targeted and structured. Their implementation has been more effective and has involved the social partners from the outset of the crisis. In Greece, policy design failures, administrative weaknesses and unfavourable macroeconomic conditions have limited the dynamics of youth‐oriented policies thus increasing youth insecurity. Τhe analysis suggests that convergence in policy content can be compatible with divergence in terms of outcomes.     

Moving targets: Target groups of active labour market policies and transitions to employment in Europe

This study drew on recurrent debates related to labour market mobility among the unemployed and those outside the labour force and asked to what extent active labour market policies (ALMP) increase employment in these two groups. By utilising new programme‐level data on ALMP, the study analysed the impact of core programmes directed towards registered unemployed; peripheral programmes that target the inactive part of the working age population; and mixed programmes targeting both groups. The programme data were combined with individual‐level panel data from the European Survey on Income and Living Conditions and analysed using multilevel analysis. The main results show that both resources devoted to programmes and their size were related to employment transitions. Transitions among the unemployed were mainly associated with spending on core programmes, whereas the inactive seemed to benefit from increased spending on all types of programmes, as well as increased scope of mixed programmes.     

Work,social protection and the middle classes: What future in the digital age?

The digitalization of the economy can be interpreted as an industrial revolution, a series of technological innovations associated with new practices and new business models. As for previous industrial revolutions, a phase involving the destruction of existing systems and structures is driving a profound transformation of the world of work and the development of new sectors of activity and new jobs, including changes in the labour market and in the types of jobs created. This puts into question the position of the middle classes, and presents new challenges for social protection. This article seeks to understand the impacts of digital technology on the economy and employment, including the phenomena of labour market polarization. It describes the new forms of employment and work and analyses the social risks and the likely ramifications for the middle classes in the digital age. In turn, new possibilities for social protection in the digital age are discussed. The article concludes that there is a need to re‐evaluate jobs that involve the provision of personal and care services, including to support social investment, to strengthen the future prospects of the weakened middle classes.     

Tipping points: what participants found valuable in labour market training programmes for vulnerable groups

Graham JR, Jones ME, Shier M. Tipping points: what participants found valuable in labour market training programmes for vulnerable groups
Int J Soc Welfare 2010: 19: 63–72 © 2009 The Author(s), Journal compilation © 2009 Blackwell Publishing Ltd and the International Journal of Social Welfare. This article is based on face‐to‐face and focus group interviews with 72 people who have experienced ongoing difficulties integrating into Canadian labour markets, and who had completed a labour market training programme. Participants were representative of at least one (and often several) categories that inhibited labour market integration: low socio‐economic status, Aboriginal status, single parenthood, criminal justice history and being disabled. The major finding: respondents associated life skills rather than labour‐market skills with success in overcoming personal barriers to securing and maintaining employment. Life skills involved developing life meaning and interpersonal skills related to personal cognition and behaviours. Valued cognitions identified by participants were gaining a new perspective on life and realising that the past impacts the present. Valued behaviours identified by participants included actions associated with understanding personal characteristics and motivations, and building positive social support and social capital. These insights provide theoretically rich considerations for labour market training programmes and could considerably influence labour market policies and practices, particularly since most training programmes and policies are geared toward human capital (i.e. labour‐market skills) accumulation.     

Deciphering Deservedness: Canadian Employment Insurance Reforms in Historical Perspective

In 2012, the Government of Canada introduced reforms to Employment Insurance (EI), Canada's primary income security programme for the unemployed. The changes entailed new requirements for particular types of claimants to apply for and accept jobs of increasingly less pay, and codified the efforts claimants must demonstrate in job searches to maintain benefits. These measures leave many claimants little choice but to accept precarious employment as a means of financial survival. The central claim of the article is that recent EI reforms are not adequately understood as an instance of neo‐liberal activation. Instead, they must be situated in a long history of attempts to categorize the unemployed as deserving or undeserving of income security on the basis of their work history and perceptions of their willingness to work. Through a survey of different periods of unemployment policy in Canada, we demonstrate continuity in authorities' efforts to differentiate the unemployed into categories of worthy and unworthy. Within this history, however, the 2012 reforms are unprecedented in the extent to which they reorient the EI programme to service low wage labour markets. By way of conclusion, we suggest that the current EI programme exacerbates insecurities for the growing segment of workers in precarious employment.     

Laziness or liberation? Labor market policies and workers' attitudes toward employment flexibility

This study examined the relationship between labor market policies and employees' willingness to make concessions in order to avoid unemployment. In contrast to previous work that analyzed the behavior of employers and the unemployed, we examined how labor market policies influence employees' flexibility. Multilevel modeling techniques were applied to a data set that was created by combining individual‐level data from the International Social Survey Program (ISSP) with country‐level information from the Organization for Cooperation and Economic Development. The main findings of our analyses were that dismissal protection and unemployment benefits do make a difference to employees' willingness to make concessions, and that the relationships between the willingness to make concessions and labor market policies are nonlinear. Substantively, these nonlinear relationships suggest that employees' willingness to be flexible is negatively associated with both “too much” and “too little” social protection.     

What works best when? The role of active labour market policy programmes in different business cycles

Nordlund M. What works best when? The role of active labour market policy programmes in different business cycles Int J Soc Welfare 2011: 20: 43–54 © 2009 The Author, Journal compilation © 2009 Blackwell Publishing Ltd and the International Journal of Social Welfare. At what point in a business cycle do long‐term unemployed persons gain most from participation in active labour market policy programmes (ALMP) as compared with openly unemployed persons? This article studies this question from the perspective of individual human capital with the hazard of labour market exit and chances of future labour market stability and equal post‐unemployment income as output variables. All the long‐term unemployed in Sweden were followed on a four‐year basis, with 1993 (recession) and 1999 (boom) as starting years. The study shows mainly positive effects among participants regardless of the state of the market. However, ALMP training has a ‘bridging’ effect over different labour market conditions, and a quick return to the regular labour market is, therefore, not as important for the success of participation as it is among ALMP employment participants.     

The interaction of pillars in multi‐pillar pension systems: A comparison of Canada,Denmark, Netherlands and Sweden

Canada, Denmark, the Netherlands and Sweden have advanced multi‐pillar pension systems. Using micro‐simulations, this article presents a close examination of the interaction of pillars in these countries. The relative importance and the role of the different pension pillars vary from country to country, and according to age, income, gender and socio‐economic dimensions as well as between generations. A further area of investigation is the mitigation capacity of the four pension systems. On the one hand, adverse labour careers lead to lower life‐time earnings and lower private pension accruals. On the other hand, these effects are mitigated through the design of pillars and their interaction. Mitigation is important to income security and stability in retirement and to post‐retirement income distribution. However, mitigation mechanisms come at the cost of incentives. Moreover, in many countries, the generosity of public benefits is set to decrease – increasing the importance of private pensions. This will shift risk and uncertainty from employers and pension institutions to individuals. Thus, risks and uncertainties related to private pensions will become more important, raising questions about the division of responsibilities between public and private pensions, and about the potential of mitigating such risk through pillar interaction. These concerns are further reinforced by labour market changes. Although a pension system free of distortions is inconceivable, this article seeks to contribute to addressing how mitigation should be designed, and how mitigation and risk sharing should be balanced against incentives, challenges which are as much political as technical.     

Employment effects of a German workfare programme at the establishment level

We examined the impact of a German workfare programme for hard‐to‐place welfare recipients, the so‐called ‘€1‐jobs’, on staff in public and non‐profit establishments. We applied static and dynamic panel models using IAB Establishment Panel data from 2005 to 2013. To account for regional influences, we linked the establishment data to indicators at the district level. We identified a positive complementary effect on high‐skilled workers and a negative substitution effect on low‐skilled workers. We interpreted these findings as follows: In that €1‐jobs require highly skilled staff for management, instruction, qualification and support, this indicates that the programme generates jobs for skilled workers within the welfare‐to‐work industry. The negative effect that we found for low‐skilled workers suggests substitution effects between the programme participants and regular low‐skilled workers; although in this study, both effects were relatively small.     

Financial Incentives and Job‐search Training: Methods to Increase Labour Market Integration in Contemporary Welfare States?

In their efforts to increase labour market integration, contemporary welfare states emphasize the importance of financial incentives, active job‐searching and participation in labour market programmes. However, the effects of these policies have been minor and in some cases even inconsistent. The aim of this study was to examine whether and how financial incentives and job‐search training programmes increase re‐employment and the quality of re‐employment. A total of 1,015 unemployed persons participated in a Finnish follow‐up study with a randomized experimental design. Although no overall impact of job‐search training on re‐employment emerged, a positive effect was found for those groups of the unemployed who had a financial incentive to participate in the programme. Nevertheless, among unemployed workers with benefits at a minimum level there were no positive effects on the quality of re‐employment, and the impact decreased when unemployment was prolonged. Financial incentives and job‐search training appear to increase re‐employment among those of the unemployed who generally have better chances on the labour market, whereas these measures are not sufficient for the more disadvantaged groups of the unemployed.     

Which employers have refugee employees—And which do not? Employer typologies developed through hierarchical cluster analyses

Employers can be regarded as gatekeepers of jobs. They decide how to post vacancies, whom to recruit and whom to dismiss. In recent years, a growing body of research has highlighted the crucial role of employers in relation to labour market participation of disadvantaged groups. This article contributes to this research by exploring which types of employers have refugee employees—and which do not. We develop the typologies through hierarchical cluster analyses using a nationally representative survey of Danish workplaces. We find that the employers who have experiences with having refugee employees can be grouped into three based on their attitudes and preconceptions; knights, knaves and squires. Likewise, employers who have never had refugee employees can also be divided into three groups; aspiring knights, knights of fortune, and commoners. The groups differ in their attitudes and motivations for (not) having refugee employees. Our main contribution to the literature is the development of new nuanced employer typologies, and the finding that employers differ in their motivations for having, or not having, refugee employees.     

The quest for sustainable employment: Challenges faced by young people during the job‐search process

Young people who are unable to find and sustain employment are at risk for long‐term social and economic exclusion. Active labour market policies (ALMPs) addressing the problem of youth unemployment have focused on building the employability skills of young job seekers to expand their employment opportunities. Yet research exploring how young people navigate the job‐search process is limited. Drawing on interviews with young Australian job seekers and their employment consultants, this article addresses the questions of how young people navigate entry into employment through the job‐search process and what challenges they face. The study revealed three common frustrations experienced by the young people during their job‐search: employers' expectations of relevant work experience in the young person's preferred occupation, being required to apply for jobs not aligned with their career aspirations, and the impact of personal factors on their ability to confidently present themselves to prospective employers. The findings highlight the need for ALMPs and employers to facilitate positive employability support mechanisms that will build a stable platform from which young people can build a trajectory towards sustainable employment to reduce long‐term youth unemployment.     

Practices of activation in frontline interactions: Coercion,persuasion, and the role of trust in activation policies in Germany

Following Michael Lipsky's well‐known argument that policy is made in the daily encounters between street‐level bureaucracy and citizens, a growing body of research emphasizes that actors and organizations delivering social and labor‐market policy play a crucial role in welfare‐state politics. Using qualitative data collected at three local employment agencies in Germany, this article explores worker‐client relations as a crucial mechanism through which activation policies are translated into practice. The analysis investigates how caseworkers define their role and their relationships with clients. The findings show that it is essential for caseworkers to achieve client compliance. In such a context, building relationships of trust is a strategic instrument in overcoming possible barriers to co‐operation in the caseworker‐client interaction. Caseworkers develop strategies to create the impression of trustworthiness and to motivate both unemployed clients and employers to become trust‐givers in the caseworker‐client relation. While research has often stressed the dichotomy between disciplining and enabling elements of activation policies, our explorative study shows that persuasion and trust‐building are a further important dimension of the frontline delivery of activation policies. These strategies reflect the importance of emotional aspects of frontline work.     

The regulatory challenge of occupational safety and health in the online platform economy

The online platform economy raises a range of intricate legal questions connected to labour law and social security protection. In particular, the atypical forms of labour relationships used by many online platforms (e.g. multilateral, hyper‐temporary, off‐site, autonomous), often contractually defined as independent contracting, have challenged the application of labour and occupational health and safety law in many countries across the world, as the application of these norms tends to be dependent on the existence of an “employment relationship”. These developments are compounding the general increase in atypical employment, especially as a result of the 2007–08 financial and economic crisis. It has mostly fallen to courts to resolve the disputes between online platforms and their online platform workers, but some European Union (EU) Member States (such as France) have taken specific legal measures in response to these difficulties. Also, the EU‐level as such is becoming increasingly involved, with the Court of Justice’s ruling in the case of Uber providing some guidance on the “employment question”, and a pending legislative initiative on a Directive for Transparent and Predictable Working Conditions which may provide minimum labour protection for online platform workers in the EU. This article analyzes the problem of labour law in the online platform economy and surveys the various responses by courts and policy‐makers across the EU, which may furthermore set the tone for developments outside the EU in this area.     

(Not) Taking Account of Precarious Employment: Workfare Policies and Lone Mothers in Ontario and the UK

Workfare is, at least in part, a policy response to changing labour markets and the expansion taking place in jobs that are low‐paid, irregular and insecure. For lone mothers, increasingly the focus of workfare policies, precarious employment creates special challenges. However, the nature of the jobs that are available to women on social assistance has received relatively little attention in the workfare literature, which focuses more on individual characteristics, supports to employment, and programme impacts. Drawing upon both primary and secondary sources and using Ontario, the province with the most developed workfare programme in Canada, this article examines the ways in which policies support and enforce precarious employment. The article also considers the implications of precarious employment for UK policy, which has not (yet) adopted workfare for lone mothers, although incremental steps in that direction are taking place as employment is increasingly viewed as the appropriate objective of income support programmes for lone mothers.     

What Determines the Extent to which Employers will Comply with their Social Security Obligations? Evidence from Chinese Firm‐level Data

This article aims to extend understanding of employer responses to social protection regulations enacted by government to ensure the well‐being and security of employees. By utilizing firm‐specific data collected from Shanghai we explore the relationship between firm characteristics, employer behaviour, and the effectiveness of compliance mechanisms that have been adopted to contain contribution evasion by employers. We offer empirical evidence about the impact of the size of the firm, ownership structure, and incidence of risk on employer evasion behaviour in social protection payments. These results should enable enforcement agencies to improve compliance levels and also contribute to building theory as regards the significance of social policies to employers and the impact of social protection on human resource policy.