Working Papers on the Reconciliation of Work and Welfare in Europe The political economy of active labour market policy Giuliano Bonoli Reconciling Work and Welfare in Europe A Network of Excellence of the European Commission’s Sixth Framework Programme Giuliano Bonoli The political economy of active labour market policy. REC-WP 01/2010 Working Papers on the Reconciliation of Work and Welfare in Europe RECWOWE Publication, Dissemination and Dialogue Centre, Edinburgh © 2010 by the author(s) The Working Papers on the Reconciliation of Work and Welfare in Europe series seeks to promote the diffusion of research and research integration activities taking place within the network and being produced by other researchers working on issues of work and welfare in Europe. Working papers are published either within the framework of a series of closed calls, which follow the different stages in the life-cycle of the network’s activities, or as part of an open call, which aims to privilege both research focussed on cross-national comparative analysis of the various tensions between work and welfare and research focussed on the role of the European level in addressing these tensions. All papers are peer-reviewed. The Working Papers on the Reconciliation of Work and Welfare in Europe are published online by the Publication, Dissemination and Dialogue Centre (PUDIAC) of RECWOWE. They can be downloaded at http://www.socialpolicy.ed.ac.uk/recwowepudiac/working_papers/ RECWOWE / PUDIAC on the internet: http://www.socialpolicy.ed.ac.uk/recwowepudiac About the author !" & $ $ ' $ # # $ % $ # ( ) $ ! ) ! # )! )# $ Abstract $ ) $ * ' , + $ $ ! + $ #- $ ( $ # $ , ! ". # ". ! ". / ! ! ". , $ $ $ ! # - , #$ ) ( , ! $ # ". # ! ! # Keywords $ ) ! ". ! ! 6 Working Papers on the Reconciliation of Work and Welfare in Europe Introduction1 $ # *$ ) ) * ! $ ". ! 0 ! $ ) $ * ' $ $ 1 2 - # $ 3 $ $ $ # * ' ! $ #< # % , 4#>= ! $ # ". 8779! )# ". $ ) #* ! 33 2 ". $ ) 45?7 ! ! $ + #! 8776 # * ! ! $ ! ". ! $ ) ! ". ! ! ! 8774! ! 4557! ! ! 8778 # @ ) 8779 7#; ! $ 7#8 $ # + ". ! $ 4567 7#: ! + = # ! A ) B ! 877; # 2 ) $ $ * ' # #@ ) ! $ $ ". ! , # ". $ ( #! ) $ $ ". ! #* ! ". # ! ! 45?7 $ # ! ! 2 ,! ! Bonoli: The political economy of active labour market policy 7 The determinants of active labour market policy Political explanations - $ ! $ $ $ $ ) ". # + A 0 1 ". 1 0 # - $ $ ) ! , 4557/ 4>;+4>6C $ $ ! # $ 2 ) $ + 8774/ 46: #- $ ! 8776 #! 8776! $ $ ! $ " ". # 1 0 ' ! ( # 8776/ 4;+6 # ". ! $ B ". # @ $ $ " ,$ ! ! # ". A ! #B $ ! # ) ! ! * , ) ! , ! $ ) ! / ! / # # #% ! ! ) B ! 877; # - $ ) # B ! + ! ! ) + # @ , ". ! )! ! # ( # ! / ) 8 Working Papers on the Reconciliation of Work and Welfare in Europe ! "# $%%&' &() - B A ! ". - " $ $ D $ ! # 58 # ! ". $ 2 $ # - $ + ( $ ". ! $ ) D $ ) $ ! # $ ) ( ( & 3 ) + + $ 2 ! 456? # ) $ # ! 8778 # - ! ! $ ". + D ". # ) $ $ ! $ 33 + # < ) @ ! 45;7 ". E Institutional explanations . $ ". $ + , , $ # ) $ ) # ! , ! ! 2 ! A $ $ ! 0 ! 8776 # ) ! ! 8777 # ' $ 1 $ ". ! $ $ 0 $ 1 #! ! 8777 # @ 0 $ ! ". ! ". A $ $ $ $ $ ' ! 877? # . 1 ! Bonoli: The political economy of active labour market policy 9 $ - $ ! $ #< # 1 0 $ ) $ $ #' 45;7 $ $ $ ! 877;! @ 4557 $ $ ) ! 8777 # 8777 ) ! ! , $ D ' ) $ #- # F ". B $ ! 877;! $ $ ) ! # Diffusion of policy ideas *$ * ' $ ! $ ) $ #* ! 2 ". ! 877>! ! 4559 # ' , F # $ # $ $ ) $ , # ! 8778! $ ) )! @ % ' ) 4557 $ D ! 877; # - $ D 3! 8779 # ! %&# G %& %&! ! 4557 # * * ' $ $ ! 877;! $ $ %! ! 877: # $ ! 8774! H + ) " 3+ +& ! 877?! ! 877> # + 10 Working Papers on the Reconciliation of Work and Welfare in Europe Types of active labour market policy $ ) ! $ ( $ $ ) ) 45?7 ! $ , $ $ ! ! 8778 # $ ! ) , ! , $ $ ! 0 # $ 1 & $ 0 $ 1 ) $ ! + ) ! )! 8774 # ! 455?! $ $ ! $ ! ! ) ! 8774! ! 877:! ' ! 8777! ' ! 877? # $ $ ) $ $ $ $ # - 0 / ! $ 1 0 $ 1 $ #* $ ) ! 4555 $ ) ! ! $ ) ! $ 0 $ 1 % # + 0 $ 1 0 ! $ $ $ ! $ 1! , $ $ + $ 1 ! 877: # $ 1! 0 ! ) $ D +. ! ! 877:! ' ! 877: # $ $ + $ ' 0 ! , " ) - $ , ) $ ! ) ! # $ $ ( # $ #- / $ ! $ ! ( ' , # ! ! ) ! ! 877? / ?> # ! $ ". ! / $ ". # ! ) + + ! ) , ! ! Bonoli: The political economy of active labour market policy $ #- ) ( 11 $ + 4# Type Objective Tools Incentive reinforcement Strengthen positive and negative work incentives for people on benefit - Tax credits, in work benefits - time limits on recipiency - benefit reductions - benefit conditionality - sanctions Employment assistance Remove obstacle to employment and facilitate (re-)entry into the labour market - placement services - job subsidies - counselling - job search programmes Occupation Keep jobless people occupied; limit human capital depletion during unemployment. - job creation schemes in the public sector - non employment-related training programmes Human capital investment Improve the chances of finding employment by upskilling jobless people - basic education - vocational training @ $ - ". ! $ , ) $ ! ) $ ! #$ ( $ $ ! # )+ ) # #@ ! $ $ , ) - ! 1! ) $ # ) # ' $ $ ( #< ! - $ ( ) ! $ # @ , ! ( ( ) $ ! # 0 $ ) $ ! $ ! ! 12 Working Papers on the Reconciliation of Work and Welfare in Europe ". # ) $ D $ ( ' # ) 0 $ ) ! + 1# ! ) ( $ # - ". + , ! ( ) ! ! ( #' 4567 4557 $ ". # @ ! ". $ ! $ ( ! #) #- $ $ D $ $ ( # , + ! % - $ ! $ $ $ 3 $ ! $ ! $ ) ! ! 2 $ # $ ! ! + $ $ ! # $ # *' ". , + $ 456? / $ !( ( # # , , ) ! 877?! * ' ! 877; # ! , $ #- ! + ! $ ! # $ 8/ * ' 0 !( ! 0 0 $ ( 1# $ + 1! ! ! $ 1C $ ! $ $ ". # 87+ Bonoli: The political economy of active labour market policy 13 Sweden Denmark 2 2 1.5 1.5 1 1 0.5 0.5 0 1985 1990 1995 2000 Employment assistance Direct job creation 0 1985 2005 1990 1995 France 2 2 1.5 1.5 1 1 0.5 0.5 1990 1995 2000 Employment assistance Direct job creation 0 1985 2005 1990 1995 2 2 1.5 1 1 0.5 0.5 1995 Employment assistance 2000 Direct job creation 0 1990 2005 1995 Training ,* ' +,-. 4 ! $ 455? ) $ $ $ @ , ( 87+ ) , ! , " $ 877?! ! %&! # ! #! ! $ ) ! $ 3 @ 2005 ! 456?+877? '* #@ 2000 Employment assistance Direct job creation Training ". ". $ 2005 Italy 1.5 1990 2000 Employment assistance Direct job creation Training Training United Kingdom 0 1985 2005 Employment assistance Direct job creation Training Training Germany 0 1985 2000 ( ! +4557 ! 14 Working Papers on the Reconciliation of Work and Welfare in Europe $ # - ! $ ! $ $ $ D ! , # ! , ) ) $ ! ! + ! 8777 # ! %& # * ' * ' ! $ 4! $ #- $ ! , 2 $ $ $ ! ! # Active labour market polices across time - $ ". $ $ $ ! + , #45?7 ! * ' ) 456? $ ) ) $ ! $ # @ ! 45?7 $ ! ) ". 45>7 ! $ # ) ( $ # #@ ". + $ , ! ) +4557 ! ) $ 45;9+ ! ,! ) ) + # # < $ , , ,# $ / %&# ! )! !@ ! + $ ". ! 0 $ 1 $ #- 0 $ ! 8 # $ ) # $ # * ' ) ) , $ , $ ;?# ". $ # ". ! 1 $ $ # @ $ ) ) $ Bonoli: The political economy of active labour market policy 15 The postwar years: ALMP in the context of labour shortage . , . ". 45?4 # . B B B ! ! $ ( + $ / 2 ! # 2 ! # - # ! $ $ $ # $ ) ! $ ## ! $ ) #" ) ) $ $ # $ $ ". # B ) $ $ 455?/ 4:4 #C . . ) ! $ ! # # D) , ! 8778/ 8;?C 877> # $ ! ) 2 ". ( ! / ". # # ! # , ! 8777/ :74C G $ ! 2 ) $ ! ! 8778/ 8;? # * ! , / , / " # 0 !) 1 + / . 2 ! "$%%$ ' 33) - B +. 2 # $ ! # $ ! #- ) ) ! ! $ 16 Working Papers on the Reconciliation of Work and Welfare in Europe ! # 45?7 0 # , ) ) 45>7 1! D # # $ ! + ! ) $ $ ! $ 45??# #- 2 ( ! +( # ) ! , ! ) 4556/ 476 # . $ @ $ # 45>9! ) $ + # ! $ %D '# ! @ ! ! ( $ $ ! 455;! # - ( 0 $ 1 $ ! 8778 # - $ / $ ) , A #- A! $ ( $ ' * ! ! 45>5 /# - 4 $ # - ' %+ 45>>+45>5 ! #$ ) $ $ ! 877? 4;>+5# 0 $ ! 1 A ' ! ) ) 45>>+>; @ ! ' % ! # $ 8777 # / 2 5 6 1 5 !" 3789' 3() Bonoli: The political economy of active labour market policy 17 - 45>>! # ( @ ! ! $ ) : ) " $ ! ) #; ! ! ! $ @ ! 455> # @ ( ! + ! $ ! $ - ! 877: / 8:4 # ' ! $ ) #* ! $ ! $ #- $ , ! $ # - $ $ # ( , $ $ $ #- ) / ! @ ! $ ' # - $ ! , # Facing the employment crisis: ALMPs in the context of mass unemployment ) ) $ , ) 45;9+;? 2 # ! / #- ) ! , ) $ # ". ! ) ! ! + $ ( $ $ ! ! ) ) ! ) #- ". $ $ ! # 45;7 $ 4567 +45;7 - # , $ ". # ! ! ! $ # ) 2 $ ) - ) ( + $ ". ! .( ! ". ! 456; / :97 # 18 Working Papers on the Reconciliation of Work and Welfare in Europe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onoli: The political economy of active labour market policy ! ) # $ ! . B ( $ 4#6 = A $ ( 8777/ 859C ' 877?/ >4+8 # $ # ! $ ! $ 4557 # * ) ! # 4554# $ ) ! ". 19 $ $ 4558 , $ @ $ ! $ 877? # 1! # # + #- $ ! $ 0 @ ! 877: # + @ = I < 1 ! ( $ 5 # - ( ( ! #! 8779! $ ! ) # -%' 2 $ $ ". ' ) ! $ +4567 @ 0 # ". ) $ 456: ) ( 456> # " + $ # 4565! ' B. ! # + <# 0 4566 $ # ! $ ! 8778 / 978+9 # - , ! $ ) $ ) ! ' ! , $ $ ) @ ! 1# ( 4557 455;+8778 # 9?! $ ! ( ! 877? /888# $ 0 + ) ( + 4567 ". # 4 $ ) ) 4557 # - ,! $ $ $ # $ 4557 ! ) ! $ ! # - $ 4567 + 20 Working Papers on the Reconciliation of Work and Welfare in Europe $ ". ! ) * ' $ $ ) ( $ ) . ". 8774 # $ ! 4557 9# 4567 ALMPs since the mid 1990s: the “activation turn” - +4557 , * ' , #@ ". +4557 ! ! $ # ) * ' ) ! ) ) #- ) $ #- ". ! ) $ #0 $ $ 1# * ' #- ! ". + , $ $ $ # $ ( # ! $ ! $ )! $ 4 #- ". $ 4559 #- 455: $ + ) # #- $ + $ $ / # < ) $ $ 2 &$ $ 8776/ 8:9C . $ 8777 # $ ! ) $ ! ) # ) H ! $ # - ! ) # ! $ $ ! &$ 8776/ 8:? # 2 ) #- 455> $ $ 4556 # - 0 $ 1 Bonoli: The political economy of active labour market policy 21 , 8?# ! ) - # 4556 $ @ # ) ) $ $ #. ,+ 8? 46 # ! 2 0" ! $ , ! 8776/ 8:4+9 # " ) $ ,( ! ?7= $ 1! &$ $ + ! #- ) ! ! 8779 # * $ # % $ ' $ $ $ ) . ) $ $ ! %& ! ! 4565! & ! 455? # ) 455>! ) - < #' ! $ +4557 # $ 4556 ' 2 ! 877? $ # ! ! 877?! ' $ , ! 877? # %&A ". 4557 $ 2 # < ) 477 ) # 8774/ 844 # + - #- #@ ) # + ! ! 1 ) #- +4557 2 47= ' $ $ $ ( 8774 0 ! ) ( $ ". ! # $ $ ! 8778! - $ ! 877: # $ $ ! $ ' + J ! 877? # * 2 $ 22 Working Papers on the Reconciliation of Work and Welfare in Europe 8774# $ $ ,/ ( ! - ' ! # J $ ) G ) 3! 0 # ) ) # # $ $ ! ! 1! $ ! $ $ $ ! - ! ! ! G 8776 # ( $ ! $ 2 $ ! 877?/ ;8 # @ $ ! 3 ! ) $ $ 8776! $ ! ". $ #! 8776 ! * ' ! 877> # - #' , + $ + $ ". + $ $ ! $ ( ! 877? # $ $ # )" $ $ $ 8777 ! $ ! < ! 3 ! 8776 ! @ ! 4 J $ B. B # 8775# Discussion and conclusion $ , ! $ $ $ ) ( ! ! $ $ ! $ # , $ 87 ! ! 877? # $ ! ) # - ". ) $ $ ( $ # ) ! Bonoli: The political economy of active labour market policy ! $ 23 $ ( $ ". $ # , ". # * ' ! ! 4567 ' 9 ) 45>5 4557 # ! ! #% $ ! + ' ". / $ $ #' # $ ! $ $ ". ! #4557 #- $ $ $ ) )! %&! $ # 4557 8777 $ ) $ # $ ". ( #". $ $ ! ) 4567 # @ $ ! 45;7 # 2 ! $ ! $ ) , , , $ ( ! ". $ # - %&! $ # ) ! , $ ". #! $ ". ! $ ! - ! $ $ +4557 I 8776 $ $ # $ $ # $ ! $ ) ) ! ( ! ! $ + # 24 Working Papers on the Reconciliation of Work and Welfare in Europe @ ! $ ". #< ! $ ! ". ! ! ! # 4 - , ( D # 477748+44?59;K4 ! 3 @ )B )1 # ) ' # ). $ 1! % $ 0 0- *, ! 89+8: 8775 # 8 D , ! ) ) $ $ , # ' # 9. $ $ # #* ' 877> # Bonoli: The political economy of active labour market policy 25 References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orking Papers on the Reconciliation of Work and Welfare in Europe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onoli: The political economy of active labour market policy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orking Papers on the Reconciliation of Work and Welfare in Europe +& - ! .#! G - ' ! # $ 8778 ! # ? E + E - ) *, ! # 877: D ) ? G *, ! *, ! J# 4555 < ) , ! J# L # E ) '2 !' ' ' 2 ! *, # % $ # # D# % $ ! G# 877: D B ) + + ! # # E > ! .# 8776 * D # 8778 @ ! &# 877: H > @ H " )! # L B . + ! # * % $ : # D *, ! *, E D % $ # /B # 5 ?+86# ! # 877? 2 + # -0 ! Recent titles in this series download at http://www.socialpolicy.ed.ac.uk/recwowepudiac/working_papers/ Working Papers 2009 14/09 C. Rodriguez d’Acri, Alison Johnston, Andreas Kornelakis The Role of Social Partners in Bargaining over Nonwage Issues across Austria, Greece and Italy 13/09 Denis Bouget Trends of Social Welfare Systems: From Convergence to Attractiveness 12/09 Markus Tepe Public administration employment in 17 OECD nations from 1995 to 2005 11/09 Trudie Knijn, Arnoud Smit The Relationship between Family and Work 10/09 Fabio Bertozzi, Giuliano Bonoli Measuring Flexicurity at the Macro Level 09/09 Silja Häusermann, Hanna Schwander Identifying outsiders across countries 08/09 María C. González Workers’ Involvement at the workplace and Job Quality in Europe 07/09 Rodolfo Gutiérrez, Ana Guillén, Ramón Peña-Casas Earnings inequality and in-work-poverty 06/09 Ramón Peña-Casas More and Better Jobs 05/09 Svenn-Åge Dahl, Torstein Nesheim, Karen M. 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