Employment centre, France. Photo: M. Crozet/BIT

Labour markets are, therefore, having to deal with changes which are not only limited to the risks associated with the unpredictable economic and financial environment but which are also, more importantly, of a structural nature. In the light of these changes, activation programmes are needed more than ever if the requalification of the workforce is to succeed. And yet, when taking into account the budgetary impact of the crisis on social security (particularly in terms of pressure on expenditure), the rising number of job seekers calls into question the sustainability of increasingly costly programmes which become less effective as the guarantee of securing employment fades.

 
The role of activation programmes

Activation measures have two main characteristics:

• they target individuals who are of working age, unemployed and able to work, and who receive income-replacement benefits;
• they make the payment of benefits conditional upon meeting certain obligations as regards availability for work and seeking work.

The impact of these strategies on unemployment is due, on the one hand, to the fact that they ensure that unemployed workers participate in services linked to employment and, on the other hand, to the possibility of countering the disincentivising effect that benefits may have by imposing obligations to participate in activation programmes, by ensuring that entry conditions are respected and by threatening the imposition of temporary sanctions (OECD, 2010).

 
The Scandinavian activation model tested by the crisis

Sweden, Finland and Denmark implemented activation policies at the beginning of the 1990s. They were initially piloted on the more vulnerable sectors of the population, such as young people, immigrants and the long-term unemployed, and gradually extended to all unemployed workers (Bonoli, 2010).

The Scandinavian model has managed to combine economic growth with social protection and so make “flexicurity” an expression synonymous with successfully combining adaptability to a changing international environment with a social protection system capable of protecting individuals from the more direct consequences of this structural change. However, the pressures on governments today to reduce social budgets and the general impact of this new context on activation programmes should not be underestimated:

• the sustainability of these policies has been called into question: the cost-effectiveness of these policies is seriously jeopardised when increased expenditure, linked to the growing numbers of beneficiaries, accompanies a shrinking labour market;
• these policies also lose their effectiveness during periods of recession, because as the number of unemployed workers increases, public employment services find themselves faced with having to reduce the frequency of their interventions with job seekers;
• from the beneficiaries’ perspective, the qualifying conditions for unemployment benefits are becoming more prescriptive (shorter indemnity periods) while at the same time the number of obligations imposed on them are increasing (for example, more employers to meet each week, more training courses to attend and increased pressure to move to a new area or into a new profession).

The crisis, however, has also highlighted a much deeper problem: the strong dynamism these measures imply – which enables workers to change jobs more frequently and which, more importantly, enables employers to lay off workers without having to make redundancy payments or create a social plan – has led to the constant scruting of worker productivity. Under these conditions, some “groups” of workers are increasingly excluded from the labour market (Daguerre, 2006; Sereni, 2009).

In fact, with the emergence of an ageing society, where one third of the population is over 60 years of age, senior citizens will become increasingly marginalized if activation programmes fail to target the particular needs created by this new demographic context. More generally, these programmes should form part of a new “management of ages”, in other words, a new way of addressing an ageing population still able to work.

Furthermore, the growing prevalence of a highly productive economy in an increasingly globalized and competitive world has added to the vulnerability of young people entering the labour market for the first time and increased pressure on this new economically active population to enhance their general skills and knowledge. Activation measures should therefore be accompanied by improved access to higher education, continued professional development and “social investment policies”: targeting child poverty and guaranteeing children living in poverty better conditions for learning could help to reduce exclusion and create a better-trained, qualified and flexible workforce, which is able to meet the needs of a highly productive economy.

So as not to lose sight of the original idea which underpinned activation programmes (the retraining of the workforce without breaks in employment or unemployment), these measures should be included in proactive and preventative social security policies. They should be adapted to meet the current socio-economic context and, in so doing, increasingly target those sectors of the population which are at risk, such as older workers, the mentally handicapped and young people entering the labour market for the first time.

Experience has shown that we must at all costs avoid allowing those who lose their jobs to enter the vicious circle of dependence and fall into the trap of unemployment, whether through the payment of disability benefits or pre-retirement pensions. Professional re-integration programmes are thus even more important, particularly for the most vulnerable. A more preventive approach emphasizing activation should facilitate both increased integration into the labour market and greater employability, mainly through investments in education, training and orientation.

References

Bonoli, G. 2010. The political economy of active labour market policy  (RECWOWE Working paper on Reconciliation of Work and Welfare in Europe). Edinburgh, Reconciling Work and Welfare in Europe. < http://www.socialpolicy.ed.ac.uk/__data/assets/pdf_file/0010/39268/REC-WP_0110_Bonoli.pdf> (consulted on 18.05.2010).

Daguerre, A. 2006. «Les politiques de retour à l’emploi aux Etats-Unis, en Grande-Bretagne et en France». Critique internationale  2006/4-6, No 31, p. 69-94. < http://www.monde-diplomatique.fr/2005/06/DAGUERRE/12554> (consulted on 13.05.2010).

OECD. 2009. Tackling the jobs crisis: the labour market and social policy response: Theme 2: Maintaining the activation stance during the crisis  (Background document – OECD Labour and Employment Ministerial Meeting). Paris, Organisation for Economic Co-operation and Development. < http://www.oecd.org/dataoecd/54/48/43766121.pdf> (consulted on 18.05.2010).

Séréni, J.-P. 2009. La social-démocratie à l’épreuve: Les parts d’ombre du paradis danois.  < http://www.monde-diplomatique.fr/2009/10/SERENI/18225> (consulted on 13.05.2010).