Download fulltext
281-Case-Study_EUBS_IMH_Switzerland_16122015_Luigjes_Vandenbroucke

1 Institutional moral hazard in the multi-tiered regulation of unemployment Switzerland – Background paper Chris Luigjes & Frank Vandenbroucke December 2015 This document reflects views only authors and European Commission cannot be held responsible for any use that may made information contained therein Please refer to this as follows: C F (2015) support ‘Institutional Moral Hazard Multi-tiered Regulation Unemployment Social Assistance Benefits Activation – A summary eight country case studies’ Abstract has been written preparation a research project funded by (on Feasibility Added Value Benefit Scheme contract VC/2015/0006) adds detailed analysis following deliverable project: studies; but it was not We concept ‘institutional hazard’ analyse intergovernmental relations within welfare states specifically domain unemployment-related benefits related activation policies (the ‘regulation unemployment’) is one separate studies focuses on Swiss insurance regulated federal government thereof implemented cantonal offices Minimum requirements monitoring system were introduced ensure these focused caseloads Furthermore attempted harmonise social assistance top-down efforts dropped favour non-binding inter-cantonal guidelines In short reforms borne out concerns often rejected or altered cantons defended their autonomy Keywords: hazard; states; relations; insurance; assistance; Active Labour Market Policies; activation; policy; 2 Switzerland1 thank Guiliano Bonoli Cyrielle Champion very useful exchanges extensive comments our drafts List Abbreviations AC Fonds de compensation l’assurance-chômage (unemployment fund) ALMP Policy AVIG/LACI Arbeitsversicherungsgesetz/Loi sur l’assurance Chomage (Federal Act Obligatory Insurance Insolvency Compensation) MAMAC Medizinisch‐Arbeitsmarktliche Assesments mit Case Management (inter-agency collaboration pilot project) PES Public Employment Services RAV/ORP Regionalen Arbeitsvermittlungszentren/offices régionaux placement (Regional employment offices) SA SI Supplément d’intégration (integration supplement SA) SODK/CDAS Konferenz der kantonalen Sozialdirektorinnen und Sozialdirektoren/ Conférence des directrices et directeurs cantonaux affaires sociales (inter-cantonal association ministries) SKOS/CSIAS Schweizerische für Sozialhilfe/Conférence suisse institutions d’action sociale (Swiss Conference Assistance) SMI minimal UA UI Introduction interesting subject at hand due combination factors First all characterised significant political decentralisation involves three levels government: level municipalities Secondly are amongst highest OECD terms net replacement rates other words if combined with long duration high accessibility probable labour market governance will confronted substantial measure both individual institutional issues Finally somewhat resembles German opted sustain face same dilemmas Germany opt more control protection governed unique (Bertozzi Ross 2008 p 122) its brand federalism encompasses major executive role 26 regions ‘cantons’ relatively generous also heavily private (for-profit non-profit) agencies Some argue two features inhibits formulation coherent strategy “some categories non-working individuals […] catered regimes obeying different masters” Thirdly akin Anglo-Saxon archetype than continental characterises most neighbouring countries The type shares characteristics US counterparts (Obinger Armingeon Bertozzi 2005 263) interplay between state Obinger al note forces have decisive shaping policy: 1) unifying centralizing which formed challenges 19th 20th century; 2) cooperation 3 municipal administrations context weak central state; 3) force diversity decentralization “stemming from competencies resources polities politics policies” These influential It could said four key principle sanctioned legislate policy area no explicit constitutional competence Every takeover new requires direct democratic parliamentary approval Second differentiates substantially region tax public services contrary Austrian Third prerogative levy taxes periodic parliament voters always granted temporary basis creates bias towards ‘lean’ reflecting what called ‘the federalism’ reliant administration systems implementing programmes pp 266-267) Not included list probably distinguishing influence institutionalization democracy through referenda Direct essentially functions “strengthen power veto available constituent units” 270) preserves promotes regional combines some benefit schemes strong an (both for-profit regulates old-age pensions sickness invalidity insurances maternity leave child completely organised insurers play large federally especially when comes (Duell Tergeist Bazant Cimper 2010 81) “However although main legislative regulatory authority over finances respective make considerable they given set up varying implementation mechanisms Thus there nationally-unified since free choice means reach goals national level” 38) design financing left So fragmented actors responsibilities multiple Then unlike Dismissal limited exposing business cycle Immigrant workers time functioned reserve perceived success WWII until 1990s crisis broke point led many (attempted) revisions rising resulted renewed focus changed nature various security tried prevent dumping According areas relied contributed fragmentation (i e 4 started promote multi-level coordination early 2000s (Champion Pisoni 2014 15) reduce practice initiatives experimentation several types 5 experienced genesis scheme everything do special administrated financed 38 funds (Caisses chômage) obligatory 1982 Each canton own fund 12 privately partners overseen Ministry economy organisation can vary slightly “the rather precise rules granting fixed law corresponding ordinance” 53) constellation reflection historical developments first had already created century (tripartite result legislation (private) local action therefore dispersed heterogeneous delayed current factors: initial absence jurisdiction feedback arrangements lack will” 276) Only after WWI general strike did pressure intervention increase By then beginning along lines Ghent anchored provide subsidies standards 1924 seen gradual step direction involvement less homogenous today would prove inadequate Great Depression sparked round debate See Articles 77-78 AVIG Article 114 Constitution 1947 decades intense confederation adopted amendment empowered enact Federal followed 1951 institutionalised existing obligated them adhere However voluntary never gained great importance 283) oil shocks 1970s kick-started wave (provisional) yet create Compensation (AVIG/LACI) name suggests “enacted statute procedural substantive law” 135) additional regulations dominant Since undergone economic recession notably 1995 2003 2011 characterise inherent status quo They blocked development shielded austerity And so retrenchment during either watered down coupled 288-289) reform possible compromise; generosity toned little return 6 measures (ALMPs) extension maximum impact federalist structure Popular protest opposition against slashing hold latter incentive agree spill 291) Further 3rd 4th revision discussed detail later below All employees nowadays covered designed Despite existence Denmark we classify federalised administratively decentralised devolved primarily contributions fiscal burden equally divided employers amount 90% total while rest 52-53) (see Table revenues collected (Fonds AC) ALMPs job centres) managed ministry fully under 1a risks 2-5 22 7 27 Duell 88 200 daily allowances reflect regime people who exempt receive 90 Financial (AC) Source http://www espace-emploi ch/ueberuns/arbeitslosenversicherung/ 2013 Millions CHF % Contributions insured 6633 91 6% 6457 5% participation Confederation 454 3% 449 4% 151 1% 149 five six

Download fulltext
280Case-Study_EUBS_IMH_Germany_24032017_Luigjes_Vandenbroucke

1 Institutional moral hazard in the multi-tiered regulation of unemployment Germany – Background paper Chris Luigjes & Frank Vandenbroucke December 2015 This document reflects views only authors and European Commission cannot be held responsible for any use that may made information contained therein Please refer to this as follows: C F (2015) support ‘Institutional Moral Hazard Multi-tiered Regulation Unemployment Social Assistance Benefits Activation – A summary eight country case studies’ Abstract has been written preparation a research project funded by (on Feasibility Added Value Benefit Scheme contract VC/2015/0006) adds detailed analysis following deliverable project: studies; but it was not We concept ‘institutional hazard’ analyse intergovernmental relations within welfare states specifically domain unemployment-related benefits related activation policies (the ‘regulation unemployment’) is one separate studies focuses on Responsibilities German are divided between federal government Public Employment Services (PES) local level with supervisory role regional The system relatively centralised result reforms aimed at mitigating institutional increasing divergence insurance social assistance caseloads Specifically these created new scheme more tightly regulated placed responsibilities one-stop-shops operated jointly PES municipalities Keywords: hazard; states; relations; insurance; assistance; Active Labour Market Policies; activation; policy; 2 Germany1 thank Regina Konle-Seidl Werner Eichhorst very useful exchanges extensive comments our drafts List Abbreviations ALG I Arbeitslosenversicherung often referred Arbeitslosengeld (unemployment insurance) II Grundsicherung für Arbeitsuchende (social assistance) ARGEn Arbeitsgemeinschaften (pre-reform joint one-stop shops; despite current Gemeinsame Einrichtungen still ARGEn) BA Bundesagentur Arbeit (federal PES) BMAS Bundesministerium und Soziales (German Federal Ministry Affairs) SA SGB Zweites Sozialgezetsbuch (legislation governing II) III Drittes I) UI Insurance Introduction federation which However always involves several important actors: semi-independent (Bundesagentur or BA) regions Heterogeneity practices instances were among contributing factors leading up Hartz IV experience followed make an interesting Before 2002-2005 had multiple employment-related benefit schemes administered different levels More importantly those rested hands set-up akin Switzerland Austria In face similar challenges (a dichotomy heterogeneity performance) opted (SA) combined (into became centrally financed changes (UI) modest remained fully governance beneficiaries underwent introduced shops central authorities side-by-side It consortia subject subsequent issues arose constitutional also practical nature unique feature model parallel have out Starting policy experiment so-called Optionskommunen since become embedded legislation thereby creating three types 3 perform services: offices Notwithstanding could argued most all cases As explained synthesis report we distinction ‘principal agent problems’ expression situations two political constituencies involved; if actors involved lower do principal-agent problems Our ‘principal-agent relation’ can questioned institution such (BA): ‘agent’ self-governing partners ‘principal’ ‘principal-agent’ terminology used recognize validity criticism2; corroborated typology developed Mabbett Bolderson who argue multi-level prevails relationships governments administering institutions security rather than simple (Mabbett 1998) Nevertheless context want maintain involving non-political (including latter some extent ‘principals’) follow-up will return question indebted point 4 (Arbeitslosenversicherung federally legislated implemented Its replacement rates vary 60% 67% previous net wage depending whether beneficiary children maximum duration years Jobless workers able available actively seeking employment insured minimum twelve months two-year period eligible 5 strictness eligibility criteria average compared other OECD countries (see Figure 1) There reasons this; hand there comparatively strict availability requirements suitable work job search monitoring On relaxed sanctioning regime 2) See paragraphs 89 129 149-154 118-121 147-148 155-160 Overall Source: Langenbucher p 27 Strictness codified (SGB III) employer employee contributions 6 administration disbursement operates 178 over 773 branches overseen 10 directorates Much like its Austrian counterpart at-arm’s-length agency ministry 7 responsibility operations lies management board (Vorstand) monitored tripartite (Verwaltungsrat) Management committees supervise 341-349 regulations amounts how they collected when paid Paragraphs 363-365 determine funding comes from level; deficit covered (Ebbinghaus 2007 pp 35-36) sections chapter 11 0 Average 8 cases6 inform misconduct left untouched sole legislative authority because no meaningful autonomy determining parameters regard sensu stricto neither decentralised nor delegated analytical grid paragraph 374 becomes clear Table structural differences across Länder Unfortunately data per municipality region readily quite large making probable indeed size Since both entails redistribution EU Force Survey NUTS own calculations 1999 2000 2001 2002 2003 2004 2005 2006 9 98 13 12 Standard deviation 92 05 32 26 94 43 Coefficient variation 45 50 56 49 44 42 36 2008 2009 2010 2011 2012 2013 2014 08 07 16 91 09 03 65 33 21 39 35 34 four five six

Download fulltext
279

1 Institutional moral hazard in the multi-tiered regulation of unemployment Denmark – Background paper Chris Luigjes & Frank Vandenbroucke December 2015 This document reflects views only authors and European Commission cannot be held responsible for any use that may made information contained therein Please refer to this as follows: C F (2015) support ‘Institutional Moral Hazard Multi-tiered Regulation Unemployment Social Assistance Benefits Activation – A summary eight country case studies’ Abstract has been written preparation a research project funded by (on Feasibility Added Value Benefit Scheme contract VC/2015/0006) adds detailed analysis following deliverable project: studies; but it was not We concept ‘institutional hazard’ analyse intergovernmental relations within welfare states specifically domain unemployment-related benefits related activation policies (the ‘regulation unemployment’) is one separate studies focuses on There are two principal actors Danish unemployment: central government municipalities insurance funds regional governments have less important role Concern institutional led several reforms municipal system resulting increasingly monitoring complicated financing method The trade-off between complexity controls need local flexibility source ongoing reform efforts Keywords: hazard; states; relations; insurance; social assistance; Active Labour Market Policies; activation; policy; 2 Denmark1 thank Bodil Damgaard Thomas Bredgaard Michael Rosholm very useful exchanges These councils tripartite institutions which public authorities partners meet discuss both implementation thereof were introduced other levels well cf infra 3 employment regions distinct from labour market councils; they act transmission level Cf their precise List Abbreviations PES Public Employment Services SA UI Insurance Introduction can characterised fully municipalised decentralisation Due combination large fact still bears substantial part budgetary impact assistance (SA) (UI) extensive experience with performance management Furthermore undergone many changes unemployment; since most these reactions what seen relevant subject at hand Contrary cases examined study federation However multi-layered four play key role: All had some point or another major design implementing Historically benefit regime centralised responsibility included includes extent trade unions administered (co-)financed (Arbejdsløshedskassen) disbursed delivered services insured unemployed It regulated scheme monitored while charge administration Reforms 1994 reshuffled responsibilities altered size even new player: Currently (co-)finances schemes finances regions3 sets out broad targets set up reimbursement model through influences behaviour become all administer link although formal shrinking also lost reshuffling Landmark include 2007 resizing introduction jobcentres They 2009 complete municipalisation became beneficiaries implemented co-financed contingent being line developments accompanied every representatives could monitor share undergoing again aimed changing 4 replacement rates historically among highest Europe currently remain same 90% say there (generosity of) remains politically controversial duration From until 2003 succession shortened eligibility period seven years;5 2011 further reduced maximum years three-year One year enough requalify entire under fire because short(ened) combined means-tested results individuals who ‘fall out’ system: people exhaust claim suffer great loss income when do qualify In 2014 special commission Dagpenge Kommissionen) created address issues recently published findings now considered 6 Shortening consequences sense earlier strategy (see section UI) Capped DKK 815 per day 5 Not change first mandatory; ended ‘passive period’ altogether (Andersen Svarer p 12) An interesting proposal greater incentives take work Working short spells will either extend create record Related proposes couple ‘break’ days during would excluded payments (Dagpengekommissionen 2015) scores higher criteria average study; strictness relates mostly availability requirements sanctions repeat offenders Figure Error! Reference found ) strict likely high strong focus crucial its flexicurity Overall Source: Langenbucher 27 involvement Trade manage disburse Workers must apply fund choice initiate coverage Thus contrast (with exception Switzerland) directly controlled (agency) Yet formally approved 7 form Ministers Pensions oversees conduct 8 legislation Act governing 9 sensu stricto contrary Swiss (and affiliated unions) an (implementation) Their throughout successive concern described sections For suffices least See chapter chapters 14-15 Other acts Organisation Support Efforts deals different governance Measures predominantly Strictness financed three sources: contributions (paid members funds) used finance costs 10 After weeks municipality starts contribute 50% 100% cost individual care Table 1) 11 initial four-week government’s 12 (76-78) reforming adjustment contribution more discussion 0 Average cases7 Municipal after Chapter (82 a) Default 70% clients participating (Chapters Measures) job/activation offer (Chapter 16 started time five six

Download fulltext
278

1 Institutional moral hazard in the multi-tiered regulation of unemployment Canada – Background paper Chris Luigjes Donna Wood & Frank Vandenbroucke December 2015 This document reflects views only authors and European Commission cannot be held responsible for any use that may made information contained therein Please refer to this as follows: C D F (2015) support ‘Institutional Moral Hazard Multi-tiered Regulation Unemployment Social Assistance Benefits Activation – A summary eight country case studies’ Abstract has been written preparation a research project funded by (on Feasibility Added Value Benefit Scheme contract VC/2015/0006) adds detailed analysis following deliverable project: studies; but it was not We concept ‘institutional hazard’ analyse intergovernmental relations within welfare states specifically domain unemployment-related benefits related activation policies (the ‘regulation unemployment’) is one separate studies focuses on Responsibilities Canadian are divided between federal government provinces The insurance social assistance all caseloads Provincial responsibilities loosely regulated bilateral agreements with Even though system generates institutional does seem major concern characterised high level provincial autonomy Keywords: hazard; states; relations; insurance; assistance; Active Labour Market Policies; activation; policy; 2 List Abbreviations AFDC Aid Families Dependent Children ALMP Policy CAP Plan CEIC Employment Insurance CJG Job Grant CHST Health Transfer CHT CRF Consolidated Revenue Fund CST EAS Services EBSM Support Measures EI EIA Act EIOA Operating Account EIR Regulations FPFA Federal-Provincial Fiscal Arrangements JFA Agreements LMA Agreement LMDA Development MAR Monitoring Assessment Report MISWAA Task Force Modernizing Income Security Working Age Adults P/T Provincial/territorial PES Public TANF Temporary needy UI WITC Tax Credit Introduction federation relevant subject at hand Its ten three territories (from here referred provinces) play significant role its It classified politically decentralised (Mosley 2011 p 9) have shifted levels throughout modern history Starting from 1867 constitution dominant player changed after First World War again before during Second when initiated (UI) scheme included employment services However retained responsibility (SA) training albeit different forms through time Changes 1990s marked start political decentralisation effort where transferred (but benefits) granting them considerable flexibility leeway designing implementing become funding management pan-Canadian aspects while still retaining some direct delivery (for Aboriginal youth disabled programs) current brand federalism policy area reminiscent US type providing (block grant or agreement-based) provincially designed implemented programmes mechanisms labour market broadly similar: tying conditions dollars Before several 3 other areas already operated implementation Federal spending power always an important avenue influence even which originally over creeping (especially closely linked domains education workforce development activation) drivers changes division shifts since towards more scales down both transfers 1996 reinforced structure sections will competences concerning benefit schemes SA beneficiaries culminate institutionalisation (institutional) followed analytical grid conclusion 4 undergone balance rather modes (Banting 2005) fundamental sensu stricto 1940s enacted In order understand note how special circumstances were allowed take constitutional action do so Constitutional change preceded years federal-provincial disputes about rising relief costs Great Depression Only backdrop advent involvement reign new prime minister climate ready completely (Struthers 1983) did then went reforms most importantly transformation into (EI) response turn result 1971 expanded coverage dramatically final now rests tripartite (CEIC) (EIA) (EIR) act governs two components EI: passive income transfer well so-called (EBSMs) consisting section covers part contribution-based pays relative insurable working period previous earnings capped yearly maximum rate approximately 55% disbursed weekly nature commission stems 1941 decided programme insulated electoral whims pressures placed under autonomous 1977 chair taken deputy partner diminished; “the effect expropriated program” (Pal 1988) Also applicable less are: (Fishing) (EIR (Fishing)) Insurable Earnings Collection Premiums defined IV V See 14 I 5 Canada’s subdivided 58 economic regions total 6 9 must noted extension very rare indeed contrary extensions recent aftermath 2008 financial crisis Counter-intuitively federally rates equal everyone required qualifying differs per region5 (Medow 2011; Léonard 2014) left-over based regional rate; higher shorter duration generally 52 weeks can extended 104 exceptional also partially (Table 6) Finally affects they calculated 22 highest individual; amount paid used determined 5) There rationales differentiation idea ‘best-paid weeks’ rationale behind calculation best-paid “reduce disincentives accepting available work prior applying (Department Finance 2012 148; 2013 pp 6-7) way workers loose connection adversely affected possible future (more) poorly determination many best account dependent upon local eligibility criteria words (which entails claimants) increased accessibility eased durations prolonged lower second logic clear-cut than first 7 theory generosity counter-cyclical due structural heterogeneous performance among 7) likely function inter-regional redistribution mechanism Andreas Pollack finds that: business cycle effects unique features [Canadian] small compared resulting follows design” (Pollack 36) 8 Interestingly enough criticism equitable Much opposition Toronto-based Mowat Centre whose contributors argue good indicator accurately assess respond needs (Choudhry Pal Medow Day Winer 2011) rules disadvantage unemployed living Ontario Another ratios would retard migration there seems little empirical evidence claim (Day Although number without consequence weeks-system could promotes perpetuates who year (Mowat 8) 2013: 233-235 benefit-to-contribution III 10 complete overview standards out (EIOA) fully financed employer (60%) employee (40%) contributions contribution employers employees (Léonard 2014 14-15) Other differences include protection legislation Table appendix shows heterogeneity governments exert these setting ‘employment standards’ competence includes determining grounds termination anti-discrimination regulating dispute settlements etc practice relatively homogeneous exception Quebec (McMillan 1) Besides job multitude factors Nonetheless funds interesting size evolution beneficiaries-to-unemployed ratio describes (previously UI) caseload early stood above 70% (Lin 1998 42; Van den Berg Parent Masi 2004 29) currently decreased below 40% (Canada 2015) largest drop coincided reforming mid-1990s no surprise given fact aimed reduction costs; extent either individual (in requirements rule individuals out) relevance perhaps contributed limited prevent EI-beneficiaries (cf infra) Despite drops lowest scores regard overall strictness (Figure 11 regime strict comes demands mobility sanctions voluntarily leaving one’s relaxed monitoring availability ALMPs 2) might low replacement Entitlement Figure Overall Source: Langenbucher 27 Strictness 0 Average cases8 Welfare often “has maintained provides authority extend grants create programs matters exclusive jurisdiction” (Telford 15) had Since 1960s (CAP) redefined continued until 1995 Under (e g child care activity projects) shared equally receiving their own meaning spend others (Gauthier posed those (Canadian Association Workers 43) long standing cost-sharing replaced block-grant (CHST) consolidated health postsecondary unilateral move introduced state expansion: single provided opportunity expand Combined starkly increasing 1980s budgetary impact grew larger responded putting cap eventually altogether Transforming seen clear example reaction hazard: (and are) able design enabled increase 50% “The block fund territorial post-secondary services” cut $2 billion $29 old agreement entailed condition SA12: provide residency All scrapped financing tenable retain allocation formula distribution gradual indexation GDP growth Fears drastically efforts longer matched dollar 12 apply Here we see parallel (AFDC) (TANF) instances abolished favour block-grants Furthermore newly historical subnational patterns Moreover transformations ability manipulate risk insured CHST: stricter American mandatory AFDC-TANF introduction perceived provinces’ splitting up (CHT) (CST) 13 encompasses just meant cover line (FPFA) regulates sole criterion “that person live province territory minimum becoming eligible receive assistance” “Since name associated gives citizens illusion money being spent particular be” 33) evenly distributed capita basis automatically grows 3% every 15 method 2007 16 Preceding shift further eliminates possibility Provinces ‘insured risk’ mean however accountability issues 24-24 24 3-24 61 25 come across actually monitored requirement 2014-2015 budget $12 (Nadeau 3) As mentioned before: original pre-CHST resulted complicated became increasingly complex: pre-2007 sources: cash tax capacity scale back taxation step enhance precisely scaled equalization maintain poorer complexity what led 17 2010 183 000 cases vs 671 190 (Wood 2011a) enjoy almost control wish utilise pose entitlement downside Where once covered 50 cent Parliamentary Budget Officer 2010/11 2025/26 (Parliamentary institutionalised go deeper measures decrease) conditionality When put place 1940 anticipated ‘wither away’ occurred twice Every basic vary “basic cost food shelter clothing personal household items additional usually age disability transitional aims help lessen transition employment” 20) needs-tested themselves determine sources assets deducted exempted Additionally Generally applicants undergo administrative test program administered municipalities employable jobseekers); entirely managed civil servants (National Council 1-1) Based latest report National cancelled varied $9 593 $3 773 median $7 277 inadequate terms national low-income 2-1) Post-tax incomes claimants (WITC) varying regulations remains unclear interact ix) active somewhat diffuse types tend associate ‘activation turn’ Guiliano Bonoli argues: genesis such lies post-war strong focus ‘upskilling’ (2011 323) Ever Constitution But component ensuing dominance post-1940 created tensions because overlap especially adult provider thus forth contested contentious market-related During 1950s 60s developed specific target groups same started gaining UI-beneficiaries Klassen 5-6) form shared-cost diminished unilaterally stop late opting purchasing model institutions 2009 255) By mid-1980s oversaw 500 offices 1986 Jobs Strategy neediest clients (Fisher et al 2006 100-101) doing community agents (local provincial) introduce systems ‘workforce development’ 18 Specifically issue got pressing point view) downturns urgent limiting push reform compounded province-building ‘Workforce term goes beyond incorporate wider set activities including immigrant integration security human capital formation measures” 2009; Bramwell refers extends employed sense broader These developments combined retreat fiscal reasons 1990 fragmented patchwork particularly resolved acquire manpower ensure supports Quebeckers coherent view effective needed realise governance substance attempt permanently re-align attempts ultimately failed popular 19 near-death experience October referendum whether should independent main reason Ottawa offered devolve place: demonstrate flexible agreed Quebec’s long-standing position hence proved watershed respect Due resorted “para-constitutional engineering” (Poirier 2003) Decentralisation took right activate train People initial (Labour LMDAs) negotiated outlined primarily concerned process stretched Yukon last jurisdiction sign 20 mode prominent prolific: outside LMDAs entered disadvantaged (including recipients vulnerable people LMAs older workers) reaching 49 Of differ legal base (such EIA) sanctioned ministerial approval focused funding; ensuring evaluation priorities; similarity service provision country; delivering programming 14) came Meech Lake Charlottetown Accords encompassed much (Cameron Simeon 2002 55) Union Framework bring coherence accountability) achieve goals Devolved involved staff Some initially chose co-managed arrangements deliver 21 pilot projects run reshape severely leading commentators qualify “deeply flawed public policy” (Mendelson Zon 10) sudden radical side end date indicated wished make adjustments undertook series consultations March lapsed announced prolong nor renegotiate deals Instead wanted (CJG) re-orient away directly forcing match large extra hard stance (JFAs) bilateralism next subsections non respectively latter subsection full consequences JFAs yet (Employment Measures) mainly devolved along documents ministry Human Resources Skills HRDSC) identifies ALMPs: (EBs) (SMs) constituted consolidation vast range reduce expenditure EBs ‘targeted wage subsidies targeted supplements self-employment creation partnerships skills SMs innovation’ 18) jobless workers’; intensive delivered non-EI 210) Measure descriptions 210 Targeted Wage Subsidies assist participants obtain on-the-job toward wages encourages hire whom normally absence subsidy Supplements encourage persons accept offering incentives offers similar measure—Return Work Supplement—to expenses returning tools office materials clothing) Creation Partnerships opportunities gain lead ongoing Activities develop economy helps giving enables select arrange pay Self-Employment planning advice EI-eligible intended stages organizations enable counselling search job-finding clubs placement follow-up associations communities improve deal resource implement force involve developing plans strategies adjustment Research Innovation identify better ways helping prepare keep productive Funds carry demonstration purpose four five six

Download fulltext
277

1 Institutional moral hazard in the multi-tiered regulation of unemployment Belgium – Background paper Kim Lievens & Frank Vandenbroucke December 2015 This document reflects views only authors and European Commission cannot be held responsible for any use that may made information contained therein Please refer to this as follows: K F (2015) support ‘Institutional Moral Hazard Multi-tiered Regulation Unemployment Social Assistance Benefits Activation – A summary eight country case studies’ Abstract has been written preparation a research project funded by (on Feasibility Added Value Benefit Scheme contract VC/2015/0006) adds detailed analysis following deliverable project: studies; but it was not We concept ‘institutional hazard’ analyse intergovernmental relations within welfare states specifically domain unemployment-related benefits related activation policies (the ‘regulation unemployment’) is one separate studies focuses on The Belgian insurance system represented classic example institutional hazard: federally financed while regions were charge did have inherent incentives do so effectively possible To mitigate situation federal regional governments concluded cooperation agreement 2003 which introduced minimum requirements beneficiaries constitutional reform pushes existing logic devolution even further retained Keywords: hazard; states; relations; insurance; social assistance; Active Labour Market Policies; activation; policy; 2 Belgium1 thank Jan Vanthuyne Tom Bevers extensive very useful exchanges List Abbreviations ALMPs Policies HVW Hulpkas voor Werkloosheidsuitkeringen (public fund) OCMW/CPAS Openbaar Centrum Maatschappelijk Welzijn/ Centres Publics d’Aide Sociale (municipal centre SA) PES Public Employment Services RMI/DIS law … recht op maatschappelijke integratie/droit à l’intégration sociale (law ‘the right integration’) RVA/ONEM Rijksdienst Arbeidsvoorziening/Office National de l’Emploi (federal PES) RWB Regionale Werkloosheidsbureaus (offices at district level) SA UI Insurance VDAB Vlaamse Dienst Beroepsopleiding en Arbeidsbemiddeling (Flemish Introduction multi-layered Over course several decades series reforms devolved ever more powers authorities On hand level holds important competences with regard functioning labour market particular field security legislation (including benefits) other also wide regarding market-related issues such organisation (ALMPs) matching demand supply through (regional) public employment services After complex negotiations between government three (and parallel many rounds discussion partners) cooperative framework follow-up unemployed formally agreed 2004 different levels In 2013 new Cooperation Agreement negotiated latter will last specific kind; from onwards Belgium’s architecture changes context round so-called Sixth State Reform part evolution same challenges policy inspired Agreements; devolves political responsibility individuals living means-tested completely Thus we enter era consequences discussed sections 3 an exclusive competence Belgium: duration eligibility criteria are solely determined Trade unions play role practical administration intermediaries individual branch managed Arbeidsvoorziening (RVA)/Office (ONEM) main implementation i e deciding entitlement claimants determining their issuing payment orders bodies addition monitors makes sure violations prevented they occur sanctioned operates via 30 offices (Regionale or RWB; order avoid confusion Regions translate ‘regionale’ here ‘district’) process files decide done (uitbetalingsorganismen) fund (Hulpkas HVW) auxiliary funds linked trade get compensation costs based formula takes into account number cases Apart appeal disputes no influence whatsoever decision granting depends upon (VDAB FOREM Actiris ADG) (de Deken 2007) Figure dotted lines channels over exchanged Bruxelles Formation Arbeitsamt) exchange crucial assist finding job organise training programmes (failing take offer participate programme can reason suspending 4 Institutions actors Source: 2007 VDAB: Flemish Region Dutch-speaking inhabitants Brussels; RDBB: office Formation: institution overseeing vocational French-speaking BGDA-ORBEM (now called Actiris): Brussels Region; FOREM: Walloon (C: search assistance (FOREM Consultation F: Formation)); Arbeitsamt: German-speaking population eastern districts Hoge Raad Werkgelegenheid: advisory coordinating among Regions; FOD Werkgelegenheid Arbeid Sociaal Overleg: Federal Service Dialogue; RVA/ONEM: Office; RWB: offices; PWA: local agencies; ACV: Christian union (auxiliary body); ABVV: socialist ACLVB: liberal HVW: body; FSO: body redundancy payments (results under RVA/ONEM) mere fact person subject scheme salaried persons does give concerned must prove sufficient worked days equivalent during reference period some conditions met normative remains competence; led power respect countries two respects First principle unlimited Second unrelated load incorporates inactive who would entitled proper (long-term) invalidity early retirement pension Consequently comparatively big (see Table 4) general high certainly financially household medium- long-term sense somewhat resembles Austrian UA (in principle) fairly low generosity 5 notion ‘unlimited duration’ needs qualification though counts stipulate implies obligations: searching accepting ‘adequate offers’ being ready cooperate Individuals seen fail these obligations years article 80 benefit exclude if considered ‘abnormally long’ 1990s relatively lost With hindsight mechanism said rather brutal its (exclusion often without prior warning should look work) highly selective (it applied sub-category mainly women) effective terms (since incorporated strategy) Article replaced broader scope covers all initially restricted under-50s) nuanced application (with gradual sanctions) preventative than punitive effect critical note might say deployed still reach out (or least sufficiently) ‘stock’ Hence reality replacing art mechanisms sanctions control changed much overall strictness moderate (Figure 2) due relaxed availability suitable work combined strong reliance It however nature Overall Langenbucher p 27 6 Strictness 0 Average 8 cases7 leefloon/revenue d’intégration sociale) plays residual Belgium; budgets caseload marginal (compared unemployment) Those qualify up now fall back concerning municipal discretionary municipalities reflected differences approach laws rules conditionality measures versus supply-driven external partners (Hermans 2005) budgetary roughly formulated starting 50/50 division These administered (Openbare Centra Welzijn OMCW/Centres CPAS) centres run incomes members depend status means-test applies types income claimant: transfers real estate alimentation earned spouse parents (as long young claimant family allowance) children patrimony applicant reduced ‘abnormal way’ past five Already since 1980s3 features clear-cut distinction funding administrative management sanctioning when meet make them eligible employment) another (but effort Special Law August 1980 laggard actual shift passive occurred late systematic conforming 1997 guidelines Strategy implemented By time had created considerable tensions governance culminating departure Before there ‘preventative’ attempt activate entrants across regions; ‘curative’ (activating stock unemployed) disparate Conference September paved way change basic principles laid down April goal better coordinate instruments (counselling training) recipients rights rebalanced Within intensified guidance provided annual maximum contribution €24 million allocated according distribution key points listed 9 Main Communities active monitoring intensify unemployed: For inflow unemployment: before sixth month people (< age 25) 12th adult (≥ b point received mentioned a: months letter c where necessary soon sets own assess efforts jobseekers thus longer rely data (transmissions; cf infra) ongoing actions disrupt counselling targets full (meaning after full-time studies) Data ICT-based both directions doing burden minimised provide inter alia communication of: Information contacted ii outflow iii exemptions registration jobseeker Job offers four six

Download fulltext
276

o 1 Institutional moral hazard in the multi-tiered regulation of unemployment Austria – Background paper Chris Luigjes & Frank Vandenbroucke December 2015 This document reflects views only authors and European Commission cannot be held responsible for any use that may made information contained therein Please refer to this as follows: C F (2015) support ‘Institutional Moral Hazard Multi-tiered Regulation Unemployment Social Assistance Benefits Activation – A summary eight country case studies’ Abstract has been written preparation a research project funded by (on Feasibility Added Value Benefit Scheme contract VC/2015/0006) adds detailed analysis following deliverable project: studies; but it was not We concept ‘institutional hazard’ analyse intergovernmental relations within welfare states specifically domain unemployment-related benefits related activation policies (the ‘regulation unemployment’) is one separate studies focuses on The Austrian involves federal government regional governments (Länder) Public Employment Services (PES) dominant policy concerns were threefold: divergence between practices social assistance insurance caseloads increasing heterogeneity schemes principal-agent issues concerning PES harmonized different making all Furthermore negotiated nation-wide agreement with Länder Finally governance reformed more monitoring minimum requirements introduced Keywords: hazard; states; relations; insurance; assistance; Active Labour Market Policies; activation; policy; 2 Austria1 thank Helmut Mahringer very useful exchanges system List Abbreviations AMS Arbeitsmarktservice Österreich (federal PES) AIVG Arbeitslosenversicherungsgesetz (Unemployment Insurance Act) AMFG Arbeitsmarktförderungsgesetz (Labour Promotion AMSG Arbeitsmarktservicegesetz Service ASVG Allgemeines Sozialversicherungsgesetz (General BMASK Bundesministerium für Arbeit Soziales und Konsumentenschutz (Austrian Federal Ministry Affairs Consumer Protection) BMS Bedarfsorientierte Mindestsicherung (social assistance) SA UI Introduction relatively centralised As several other cases legislation financing (SA) responsibility lower tier Länder) Unlike most however completely central or AMS) including recipients For reason serves contrasting Another (related) interesting feature similarity German Swiss cases; experienced similar challenges those two countries (mainly stark dichotomy UI) opted response division labour stable important reforms are introduction semi-independent strong ties partners formulation an level With these moves shifted from political decentralisation towards delegation There parallels regard also case; takes up position Before we turn briefly identify certain characteristic state: equalisation payments In financial poverty under ‘statutory pension system’ “topped supplement reach threshold value (called ‘equalisation reference rate’ Ausgleichszulagenrichtsatz)” (BMASK 2014a p 78) rate tool determining amounts market-related will become clear (cf infra) wage used determine rates which topped supplements 3 history low replacement (Obinger Tálos 2010 110) Currently they stand at 55%2 resulting lowering generosity 2000 benefit can topped-up (predominantly form family allowance) increased maximum 80% aforementioned being ceiling top-ups interrelated: prevent beneficiaries falling below changes lowered families tightened sanctions limited accessibility 117) no limit (and UA) itself; instead top wage) (Steiner Wakolbinger 4; pp 14-15) duration fairly short: ranges 20 52 weeks depending contribution period extended 78 after completion vocational rehabilitation measures 4 However when comparing (certainly terms duration) note scheme people who exhaust their potentially indefinite See paragraph 21 (3) (4-5) 18 (1-2) does have strict eligibility criteria (see Figure 1) its job-search somewhat stricter than (Figure 2) It probable strictness UA prolonged indefinitely if comply (among factors) same infra discussion) coupled fact functions last resort large group long-term unemployed might explain relaxed Australian supra) Overall Source: Langenbucher 27 Strictness legislated Act (Arbeitslosenversicherungsgesetz AIVG) 1977 5 sensu stricto regulated financed revenues predominantly provided Other acts include Policy Financing (Arbeitsmarktpolitik-Finanzierungsgesetz AMPFG) (Arbeitsmarktförderungsgesetz AMFG) 0 Average 8 cases5 through employer employee contributions possibly supplemented some funds 6 These pay complete regime costs 7 much executive body disburses (1) AMPFG (2) paragraphs 41-52 33 9 10 section administrative board directors 58-59 responsibilities Until 1994 fully integrated into (currently Protection BMASK) (Arbeitsmarktservicegesetz AMSG) arm’s length along “the entire structure changed deep ‘culture partnership’ established” (Weishaupt 2011b 3) legally supervised three-tier structure: headquarters nine offices 99 local Its ‘executive body’ consists two-member while (Verwaltungsrat) ‘legislative’ latter includes members: three ministries (two Finance) each employers unions Hence outnumber governmental representatives actor: plays major part translation ambitions operational targets approves dismisses distributes budget 4) means itself features counteract associated agencies; dominate heavily influence policymaking goal setting interests employees words presence dominance function checks balances semi-autonomous When look there structural differences Four them had average over years others poorer performances time Although represent likely structurally heterogeneous least translated entails redistribution since finances Regional national 1990-2013 Wirtschaftskammern Österreichs 2014: 34 12 1990 1995 2005 2013 Burgenland Carinthia Lower Upper Salzburg Styria Tyrol Vorarlberg Vienna Austria7 already mentioned second-tier scheme: (UA Notstandshilfe) Notstandshilfe easy classify either because shares similarities both (its income-dependent tested cf analytical grid column integral (AVIG) subject residual persons exhausted claim11 meant emergency experience hardship previous run out nature reflected means-tested applied five exhaustion varies 92% 95% basic amount (which 55% earned starting (in relation allowing income spouses child 2014b 79) codified therefore almost regular except sense resembles former contrast implemented cantons still small number cantons) prerogative 11 Or early exit called ‘transitional allowance’ (Übergangsgeld) 36a 13 35 37 see 15 14 2012 caseload 131 217 105 132 around 221 000 2014 96 99; 81) (2007 5) development 1987-2005 (before reform What so distinctive about 98) Notstandhilfe officially (52 weeks) long met Beneficiaries qualify continue entitlement pass test implications: reduce opportunities cost-shifting Long-term received far less end size vis-à-vis smaller examined study exception Belgium increases need effective UI/UA ineffective could result share dependent clients eligible third historically 101) Due potential relevant always included work requirement enforced caseworkers (Leibetseder rigidity Research shown provinces half stated requirements: “Either [were] exempted obligation caseworker [refrained] imposing such [left] [federal] jobcentres scheme” 6-7) generally favoured sanctioning rather provision intensive upskilling 2014a) historical autonomy led efforts (Mahringer 2007 3-4) Similar caused concern Germany Switzerland indicator disparities capacity subnational institutional probably mix challenged formulated ‘nationwide security’ stipulates common standard new type (Bedarfsorientierte BMS) essence reaction facing 2007) authorities: dichotomisation (of regimes) due levels practice entailed inclusion-oriented “The just like Hartz intended harmonise existing regulations order combat effectively roll-out work-focussed approach reintegration (long-term) primary market” 6) merged adopted apply variation implementation adheres standards laid down committed set general principles contrary exist example receive free design above Besides combatting ensured combination make agreements Article 15a Constitution shift renew comprises ensure people’s subsistence housing needs afford protection sickness pregnancy childbirth” flat-rate mandatory single parents medical asset conditional upon (with exceptions categories retirement age) unlimited baseline linked stipulate every beneficiary claim services obliges various institutions well obliging collect data standardised manner 16 entail even possibilities equal article 24 17 extra total capped €50 million annually €30 per individual region articles 20-21 here overview Under financier situation Most enforce municipal payment 50% fiscal current constellation Despite budgetary did increase broadens before factors better spread higher ways i e reduction non-take worsening economic circumstance contributed post-reform (L&R Sozialforschung 21-30) interacts parts security (Reform Monitor Bertelsmann Stiftung 2010) “Roughly claimants roughly quarters defined statutory persons” institution tasks set-up supra organisational structure) Because provide specific tasked responsibilities: efficient placement workers overcoming hurdles immediate counteracting complexity market matching supply demand maintaining many jobs possible ensuring training youth promoting re-employment physically disabled securing jobseekers 19 delivering disbursing 29 26-27 22 Kombilohn subsidised Kurzarbeit hire 34a 37a-38 26-35 Even though actually delivered ‘third parties’ provides majority counselling adult education mostly private created Economic Chamber (Wirtschaftskammer) Wirtschaftsförderungsinstitutionen workers’ chambers (Arbeiterkammer) Berufsförderinstitute open everyone 2011a 12-13) Additionally charities (licensed) for-profit agencies deliver providers tend operate temporary employment (or communal institutions) perform niche ‘difficult-to-place clients’ 13) four appropriate During initial intake classified types corresponding so-called ‘three-tier zone’ first ‘info mainly aimed self-help given access facilities registered vacancies Secondly ‘service offers job-brokering claims processing where start ‘counselling full range ALMPs zone specially trained staff difficult-to-place If get automatically months dependency 27) promote sustain leave part-time older prospective forms subsidies22 professional scholarships principle afforded treatment go option yet nor systematically currently lies dealt territorial pacts Today deemed ‘capable working’ sent classifying incentives municipalities direct able-bodied would positively affect financially liable rendered opposition resistance Optionskommunen 2011c 213) without connection (provided offices) remain focus loss control nationwide assures 23 To do involved required necessary job search report jobcentre modified themselves codify own remaining variations entities Leibetseder notes ten applications month verified 112-113) 49 Concern centralisation role analysed played dumping renewal addressed together treatments agency: eliminated agency Two hold caseload: Australia marginal privatised results larger reasons begin profits formal channels minister thus level) behaviour goals (such context) stronger way influencing 25 why extensive dense difficulties balancing flexibility multitude active influential Centrelink actors take Thirdly subcontractor enter contracts directly ministry differs reasons; firstly (ALGII) federalised especially comes regulatory bears impact feel pressure Consequently concerned ones downside move deal clash culture approaches lead (are seen to) overly shelter (especially often focussed work-first brings us difference Germany: remained outside scope natural experimentation (they Optionskommunen) seem tune actor closes off arise requalifying merge remains meaning Thus short- framework enforces performance measurement Goals ‘broad guidelines’ consultation then translates plan must approved board; actual 26 transpose add objectives district task implement achieve nationally- Länder-set 28 supported tripartite councils 5-9 40 15-16 parlance referred ‘regional’ Following determination approval sets annual ‘balanced scorecard’ clearly outcome-oriented overarching target incorporates inputs outputs outcomes quality Table Indicators Balanced Scorecard 2013: 30 quantitative personal fixed separately men women” (AMS Achievement Outcome Duration Intermediate outcome Outflow six Success Satisfaction Output (quality) Proportion expenditure women Input job-seeking Process service Utilisation e-service Penetration apprenticeship places enterprises Exact Job satisfaction internal advancement Development selected material Performance call centres ne

Download fulltext
275

1 Institutional moral hazard in the multi-tiered regulation of unemployment Australia – Background paper Chris Luigjes & Frank Vandenbroucke December 2015 This document reflects views only authors and European Commission cannot be held responsible for any use that may made information contained therein Please refer to this as follows: C F (2015) support ‘Institutional Moral Hazard Multi-tiered Regulation Unemployment Social Assistance Benefits Activation – A summary eight country case studies’ Abstract has been written preparation a research project funded by (on Feasibility Added Value Benefit Scheme contract VC/2015/0006) adds detailed analysis following deliverable project: studies; but it was not We concept ‘institutional hazard’ analyse intergovernmental relations within welfare states specifically domain unemployment-related benefits related activation policies (the ‘regulation unemployment’) is one separate studies focuses on The Australian involves two federal departments Public Employment Services (PES) private agencies gradually privatised major benefit Reforms moved system away from ‘black box’ approach towards more minimum requirements monitoring control those experience suggests trade-off between need hand flexibility processes other Keywords: hazard; states; relations; insurance; social assistance; Active Labour Market Policies; activation; policy; 2 List Abbreviations AAS Annual Assurance Statements APM Participation Model BMA Bilateral Management Agreement CES Commonwealth Service DE Department DEEWR Education Workplace Relations DHS Human EPP Pathway Plan FaHCSIA Families Housing Community Indigenous Affairs JSA Job JSKA Seeker Account KPIs Key Performance Indicators KPM Measures NSA Newstart Allowance JS search SA SSA Security Act SSAA Administration UI Insurance WfD Work Dole programme YA Youth Introduction bit an outlier our selection systems both concerning type way which delivered completely characterised managerial decentralisation opposed political present some measure or another cases we examine When comes schemes different most OECD countries sense (1) does have substantial assistance scheme (2) its single important flat-rate means-tested near universal terms eligibility (Davidson Whiteford 2012 pp 8 13-14) Australia’s foremost labour market marginal All fall under categories: pensions allowances (OECD 149-150) are financed general (federal) government revenue Pensions often consist higher generally require little no because they targeted at groups unable work On include intended who able level holds responsibilities greater (financial) powers than (or ‘Commonwealth’) historically collected bulk tax revenues through can exert considerable influence “vertical fiscal imbalance” perhaps cause strong horizontal balance found Australia; country’s equalisation strongest all federations (Castles Uhr 2005 p 60) In practice delegation takes form extensive privatisation delivery During 1990s first started experimenting with resulted ALMP 3 certainly examined There such turn entails there also institutional since insurer-insured relationship conceivable Instead perverse incentives mostly arise out principal-agent relationships 4 Historically well means- asset-tested 1991 (JA) (NSA) replaced former JA applied young mature unemployed individuals had less 12 months while introduced long-term Finally 1996 were combined into still called short period ended 1998 introduction (YA) persons age 22 recent pieces legislation (SSA) 1999 (SSAA) already 1988 special 40 000 clients See part 11 subdivision scope are: being having right (22 above) remaining active seeking employment For reason last-resort 157) Figure strictness quite strict overall context (Langenbucher 2015) due availability during participation ALMPs occupational mobility (3) frequency (Figure 2) These items result high scores job-search However sanctioning regime comparison so last resort withholding severe sanctions repeat offenders seen punitive counterproductive 29-30 102 159) Overall criteria Source: Langenbucher 27 5 Strictness 0 6 Average administration initially responsibility (DE formerly DEEWR) however involving contact jobseekers disbursement done Centrelink agency currently (DHS) inter-agency cooperation further elaboration three key actors latter now falls authority always enacted 1997 arm’s length payments services It serves initial point Initially reimbursed (then called) (FaHCSIA) operations 2009 2010 directly budgets aforementioned departments; ‘partnership’ model purchaser-provider arrangement (Auditor General 2013 25-26) 2011 formally subsumed means funding flows performed partnership agreement enters agreements Ministry Agreements (BMAs) policy outcomes design setting approaches DHS/Centrelink implementation (cf Table appendix precise division responsibilities) “Under program appropriated reflected then Business Partnership adopting compliance oriented managing Centrelink’s service delivery” 26) Officially rate principal carer cares very large family foster children) home distance educator children their care here details supplements available beneficiaries Health Care Card Rent Family Tax miscellaneous 11-13) Some these built-in ‘welfare locks’ (Bodsworth 2010) Other disincentives stem fact indexed prices wages 29) 16 indexation 7 Parent Payment Disability Support Pension Such measures included gradual closing off Partner abolition Wife restriction regular Mature Age 9 LFS category caseloads probably actively almost half job search-exemptions would overlook significant caseload words closest proxy Furthermore opted smaller territories; geographical units represent over 98% population rates 561 80 AUD person dependent 468 partnered per fortnight low effective replacement even among similarly structured ranks lowest scoring 151) generous increases apply rather activation-tested 18; reforms partially aimed moving main (NSA YA) 39) individual each differently sized shows average highly populated whole 2000-2015; range just 4% capital territory 5% Tasmania Because process federally transfers Nonetheless structural differences do redistribution funds across state/territory Bureau Statistics Force could categorised assistance: above 2% 9) 10 will therefore forgo section effect functions covered 15 2000-20158 Activation11 covers focus Like United States types might sometimes rivals size divisions basis Although functional equivalent subjected Parenting Payments residual allowance (including benefits) principle subject same recipients classified Being multiple reasons receiving registered jobseeker: possible exempt meeting (being training combination part-time parents); sanctioned suspended 122) Additionally people volunteer jobseeker without Every exemptions (Department 2014 B 175-179) serviced Unemployment-related given much impetus mid-1980s mid-1990s when performance falter As early 1970s separated PES implemented (CES) experimentation programmes experimentations relevant seeds what later become fully-privatised Private community compete used implement shifted intensive abolished (Considine Lewis O’Sullivan 815) previously arm’s prominence Originally basic administrative network provided essence step full where operated agents rise after focused adjusting governance managerially decentralised relatively adapter New principles quasi-market mechanisms unchartered waters new tendering rating providers adjustment Further focussed standardisation hampering ‘quasi-market’ existed side-by-side time disappeared 2000 54) contractors contentious leeway granted tried negate created restricted operational freedom local reducing characterises Not According study ‘jobseekers’ either met approved activities temporarily incapacitated 154-156) number non-jobseeker explained (and strengthens view that) devolved administrated interaction must noted although officially participate voluntary (which satisfies requirement) ‘jobseeker’ 13 Compact ensured six paid everyone reached 18 expanded vocational (JOBTRAIN SkillShare) wage subsidy (paid) (JOBSTART Experiences) rising One impactful Working Nation elements: ‘consumer choice’ guarantee openings Compact) element entailed referred sector contracted partners competed competition raise efficiency “this undesired managers tended make referrals [guaranteed programmes] open market” 163) ran 1994 elements lasting legacy system: hallmark workfare acts default option But poignantly tension day began newly elected current institution designed quasi-independent; provide ‘basic services’ elaborate non-government 815; Davidson 18) (WfD) activity test Activity provisions amended enable voluntarily required condition retaining entitlement Allowance” guaranteed every activity-tested beneficiary consisted maximum satisfy principle: Mutual Obligation “This obligation ‘participate activity’ return payment benefits” After client commenced 6th month 14 requirement satisfied least hours week weeks relocation participating Intensive justified idea ‘consumer-choice’ chose own provider 70) Surveys reported “nearly quarter visited once twice” 224) 17 final round longer meant bi-annual comprehensive tender continual review Providers usage though Privatisation taken up notch “fully competitive 300 Network driven job-outcome-related broad determine provision” 62) function purchaser public (1998-2000) asked bids services: Matching Search Training reverse order intensity free choose divide enforce agreed-upon share By dividing second (2001-2002) took account price past mandatory levels change reaction evaluation signalled actually engage Additional changes third (2003-2009) (APM) contracts enter below requirements) integrated set entire clients; continuum certain steps (mostly interviews) tied fees; financing introducing (JSKA) earmarked specific deposited;18 finally 71) reactions side Mainly tendency try cherry pick favourable hard-to-place said “black-box supervision behaviour feedback about clients” “prescribed undertake interviews jobseeker” 72) earliest trying modify arose too unchecked 2007 along five (JSA) reform “one fits all” inflexible orientated disadvantaged groups; considered overly fragmented rhetoric perception streamlining tools controlling built around ‘streams’ 19 until four streams stream fourth markedly rest: (Personal Programme) attracted fees draw (EPP) interview predetermined 20 surrounded (increasingly detailed) classification assessing footnote 19) IT-system (EA3000) severely limited e g 820) (partially) Stream 21 Through formulates interventions based Streams Charter Contract together Communication Protocols accompanies formal legal bound Code Practice management infra) regulations amounted presented somewhat similar Denmark municipalities Danish central struggled balancing control; structures constant fairly place issues concerned dumping municipal involved regulating Classification Instrument (JSCI) score beginning determines applicable 110-111 discussion JSCI whether should create classify highest sign reclassification 80) despite eventually altogether 92) Besides changing Stream-structure move forward increase emphasis hands 2014) table Source 2014: 31 STREAM JOB COMPETITIVE specified VOCATIONAL ISSUES SERIOUS NON-VOCATIONAL via ESAt referral Seekers 30 Stronger Full capacity* capacity Initial Contact Comprehensive Interview Referrals jobs Identify strengths 0-6 Case Monthly contacts Self help Monitor Report non competitiveness address non-vocational 6-12 Phase 25hrs 15hrs cf plan 12-18 Cf Eligible Wage Subsidy (25 30s) subsidies group 30s 18-24 0-12

Download fulltext
271

Institut de Recherches Economiques et Sociales REGARDS ECONOMIQUES • PAGE 1 La Commission réforme des pensions 2020-2040 a dans son rapport juin 2014 proposé une notre système pension vers un à points L’accord gouvernement du 11 octobre repris cette proposition 2 Depuis la discussion sur le report l’âge légal 67 ans en 2030 qui se trouvait marge occulté coeur concernait C’est dommage car ce visait justement déplacer centre gravité conditions d’âge carrière Le concept central d’un est celui d’une durée référence non plus âge uniforme Pour utiliser métaphore simple considère que kilométrage meilleur indicateur voiture pour décider s’en séparer Dans cet esprit normal départ déterminé base exigence générale début propre chacun On peut donc partir tôt si l’on commencé sa cela sans pénalité Si preste au-delà on reçoit supplément mesure où kilomètres au compteur reste moins longtemps réduite les raisons inverses Un autre enjeu important protéger Une publication économistes l’UCL Réforme légales : points* Mars 2017 Numéro 130 s’est engagé mettre place comme par 2020- 2040 Nous expliquons comment fonctionne flexibilité intégrer pénibilité métiers temps partiel discutons mécanismes pilotage face vieillissement l’évolution l’emploi Jean Hindriks * Les auteurs remercient Vincent Bodart Muriel Dejemeppe Pierre Pestieau leurs commentaires suggestions sont aussi redevables l’ensemble membres ont participé l’élaboration seuls responsables contenu erreurs éventuelles version détaillée disponible anglais Schokkaert Devolder Vandenbroucke (2017) «Towards an equitable and sustainable point system» CORE Discussion paper 2017/06 http://pension2040 belgium be/fr/ http://www premier be/fr/accord-de-gouvernement Erik Frank changements démographiques économiques (dont l’emploi) Comme indiqué graphique depuis 2003 dépenses évoluent rapidement cotisations sociales (sur période 2003-2015 augmenté deux fois vite sociales) Cela passe dépit Pacte solidarité entre générations (23 décembre 2005) réformes successives gouvernements Di Rupo 1er Michel décrochage soi résulter politique d’allègement charges avec financement alternatif promouvoir l’emploi Néanmoins recours n’est pas inépuisable d’ajustement équilibrés s’avèrent indispensables permet faire toute transparence contrat social robuste équitable demeure mystère certains d’interrogation d’autres allons tenter d’expliquer simplement Ensuite nous discuterons ses avantages existant bien comprendre considérons régime salariés proche actuel calculée moyenne salaires bruts (non revalorisés hors inflation) multipliée coefficient représente fraction (par complète) multiplie taux remplacement référence3 procède façon assez comparable calculer sauf remplacent applique corrections actuarielles Concrètement manière suivante Pendant Monsieur Paul accumule compte «points» prorata salaire brut annuel relatif moyen En exprimant relative ap- Graphique Evolution (retraite survie) (indice 100 = 1985) Sources Comptes Nationaux Bureau Fédéral Plan SPF Sécurité Sociale calculs propres Comment ? 0 50 150 200 250 300 350 400 450 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2015 Dépenses totales (en indice 1985=100) Cotisations PENSIONS COTISATIONS 3 être complet varie selon situation familiale (isolé ou ménage) plique facto revalorisation automatique gagné hier même valeur qu’un aujourd’hui équivalent il obtient s’il 80 % 8 120 4 pendant complète après 45 années total acquérir travaillant et/ou gagnant obtenir périodes d’inactivité (chômage indemnisé maladie congé parental crédit-temps etc ) fictif Au moment retraite Mr euros conversion tout (ou partie) disponibles (1) (2) tous prise (indépendamment l’année ils été acquis) l’affilié assurer neutralité actuarielle calcul 5 mensuelle Pension Points x Valeur Point Coefficient égale ratio mensuel (43 exemple) multiplié cible fixée niveau assure qu’une personne fait obtienne (rapport moyen) égal 6 Il possible chaque année effet 110€ 2016 43 5×3100/43=35€ restent constants l’autre indexée croissance nominale (incluant l’inflation) forme correction l’écart effective termes implique malus travaille (anticipation normal) bonus (voir l’encadré page 5) Exemple travaillé 20 premières perçu 90 110 23 dernières accumulé (20×0 9) + (23×1 1) 35€ Sa 515€ Supposons maintenant souhaite reporter supplémentaire 44 gagne (si doit tenir plafond plancher d’acquisition Ces seuils indexés l’évolution vise garantir qu’en cas d’anticipation (relativement apportée compense exactement coût budgétaire l’Etat paiement longue l’annexe complémentaire d’avril propose Ce belgique be/docs/042015-annexe-3-fr pdf d’ancrage «contrat social» envers futurs pensionnés (supposons %) soit 02 35 7€ augmente (44 ans) supérieure 7 devient 3+1) (35€x1 02) (1 034) 628€ (soit augmentation 113€ mensuelle) note travailler triple supplémentaires élevé durant indexées soutenabilité capacités particulier contrainte l’exige l’indexation partielle (coefficient inférieur Analysons aspects importants grande gestion départs progressifs via d’intégrer cohérence tenant caractère évolutif d’organiser sortie progressive marché travail présenter inconvénients fin étude récente semble avoir encouragé anticipés indispensable adéquates (et généralement possibilité d’anticiper légale) crée terme beaucoup systèmes actuels prépension crédit contexte anticipée n’y d’équivoque statut s’agit l’individu jouit réelle liberté qu’il veut ne ‘disponible’ prépensions restriction l’activité professionnelle tant l’équité voici illustration tenu 63 prendre mi-temps 60 Compte décote sera 9 – (3×0 A 40 décide convertir moitié première (40/2) 630€ Cinq tard 65 définitive supposant ait lui (5×0 6) Voir l’encadré B Cockx M Van Der Linden L’emploi seniors Belgique quelles politiques quels effets UGent UCLouvain Politique scientifique fédérale recherche belspo be/belspo/fedra/proj asp?l=fr&COD=TA/00/44 passée 38€ dorénavant favorable (63 07 (2×0 seconde (40/2+3) 935€ 38/35 684€ totale somme 619€ consiste octroyer complémentaires l’exercice métier jugé pénible seulement période) afin compenser l’effet négatif Ainsi induit pourrait imaginer montant sorte neutraliser complètement autorisant avant subir perte compensation uniquement pénalise travailleurs s’orientent pénibles boutade qu’ils capables prévoir presque futur devons veiller doter mécanisme plusieurs variables Evidemment ces ajustements préjugent ad hoc variable prioritaire (notamment adapter l’augmentation l’espérance vie) veillant introduire compensations appropriées possibilités suffit rétablir l’équilibre financier faut ajuster cotisation sociale conjointement respecter partage charge l’effort actifs proposons règle stabiliser pouvoir d’achat (la proposée Richard Musgrave) démographique Formellement calculé vie effectif anticipe supérieur reporte l’exemple (20 Dénotons e(63) partie e(60) espérances e(63)/e(60) qu’à deuxième e(65) e(63)/e(65) courte ENCADRÉ Mécanismes Musgrave (1986) «A reappraisal of Financing Social Security» in Public Finance Democratic Society Vol New York Press contraction supporter dépendance économique10 suggère prestations définies (notre actuel) De contributions (le suédois italien allemand) intergénérationnel risques celle structurelle formule indépendants dépend transition revaloriser anciens prix neutralisant l’impact ajustement offrir équivalente nouveau l’ancien génération modalité affiliation successive Cette présente l’avantage «garantir» droits passés devoir Elle s’apparente projet carrières mixtes laquelle mixte combine différents régimes activité ancien rétrospectivement écoulée suit concerne inégalités trois (salariés fonctionnaires) cohérente convergences souhaitables décrites Pensions minimum cohérent y décrit ainsi dimension notamment principe sein ménage jean hindriks@uclouvain be pierre devolder@uclouvain erik schokkaert@kuleuven F I G Vandenbroucke@uva nl d’ajustement 10 économique population emploi) l’un pertinents réfléchir sécurité général) professeur d’économie senior fellow l’Itinera Institute chercheur (UCL) statistiques l’ISBA KULeuven l’Université d’Amsterdam quatre actuellement Conseil académique matière Regards Économiques IRES-UCL Place Montesquieu B1348 Louvain-la-Neuve www regards-economiques regard-ires@uclouvain tél 010/47 34 26 Directeur Rédactrice chef Comité rédaction Belleflamme Frédéric Docquier Marthe Nyssens William Parienté Mikael Petitjean Secrétariat & logistique Anne Davister Graphiste Dominos ISSN 2033-3013

Download fulltext
CSB_Working_Paper_Goedeme-Trindade-Vandenbroucke

CSB WORKING PAPER centreforsocialpolicy eu March 2017 No 17 / 03 University of Antwerp Herman Deleeck Centre for Social Policy Sint-Jacobstraat 2 B – 2000 fax +32 (0)3 265 57 98 A pan-European perspective on low-income dynamics in the EU Tim Goedemé Lorena Zardo Trindade Frank Vandenbroucke and Working Paper 16 Forthcoming in: Cantillon T Hills J “Improving poverty reduction Europe” Oxford: Oxford Press ABSTRACT1 In this paper we study trends at lower tail EU-wide distribution disposable household income contrast to most studies take a compare levels across countries after accounting average price differences More particular make use EU-SILC 2008 2014 low proportion gap From analysis emerges highly dynamic picture which points both convergence especially since 2010 divergence Living standards new Member States notably Poland Slovakia Bulgaria have considerably improved comparison with median while living Greece lesser extent Spain Italy clearly lost ground These mark an important change composition bottom increasing weight ‘old’ end crisis-hit Southern European Worryingly also observe that no country succeeded substantially reducing at-risk-of-poverty rate This emphasises need dual solidarity national underscores importance reflecting further mutual insurance true borders Corresponding author: (CSB) Faculty Political Sciences Email: tim goedeme@uantwerpen be 1 We are grateful John Bea Zach Parolin comments suggestions The research article has benefited from financial support by Flemish Methusalem Programme data were made available Eurostat (Contract RPP 175/2015-EU-SILC-ECHP-LFS) usual disclaimer applies 3 Introduction Income inequality complex phenomena Europe they often studied Indicators relative such as Gini coefficient predominantly used within indicator compares incomes 60 per cent As result remain largely invisible However required understanding challenge Union By assessing common standard it is possible gain more insight into improvement or deterioration poorest people compared rest EU’s population helps shed alternative light progress towards goal greater social cohesion (e g Brandolini 2007; Fahey 2007) complementing predominant analyses addition facilitates better disparities between poses policy initiatives (cf & Van Lancker 2009; Levy Matsaganis Sutherland 2013; Mechelen 2013) Therefore recent other mostly based Several authors directly comparing citizens Some looked excluding post-2004 Anthony Atkinson 1996; Beblo Knaus 2001; Berthoud 2004; de Vos Zaidi 1998; 1990; Kangas Ritakallio including least some Boix Bönke Schröder 2015; Förster 2005; Lelkes Medgyesi Tóth Ward Whelan Maître 2010) few changes over time if done so mainly focused whole characterizing clusters Collado 2016) Previous highlighted following First developments policies level impact upon Heidenreich Second those relatively very different With (national) at-risk-of tend live when benchmark about forty 4 joined 2004 spite their share Third rates can standards: threshold tended decrease during past decade increased several periods thresholds Fourth substantial taken place strong reductions number households below 40 (Goedemé 2016; Meeusen 2014) previous contributions disaggregate track country-specific patterns focus onset economic crisis For doing two indicators: (LIP) ratio (LIG) Both indicators defined percentage controlling LIP look LIG size four questions: (1) How evolved individual States? (2) changed crisis? (3) Which contributed (changes in) LIG? (4) do these rate? 2008-2014 consider all except Croatia acceded period under consideration structured follows set scene motivate our choice reference what original inspiration project simultaneous pursuit upward second section briefly explain methodological choices present third empirical findings discuss consecutively questions before Thereafter conclude 5 Two perspectives presented illustrate ‘cohesion’ On one hand there well-known expression associated inclusion traditionally understand aspiration prosperity Indeed ‘cohesion policy’ dimension ‘Economic cohesion’ 1986 Single Act ‘reducing various regions backwardness least-favoured regions’ EU’s treaty Lisbon Treaty adds another facet referring ‘economic territorial overarching assess (AROP) 60% i e individuals Admittedly AROP but amongst many Nevertheless believe arguments measure central order gauge thus ‘social wish here (for argument see Barnes Marlier Nolan (2002); affirmation same view (2014)) apply (technically) similar (the 40% median) not argue applying yields ‘relative poverty’ elaborate multifaceted discussion meaning measurement ‘poverty’ today’s integrated (see instance 2012; Rottiers 2011; 2009a 2009b); reason neutral expressions ‘LIP’ ‘LIG’ think useful historical point purpose socio-economic domain: say LIP/LIG only should Union; yet residents State lives provides reality sufficiently large complement 6 GDP capita technical similarity using (or 40%) respective cut-off sheds interesting fundamental founding fathers integration been described ‘convergence machine’ (Gill Raiser 2012) Convergence was just pre-condition continuing integration: ‘output legitimacy’ (through gradual development welfare states) Union) who prepared Rome optimistically assumed growing could reached supranational cooperation together specific instruments raising member states (which later brought policy) Economic organised would boost growth create convergence; domestic redistribute fruits remaining prerogative hindsight (and slightly benign interpretation) may created cohesion: sure apart redistributive aspects agricultural limited degree cross-country redistribution favour less-developed through structural funds context approach Nor risks words did envisage organisation normally implies mixtures Historically fathers’ implied fair access opportunities: trade investment opportunities joining personal wanting needing mobile Stretching notion ‘inclusion’ might pursuing motivated (relatively vague) scale It explore Until mid-2000s considered successful seemed vindicated optimistic belief Since then model broke down stopped being 7 Overall recorded impressive accession Eurozone triggered process members Commission Within overall position pensioners among non-elderly mutually reinforcing processes polarisation leading significant work-poor weak attachment labour market; experiencing higher latter trend already started (Cantillon 2014; Rinaldi 2015) Data Statistics Conditions (EU-SILC) provide harmonized information well additional meant representative sample persons private 20142 exception Ireland United Kingdom refer year survey composition) refers years reported figures rather than Although annually 2005 focuses 20143 limit break series income4 regard source vs register At writing Brexit referendum took Given covers pre-Brexit include 2007 UDB version (UK) 2009 2011 2012 2013 improve consistency UK merged subsequent countries) Four 2008: France Austria Cyprus Other breaks appeared date: wave Denmark Estonia attempted any correction equivalent multiplied factors ensure perfect alignment estimated estimates 8 data) collection modes weighting schemes imputation procedures constitutes best comparative conditions EU5 designs errors calculated assumption simple random sampling strongly downwardly biased recommended (2013) considers reconstructed design variables6 optimal calculate covariance waves expected over-estimated noted fact itself estimate basis non-negligible effect variance (Berger Skinner 2003; Preston 1995) account making DASP module developed STATA (Araar Duclos reasons decomposing Changes statistically 95 confidence start income7 Equivalent equals sum after-transfer net taxes adjusted needs modified-OECD equivalence scale8 interested cross-national real currencies selected first convert expressed purchasing power (PPS) parities (PPPs) final consumption Even though PPPs faced limitations Deaton 2002; Milanovic 2005) tool cross‐nationally comparable PPS express year-specific allows us how (2007) Iacovou Kaminska (2012) Decancq den Bosch Vanhille (2014) variables downloaded https://timgoedeme com/eu-silc-standard-errors/ Incomes coded country-year top-coded 10 times non-equivalised so-called ‘LIS procedure’) See Kerm treatment extreme values modified OECD attaches adult 0 aged 14 older less 9 bundle calculating others lead Furthermore necessarily constructed basket goods services reflects groups neglect within‐country forward simply ‘income’ denote related measures equal poor averaged total part Foster-Greer Thorbecke (FGT) index (Foster Greer 1984) FGT found et al Results So far aggregate highlight LIG; contribution correlation Pan-European glance grasp wider each Figure depict kernel density curves expressing (while taking account) graphs clear quite re-ranking throughout richer Belgium Finland Sweden Malta experienced given high happened above Netherlands seen distributions fall Central Eastern immediate effects Over Czech Republic Romania grow Hungary Lithuania (even years) Slovenia decreases somewhat depending 11 Kernel (EU27) 12 Notes: Breaks (2011) Source: own calculations details) helpful having quick allow precise interpretation direct estimation considerable expect movements unclear work fell much Also year-to-year modest (at 95% level) dropped 13 24 22 three quarters drop realised remained pattern observed stagnation surprising responses followed continued absolute Leventi apparent contrasts sharply shows detail variation enormous Luxembourg Latvia 50 even 90 looking larger vary entire (-33 p ) (-22 display strongest (+25 Substantial Estonia9 (all -10 more) whereas increases (between Remarkably does figure list indicating had stronger depicted worth pointing out timing varies biggest concentrated next witnessed increase varied caution Estonian intervals Countries ranked wonder whether observation graph threshold10 line Sala-i-Martin (1996) linearly regress annual beginning beta-convergence ordinary square regression EU27 15 (i threshold) Percentage dotted linear Please note x y-axis highlights diverging Baltic six 26 (with Estonia) Six Finally ranges -0 065 27 23 coefficients negative lifting case lifted changing suggests respects captures heavily dominated countries: concentration nearly lived either accounted 56 LIG11 becoming Whereas initially 18 its halved Germany EU15 43 Still consequence become closer country’s Nonetheless deviations still exist: now numbers exactly tell resources EUR distributed reduce zero measured ceteris paribus smaller underestimate flow overrepresented assume exogenous imply small populations bigger contribute quantify precision mechanical way (that causal framework) follow spelled Corluy (2012)12 decreased declined mentioned earlier decline stability inertia compensatory (ΔLIP) decomposed follows: component consists difference factor shares decomposition purposes caveats borne mind assumes ignores via differential mere attempt construct realistic counterfactual detailed limits 19 sorted included ≥0 01 20 Figures neglecting entirely unexpectedly almost half lack thereof) utmost keeping (especially income) 21 side pushes contributing came primarily evenly Contrasting introduction argued indispensable enlargement verify obtaining typically uses improves question achievement (a) catching-up terms middle-group whose shifts (b) improvements internal (from incomes) hardly achieve combination combined instances Notably none Potentially signals kind ‘trade-off’ Presumably why (in brief window observation) linked crisis: produced ‘national like Conclusion calls studying exceptions received little attention explored draw What short because cancel visible really Romania’s general rule sharp Moreover insofar story behind collapse traditional mixture failures architecture heterogeneity enlarged longer-term generate working age Whatever solutions proposed variety problems besetting monetary union banking union; fiscal capacity possibly re-insurance unemployment genuine scheme) always entail ex ante organization mechanisms polity emerged ‘opportunity structure’ Simultaneously supporting presupposes active ‘human capital’ deemed necessary (Vandenbroucke Thus logical ago defining normative feature ‘the Model’: Model summary description co-existing models; describes interact supposed Hence conceptual apparatus describe interaction way; methodology promising 25 References Araar -Y DASP: Distributive Analysis Stata Package: PEP CIRPÉE World Bank Université Laval Review 12(1) 15-28 E (2002) Indicators: Inclusion M (2001) Measuring Inequality Euroland Wealth 47(3) 301-320 Berger Y G C (2003) Variance Estimation Low Proportion Journal Royal Statistical Society Series (Applied Statistics) 52(4) 457-468 R (2004) Patterns Poverty Bristol: Calibrating cross-European Colchester: ISER Institutional Accomodation Enlarged Bonn: Friedrich Ebert Stiftung (2015) European-wide Berlin: DIW Measurement Distribution Supranational Entities: Case S P Jenkins Micklewright (Eds Re-Examined (pp 62-83) Beyond Investment Concepts Values Policy-making F Reconciling states? 286-318) V Individual Employment Household Risk Decomposition 80) Antwerp: K (1998) Union: Country-specific Union-wide lines? 8(1) 77-92 monitoring MDG New York: Nations Development Evolution Europe: 60-93) jobs Promoting good governance cities Sixth report Luxembourg: Publications Office Eurostat-OECD manual (1990) Figures: Early 1980s Official Communities Measure Sociological 23(1) 35-47 (2005) Space Revisited: Comparing Comparative 7(1) 29-48 Foster (1984) Class Decomposable Measures Econometrica 52(3) 761-766 Gill I Golden Restoring lustre Washington DC: EU-SILC? Complex error 2020 Research 110(1) 89-110 D (2016) machine To benefit citizens? Common Market Studies 54(5) 1142–1158 L Mountains move: old – Discussion Definitions Reference Groups Sociology Compass 5(1) 77-91 W (2009) Universal Basic Pension Europe’s Elderly: Options Pitfalls 4(1) Article 26p Europeanization eurozone inter- supra-and transnational (Ed Exploring Diverging employment 22-47) Cheltenham: Edward Elgar O H Using analysis: strengths recommendations Essex: -M Relative What? Cross National Pictures Measured Regional Standards Societies 9(2) 119-145 Inequalities 17-44) Budapest: Tárki Towards Child Income? International Microsimulation 6(1) 63-85 Facing challenges distributional austerity recession South Politics 19(3) 393-412 Worlds Apart Global Princeton (1995) Sampling Distributions 44(1) 91-99 X Classical Approach 106(437) 1019-1036 Extreme (No NO 2007-01) CEPS-Instead N Minimum Protection: Clarifying Conundrum Marx Nelson Protection Flux 271-317) Hampshire: Palgrave Macmillan inequalities Vision Susmmit Consortium Redesigning Ways 38-77): Gütersloh (2009a) ‘Europeanisation’ Reconsideration 11(2) 283-309 (2009b) 19(2) 117-130 (2010) 26(6) 713-730 Notes updating 2012-2014

Download fulltext
Vandenbroucke_contribution_Buruma_book_as_submitted_19.3.2017

A 1 Social policy in a monetary union: puzzles paradoxes and perspectives Frank Vandenbroucke University of Amsterdam1 Submitted for publication as chapter in: Boone Marc; Deneckere Gita & Tollebeek Jo (eds ) The End Postwar the Future Europe – Essays on work Ian Buruma Verhandelingen van de KVAB voor Wetenschappen en Kunsten Nieuwe reeks 31 Uitgeverij Peeters Forthcoming Abstract All existing unions centralise to various degrees specific social functions notably that support economic stabilization like unemployment insurance European Monetary Union features only exception Compared United States organises more solidarity within its member states but far less between states: this is an untenable paradox strong parochial Any way out leads complex puzzle sovereignty mutual trust One should not underestimate complexity solving it implies lasting fragility construction Contrary what sometimes argued we are facing ’tragic dilemma’ integration maintaining welfare need repair major design flaws solution does point state true union would national systemic level some their key It presupposes basic consensus model I will briefly refer Commission’s initiative launch ‘European Pillar Rights’ since can contribute developing such Risk sharing basis – kind advocate contribution ‘reciprocity’ Reciprocity cement states; also inspire For instance apply principle reciprocity current debates cross-border mobility Politically arguments presented may seem uphill battle today However shy away from rational argument: order ‘take back control’ Europeans must be ready share risks domains 2 Introduction: tragic dilemma? Developing integrating were greatest political projects 20th century They raised hope: ‘free people fear need’ was put end history bloody wars Both now at standstill if deep trouble (EU) faces existential questions about ultimate goal There no questioning per se which protect against impression they capable realising talk succession crises has been confronted with nor discuss all challenges our Hence important issues covered during lecture zoom one particular question: case project odds each other? Are caught dilemma because objectives (integration openness by protection security states) longer compatible qua objectives? In community EU scholars pessimistic assessment new According Fritz Scharpf impossible conceived become market economy: consistently pushes towards liberal founders thought rather opposite: signatories Treaty Rome convinced development prosperous inclusive retrospect summarize optimistic belief follows: • Economic stimulate growth participating countries allow developed catch up: convergence machine could safely left where trade parties develop sufficient pressure redistribute benefits fairly agree pan-European standards Countries ahead economically socially hindered policy: affect internal cohesion 3 short founding fathers’ credo based two articles faith clearly distinguished: convergence-through-integration cohesion-in-convergence immediately add second article (cohesion-in-convergence) undisputed fifties there whether possible without harmonisation This question heart 1956 Ohlin report together Spaak prepared launching Community Bertil Ohlin4 believed differences wages related expenditures involved mainly productivity; hence have downward when allowing free added any divergence diminish states’ competitiveness common adverse corrected adapting exchange rates Thus describing insignificant caveat fathers followed suit large degree 5 History proven wrong least until halfway first decade 21st century: catching up went hand Over last however started show cracks predating 2008 crisis spinning inequality increasing several mature ‘cohesion-in-convergence’ applied crack or spectacular fissure emerged crisis: stopped north south tearing apart Since (a number of) particularly Eurozone table Union: unification mean policy? am merely asking abstracto: focus serving therefore illustrate how very ambitious still today’s enlarged highly unequal twin challenge slightly technical following section readers who don’t graphs tables skip move Unequal Figure 1a shows next individual US (Figure 1b) Henceforth simply call them ‘states’ grey diamonds represent black square middle both figures represents imaginary ‘representative state’ i e American residents’ income distribution correspond respectively average 6 horizontal axis median state’s residents relation vertical measure 7 being GINI coefficient thus comparing coefficients When diamond) situated right representative (the square) higher than Conversely diamond lower A above indication while below indicates dotted circle holds Sweden Denmark four countries: Austria Belgium Finland Netherlands these considerably richer (with 34 53 percent average) equal 9 17 Rumania Bulgaria well Latvia Lithuania Estonia Greece Portugal just 29 (Rumania) 72 (Portugal) 13 illustrates heterogeneous quite special 4 Source: Eurostat Bureau Census see endnote details 1b cannot compared unequally distributed diverse comes characterises country results every situation different If consider single high But combined result (moderate) most Moreover poorer often display ones even diversity comparison levels (as 1a) select rung ladder benchmark; Table compares incomes five relative 60% 70% 80% 90% 100% 110% 120% 130% 140% 0% 50% 150% 200% Inequality (GINI) % Median 1a: EU28 household across 1b: domestic those same bottom use someone top quintile his country; 20% fellow countrymen Rumanian citizen (i poor standards) currently 23 To compare relatively rich fourth citizens whose 32 corresponding average: ‘rich’ fares better opposite observation Denmark: ‘poor’ Dane displays similar comparisons third (neither terms) main ‘static’ emerging gap ladders observe change; dynamic perspective conveys positive negative news: Eastern Central managed 2006 rungs ladder; dramatically news occurred Greek Polish distribution! 1: Income (in Benchmark Average 27 Poland Germany 2013 Top Quintile 26% 32% 123% 133% 48% 138% 65% 24% 30% 132% 45% 67% 93% 62% 21% 28% 139% 145% 88% 58% 18% 23% 144% 152% 43% 136% 82% 53% Legend: standardized net disposable quintiles unweighted EU27 purchasing power parities (PPP) take into account price differentials Eurostat: SILC 2007 figures; 2014 explains why poverty line generates rate much rates; improved after 2004 8 Should traditionally unified closer numbers At sight confirm heterogeneity too beneficial progress inevitably decline others reality Tragic dilemmas repairable flaws? Welfare redistributive effort seems waver advanced used serve role withstood recent fact explanation cases yet other seen already before increase (which absolute poverty) diminished among pensioners considerable increased working age children played reduction diminished; households participation labour low widened so happens comparable information post-2004 period Survey Living Conditions (EU SILC) implemented enlargement tempting proof ‘tragic dilemma’ referred earlier: decreasing capacity perceived pay engine sure erode Ohlin’s optimism worked another party 28 sounds plausible backdrop data story? think Ohlin’s recipe adequate really First distinguish punctual lacunae regulation fundamental trends Lacunae ‘posting’ create (posting means works say employer Poland; posting allows exceptions viz-à-viz rules normally workers) needs reform; return issue my badly organized system flaw How Competitive minimum might lead assumption limits margin absence workers Minimum play pivotal organisation protection: constrains turn residual assistance Consequently whole edifice under ‘minimum wage competition’ While hypothesis group set (or affirmed) public authorities recorded Eurostat10 indeed shift relationship favourable minimum/average ratio trend whereas made efforts resulting happened UK suggests mounting jump conclusions: constitute component systems 15 years many governments amended tax-and-benefit improve jobs: British ‘in-work benefits’ well-known example A1 (see Appendix) importance low-wage instigated stronger keep high; purse somehow dispensed employers responsibility Now stop making efforts11 prevent sufficiently Whether policies pursued matter budgetary priorities Cantillon Marchal Luigjes evolution 2000s 1990s balance ‘favourable’ ‘unfavourable’ developments latter period) 12 That contra-indication idea continue jobs depends choices made) necessitate greater little potential Furthermore demographic changes unrelated competition (and Europeanisation) fight growing lone parents example: societies dual-career families norm suffice lift family threshold generous replacement: inadequate Governments tools imperative migration wave contributed EU15 migrants natives risk side effect ‘benefits tourism’ applies job We notice non-EU connection: perhaps EU-immigrants compete ’traditional’ non-western immigrants make difficult 14 Next direct impacts outcomes indirect impact via attitudes Brian Burgoon examined redistribution Poor heightens concern jeopardises states’ financial sustainability respect vicious present factors causal chain cut long story regard (not quality) provide though explanatory factors; drivers synthesis life-long research Anthony Atkinson emphasizes inequality16 varying experience capital markets analysis board technological employment relations codes conduct form taxes Increasing stem ‘iron laws’ talking stock Piketty focuses on) globalisation Europeanisation Each own pattern willing counter sociological generate words crux is: oppose forces do want that? relevant effective provided Mind respond laws nature removed chemistry physics objective mechanisms: world ideas plays decisive problem David Cameron’s ‘Brexit deal’ had everything wagers clear facts shock-absorber created drift apart: reverse gear grew origin definitely Let me aspect lack shock-absorbers built-in automatic stabilisers: progressive downturn smoothing shocks These stabilisers temporary deterioration budget hit hard switch off quickly reactions strict austerity agreed upon Council Analyses Commission spending initially complied stabilising expect changed phase discomforting known partially centralised implications drawing IMF economists 18 Furceri Zdzienicka (2013); note idiosyncratic ‘asymmetric’) affecting product government consumption bars indicate extent smoothed relate 1963-1990 period: 75 cent shocks’ (one ‘neutralized’ ‘absorbed’ cent) figure distinguishes three Shocks production revenue invested outside people’s home mechanism US: neutralized 39 consideration corresponds part (technically influence so-called ‘factor incomes’ depreciation simplify presentation) constitutes ‘insurance mechanism’ operating through private save conversely boom) absorbed Transnational credit international borrowing lending crucial respect: federal tax benefit programmes certain Washington reinsures tops schemes organised itself umbrella limited impact: absorbs read hatched -10% 10% 40% EMU 1979- 1998 1999- 2010 2: Smoothing Saving Net transfers Factor Total 10 What matters complementarity mechanisms explained organize insurance; nations (like Canada Germany) organizes funds supports help scheme complies requirements State incur deficit conditions borrow money And times severe provides ‘extended ‘emergency entirely financed budget; Obama administration 19 economy shock (except Italy US) 20 contradict members explaining difference prior thereafter eighties nineties later shape savings channel EU-level hardly Prior creation 45 Once saving dissaving receded; 26 authors gathered smooth systematically decreased Eurozone; ineffective downturns height southern closed responsible insuring banks contrast reinsured level) this: held ‘deadly embrace’ collapsed avoidable; repetition events absorb An integrated achieved run banking putting embrace’ priority Banking components needed: fully insurers Public catalyst guarantee fiscal stabilizers: sort complement 21 11 Why centralised? opt downright centralisation streamline reinsurance combine decentralisation behaviour reasons signalled pooling enhances resilience reason symmetric value se); refers ‘externalities’ National externality: properly insures helps neighbours You fire insurance: you hope your neighbour subscribes proper him unable damages place spread yours insurances car mandatory Vaccines archetypal externalities: vaccine individuals themselves infectious deceases get touch purely view efficiency subsidise vaccination compulsory elaborate analogy ‘compulsory vaccination’ then subsidisation contamination mere market; runs out-of-control 22 Therefore stabilisation built Which apply? From preventative prudence requirement: accumulate structural deficits reduces ability additional debt sufficient: stabilizing quality subject Do cover employees groups remain uninsured country)?23 enough creating inactivity traps? metaphoric camel’s nose: function good effects activation etc So programme entails cluster principles coherently comply Not coincidentally subsidised theory learns goods services externalities reach optimal although associate (granting subsidy high) qualities creates ‘vaccine’ volatility affordable) go Such device answer underpin politically easier obtain illusion small premium interstate look like? few proposals published linking 24 typically imply fund disburses affected g significant partner large-scale study led Centre Policy Studies (CEPS) topic; variants Unemployment Benefit Scheme 25 setting genuine complements underestimated exclude permanent favour avoid resources pure logic covering My conclusion meet implement takes ‘reinsurance’ Reinsurance flexibility offers scope mitigate institutional moral hazard (I below); complicated option here Instead going emphasize rationale approach trade-off (formal) sense simple: prevention cure Although came intergovernmental negotiations Solidarity ex ante rooted fabric post drawbacks Organising repeated ad-hoc burden conditionality easily conflict polarisation electorates Ex expensive certainly instability: swings driven expectations expectation doing preventing dimension ‘private mechanisms’ complementary ‘public International prone panics ‘sudden stops’ expected cushion serious probably argue argument doomed fiction Mutual distrust deeply proposal meets resistance dominant (Moral occurs actor actors costs consolidate weak casu ungenerous insurance) makes ‘complete’ fails level: well-developed incomplete Is complete Union? Admittedly difficult: stable relies simultaneous sensitive Everybody ‘cross street time’ done trust? Allow once list pieces classical prisoners’ solidary remedy imbalances position guarded know best handle adjustment spirit alas fair inconvenient truth collective action reducing formal upshot context mutually ‘insurance contract’ gain legitimacy enhance acceptability positions Fiscal simple transparent ‘flexibility’ governance accommodate catered Yet always intrusive touched previous let aim logical corollary reinforcing) quid pro quo organising generosity (notably short-term unemployed) coverage (short-term) parcel Trade movements welcome agenda us tread turf possibility ‘lax’ unemployed (re)employment obvious totally obsessed Moral unavoidable you’re eliminate faintest you’ll never able reap On dismissive hazard: address find solutions minimise reduced deviates historic (national) profile long-lasting High thresholds intervention intervenes (very deviations country’s profile) ‘claw back’ stipulate entitled collected reimbursed stringent regulations weaker essential establishing room powerful somewhat intention state; endeavour considering central provinces regions municipalities interesting Switzerland detailed implicit explicit politics wide range solutions: financing models control coordination Ever Employment Strategy launched 1997 ‘coordination’ Youth Guarantee closely connected assurance regarding ‘soft’ trigger give bite: legitimate Binding commitments leave leeway differentiation concrete policies: essence elaborated detail homogeneous agreement necessity past attempts ’the model’ useful project: ‘nice have’ indispensable Today finding 30 Well-known terms trade-offs Members currency area symmetry Symmetry output prices Flexibility relates interregional determine asymmetric Less necessitates flexibility: required adaptability traditional textbook ‘adaptability’ understood and/or textbooks: alleviate plight Obviously reversible require readiness organise requires engage requirements’ mentioned paragraph general including deliver sound finances Exposure produced ‘discipline’ finance contrary witnessed asymmetrical Relative deteriorated significantly huge invisible visible pursues increases institutions coordinate increases: container concept ‘high road’ placed opposition ‘low road highly-skilled versatile force training facilitate transitions deregulation easy hiring firing irrelevant adopted pillars sustainable functionally equivalent outcome attached types equally perform dimensions relegated domain counsel limit accommodated Whatever method neither neutral long-term implied pillar rights Can start consensus? March 2016 consultation 33 focusses adhere term ‘rights’ confusing 16 tool benchmarking policies; replace change indicates: “The reference framework screen performance Member drive reforms specifically compass renewed process ” areas grouped themes: opportunities access conditions; debate building needed high-risk repackaging strategies strategy Open Method Coordination Protection Inclusion momentum prevailing scepticism Union’s significance successful met concluded leaders partners highest firm commitment (Think ‘Fiscal Compact’: ‘Social Compact’ salience Second competent establish legal conditions) competences legislative curbed supported thorough incisive instruments surpasses processes Third linked ‘harder’ initiatives designing Eurozone: link analytically compelling bargaining Samuel Bowles defines ‘strong reciprocity’ “propensity cooperate similarly disposed personal cost ”35 goes beyond ‘enlightened self-interest’ ‘conditional’ Quid ruthless mantra neglects compassion contexts; obsession overlook guiding normative explain non-discrimination citizens: Belgian enter existence assistance: legislation impose immediate unconditional inactive (to example) enjoys Belgium: he principle? facilitates tangible ideal citizenship non-discriminatory circles justifies worker’s pays contributions sustains tolerate territory Competition exactly workers: worker ‘posted’ remains foundational fortiori wants problems inspection ask reform Commissioner Marianne Thyssen rejected Denmark) moment stalemate ground search compromise? believe Cameron’s negotiating deal Brexit posted; wanted derogation motivated government’s paid Cameron attracts over expense taxpayer Other employers’ convincing discussion illustrated Brits As said arise facts; perceptions determining obtained voted divisive EU? New limitations (since regime them); simultaneously relapse citizens) justification fundamentally interests Dutch campaign considers excessive uncontrolled freedom realm urges Simultaneously opposition) voiced sympathy parts 36 Just contradictory rationales attracted rationales) short- interest interest? negotiation way: “We discriminate Netherlands: assure please understand undermined excesses application ” again representatives strike non-discrimination) uncontrollable proliferate thrive ultimately settle equilibrium lose whilst leaving concerns essentially did prove mid-2000s protracted reconsider flourishing states? spectrum despite conflicting views exact mix inspired position: yes isolated longer-term restoring strictly confining coherent conception ‘European Union’ notion deliberately invites propose clear-cut vague ‘a Europe’ surfaces discussions conventional dimension’ assert mobile health safety workplace directives workers’ non-trivial acquis fifty piecemeal solid foundation enforcing premised denial steps build stage ‘adding emphasis coincidence State: historical legacies entities primary purpose interpersonal borders; logics investment lecture)37 rethink practical subsidiarity ‘union More generally practice top-down one-size-fits-all policy-making 38 core summarised guide substantive ways operational definition ‘the Model’ expression focused given examples Think defining corporate taxation enable maintain balanced highlights ‘example followed’ unchartered territory: entire ‘union supposed puzzle: everyone’s happen increasingly losing situation? debate: synonymous ‘losing control’ Appendix: households’ couple income: influenced receive childless CSB MIPI Databank Version 3/2013; Van Mechelen et al (2011) 0 5000 10000 15000 20000 25000 30000 35000 40000 45000 LU IE AT FI DE FR NL DK BE IT SI EL CZ ES SK EE PL HU LT PT LV RO BG A1: with/without living with2 kids Gross salary (wage) References Anderson K M (2015) Palgrave Macmillan Allard C J Bluedorn F Bornhorst D ‘Lessons minimal elements euro area’ Cottarelli Guerguil (eds) Designing Lessons federations Abingdon: Routledge B Be Done? Oxford: Oxford Press Beblavy G Marconi Maselli CEPS Special Report No 119 S Fong H Gintis Jayadev U Pagano (2012) Economics Redistribution Cambridge: Cambridge (2013) Political Economy Re-embedding Liberalism Inaugural Address Amsterdam June (2014) ‘Immigration Integration Support World Politics 66 p 365-405 (2016) Decent Poor: Role Europe? Improve Final Conference Paper Antwerpen February Working 15/20 Herman Deleeck Antwerp Reconciling Work Poverty Reduction Successful States? Dolls Fuest Peichl ‘Automatic Stabilizers Crisis: vs Journal 96(3-4) 279-294 Developments 2015 Brussels: Esser T Ferrarini Nelson Palme O Sjöberg Benefits DG Affairs Zdziencicka Euro Area Need Supranational Sharing Mechanism ? 13/198 Gill Raiser Golden Restoring Lustre Model Washington: Bank Goedemé Collado ‘The Convergence Machine EU’s Poorest Citizens?’ Common Market 1-17 Labour Organization (1956) Aspects Co-operation Group Experts’ (summary) Review 74 (2) 99-123 Completing Europe’s Jean-Claude Juncker close cooperation Donald Tusk Jeroen Dijsselbloem Mario Draghi Martin Schulz Leibfried Left Judges Markets?’ Wallace Pollack Young (red Policy-Making 7th edition 263-292 Oksanen Asymmetric Area: Simple Proposal Dealing Mistrust CESifo 5817 Rhodes ‘Employment Between Efficacy Experimentation’ 293-318 Salverda W Nolan Checchi Marx McKnight Toth Werfhorst Changing Inequalities Rich Analytical Comparative Perspectives (2009) Asymmetry KFG 1-35 Berlin: Kolleg-Forschergruppe Transformative Power SEO Grensoverschrijdend Aanbod Personeel: Verschuivingen Nationaliteit Contractvormen op Nederlandse Arbeidsmarkt 2001-2011 Onderzoek opdracht het Ministerie Sociale Zaken Werkgelegenheid Amsterdam: Economisch Strauss R APPAM Inequalities: Addressing Growing Challenge Policymakers Worldwide London 13-14 Teulings ’De Toekomst Europa: Een essay schuld moraal solidariteit’ Management Organisatie 5(6) 33-38 N CSB-Minimum Indicators dataset (CSB-MIPI) Series WP 11/05 Antwerp: Vinck ‘Child Wallonia Flanders: Accounting worrying performance’ Belgisch Tijdschrift Zekerheid 57(1) 51-98 Rinaldi inequalities cohesion’ Vision Summit Consortium ): Redesigning Ways forward Gütersloh (http://www vision-europe-summit eu/) 38-77 (2016a) Sticking yield everybody Tribune Notre Institut Jacques Delors juni (via http://www delorsinstitute eu/011-23040-Social-benefits-and-cross-border-mobility html) (2016b) Automatic stabilizers September institutdelors eu/media/stabiliserssocialeurope-vandenbroucke-jdi-sept16 pdf?pdf=ok) (2016c) ‘Comparative Analysis Brink Era’ Analysis: Research Practice 1–13 Europe: Defining union’s luxury Ose Opinion N° 1-39 pp Brussels (Belgium): 2012 (www ose be/EN) Case Muddling Through Sense Purpose’ Marin(red Global Ashgate: Aldershot 489-520 Vanhercke Ten Tough Nuts Crack Background Friends High-Level Institutional multi-tiered summary eight studies inaugural full professor short-cuts updates See ‘social ‘convergence machine’ recipient Sveriges Riksbank Prize Sciences Memory Alfred Nobel Swedish politician leader Heckscher-Ohlin theorem Organisation (ILO 1956) write ’to degree’ 1980s overview (member) taking size (Eurostat); underlying render available standardised composition; amounts rendered parities; except Ireland dollars comprehensive versus examine convergence-cohesion rough statement 1999-2008 configuration suited modifications; EU-integration entail concerning (2014); broader (2015); III pages 276-278 Based series: column IV (numbers borrowed Asdrubali) columns (II) (III) sophisticated (2015 239) (2014 34) Bablevy suggestions bibliography found http://ec europa eu/social/main jsp?catId=738&langId=en&pubId=7959 ‘re-insurance’ De Grauwe plead Eurobonds diverging surpluses initiate corrective actions accountable reflection Union’ Arguing necessary mark departure Six-Pack Macroeconomic Imbalance Procedure deliberate strengthen makers one-sided addressed instead around benchmark ‘golden rule’ productivity golden rule moderation (Vandenbroucke 2015) congenial pension Commission’s deepening further Five Presidents Institutions completing comparative analysis; 35 government) concerned exportability child nuanced in-work non-UK driver 37 Subsidiarity wrongly considered direction; macroeconomic supra-national justify rethinking