Welfare Regimes and the Experience of Unemployment in Europe

Citation

Maani, S.A. (2001), "Welfare Regimes and the Experience of Unemployment in Europe", International Journal of Social Economics, Vol. 28 No. 8, pp. 681-686. https://doi.org/10.1108/ijse.2001.28.8.681.1

This book is an edited volume of large‐scale original research on the experience of the unemployed across European countries. The volume, which consists of three parts: “Unemployment and poverty”; “Unemployment and labour market marginalization”; and “Unemployment and social integration” addresses a number of pertinent questions concerning the economic and social experience of the unemployed across welfare regimes. The volume, in 17 chapters, brings together the results of research papers by 26 contributing authors from major European universities and research centres, based on a large‐scale research project, spanning eight European countries (Denmark, France, Germany, Ireland, Italy, The Netherlands, Sweden, and the UK), and three years in duration. The research is empirical, and several chapters make use ofcomparable individual‐level data, in particular, Eurostat’s “European Community Household Panel” (ECHP). In some chapters data from a greater number or a subset of the above eight countries are utilized. The approach is mostly sociological, but it also includes economic analyses. The volume is well polished and the chapters have the quality of refereed journal articles.

Although some chapters in the volume are expected to be of greater interest to different readers, the volume brings together a useful set of research papers, which together help in presenting a picture of the effect of different welfare regimes across countries on the experience of unemployment.

Two of the most interesting chapters of the volume are the introductory and the concluding chapters (Chapters 1 and 17) by the editors. In these chapters the editors motivate the book and introduce the debate about the appropriate welfare regime in the wake of higher unemployment rates in the 1990s in Europe. They also make a heroic effort in bringing together the wide range of research papers in the chapters included in the volume, and they generally succeed in doing so. These two chapters, in addition to Part I of the book, are expected to be of interest to a wider audience, including economists, sociologists and policy makers.

In Chapter 1 four unemployment welfare regimes of “universalistic”, “employment centred”, “liberal/minimal”, and “sub‐protective” are considered. These four systems are based on a country’s philosophy of the eligibility for, and generosity of, the protection of the unemployed; the classification relates to answers to such broad welfare philosophy questions as: “who should receive social protection?”, “To what extent income protection should be covered through public funds, as opposed to the family of the unemployed or earlier contributions based on previous employment?”, and “the generosity of income protection (e.g. in relation to the income of the employed, and/or as a percentage of GDP)”. While no country exactly corresponds to a pure system, Denmark and Sweden are identified as closest to “universalistic”, The Netherlands, Germany and France as closer to “employment centred”, the UK and Ireland to “liberal/minimal”, and Italy to a “sub‐protective” regime. Although somewhat subjective in nature, the use of the four regimes provides a useful, if otherwise absent, framework for the comparative analyses in the book.

On a separate dimension, the role of cultural and family structures of societies – in relation to the extent of the shared responsibility for providing for the unemployed between the public authorities and the family – is highlighted. On this dimension, Italy and Greece are, for example, ranked as highest in relation to family responsibility, and the UK and Denmark are ranked as lowest, reflecting their culturally greater emphasis on youths’ financial and social independence. The authors hypothesize that measures of poverty and deprivation are determined by the interaction of the state welfare system and family responsibilities. Based on the welfare regime alone, they expect that deprivation may be greatest where the welfare regime is “liberal/minimal”, or “sub‐protective” due to less coverage, a hypothesis that is supported by the papers in the volume. The results, however, further show that it is the combination of the welfare regime and the family support systems that determines the poverty, deprivation, social integration and the well‐being of the unemployed.

The three parts of the volume cover research on different aspects of unemployment. Part I: “Unemployment and poverty” (Chapters 2‐5) is an important part of the volume in providing extensive analyses and comparable evidence on the economic conditions of the unemployed across the countries studied. These include comparative measures of “relative depravation” – often measured as the proportion of the unemployed population with income levels below 50 percent of the average income levels, and Gini coefficients – through the 1980s and the 1990s. Chapter 2 shows that in certain countries, such as the UK and Italy, income inequality increased over the decade of the 1980s to the 1990s (especially for the unemployed), while it decreased in France and most notably in Ireland. Chapter 3 shows that in the countries studied, the unemployed had “material deprivation scores” which were closer to the scores for the “poor” as opposed to the “non‐poor” population. Chapter 5 addresses the effect of the government transfer packages on the experience of poverty by the unemployed. An important conclusion of this chapter and Part I is that the welfare regime of a country is influential in affecting the poverty experience of the unemployed. Denmark – with a “universalistic” and generous regime – consistently showed the least evidence of poverty by the unemployed, and differences in the manner in which governments operate within their welfare regimes (e.g. the “employment centred” regimes by The Netherlands or France) was important in explaining differences in the experiences of the unemployed in those countries.

Part II: “Unemployment and labour market marginalization” (Chapters 6‐11) includes six studies on the labour market experience of the unemployed. These include analyses of attitudes (attachment) to work (by the unemployed and by gender), the experience and potential scarring effects of labour market entry in high unemployment (especially for youth), hazard function analyses of exit from unemployment in four countries, lone mother’s poverty and employment, social capital and exit from unemployment, and a comparative study of exiting unemployment in Britain and Italy. Chapter 10 highlights the role of parents’ socio‐economic status in creating social capital resources – family and social contacts – as utilized for finding a job. A conclusion of Chapter 10 is that the weaker the role of the state in allocating people to jobs, the more important personal social capital becomes in finding a job.

Part III: “Unemployment and social integration” (Chapters 12‐17) is concerned with the issue of social integration. The papers in these chapters examine how far unemployment is associated with social isolation and whether this varies between countries. Chapter 13 examines whether couples are more likely to be unemployed at the same time (due to their education and skill levels, but also to welfare systems that discourage work by the partner of an unemployed person). Chapter 14 examines the link between unemployment and measures of personal satisfaction. Other chapters in Part III study the influence of welfare regimes on the experience of unemployment by males and females, and public attitudes (stigma) to unemployment.

The Conclusions in Chapter 17 highlight the vital role of institutional and cultural differences and their implications; differences between welfare regimes matter for the experience of unemployment; while welfare policies affect in an important way the pervasiveness of poverty, it is above all the patterns of family structure, and the culture of sociability, that determine vulnerability to social isolation. They conclude that the risk of cumulative disadvantage was greatest in countries where the respective normative responsibilities of the public and of the family were least clearly defined, or where both support structures had become weak. It was in those societies that they find there was the highest risk that unemployed people would simultaneously confront both poverty and social isolation.

Overall, the book addresses an important issue in an effective way. It further provides recent and comparable analyses based on conventional empirical research, filling a gap in this literature. Among the several positive aspects of the volume is the use of comparable individual‐level data across countries – a feature that is important for meaningful cross‐country comparisons.

While the cross‐section approach taken throughout the volume, and the emphasis on the experience of unemployment from the point of view of the unemployed, are quite appropriate given the objectives and the comparative nature of the studies, two useful related areas for future research pose themselves in relation to the questions addressed in the volume. One is the use of the “panel” features of comparable data sets, which in some cases would be more effective in addressing the questions in some chapters. The second area of interest for research and policy relating to the effectiveness of welfare regimes is the consideration of the financing and the cost side of the alternative welfare regimes in relation to their outcomes.

In general, the volume provides a valuable addition to the literature and is expected to be welcomed in providing comparative analysis of the experience of the unemployed across European welfare regimes.