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Purpose – Since the mid-1980s, unemployment policy reforms in Europe and throughout the rich democracies have stressed publicly supported activation of the unemployed…
Purpose – Since the mid-1980s, unemployment policy reforms in Europe and throughout the rich democracies have stressed publicly supported activation of the unemployed through both reductions in perceived disincentives to work as well as commitments for improved training, employment services, and related policies. In this chapter, I systematically explore the domestic and international political economic sources of these policy changes.
Methodology/approach – I test a set of hypotheses – original and derivative – about the domestic and international determinants of labor market policy change through pooled time-series cross-section analysis of 1980-to-2002 annual data from 18 capitalist democracies. The dependent variables consist of national spending on active labor market policy, measures of passive unemployment compensation benefits, and the ratio of active to passive unemployment program spending. Causal models account for spatial diffusion of policy reforms as well as core political and economic determinants of policy change.
Findings – I find that Left party governments and coordinated market institutions buoy resources for active labor market programs, maintain relatively generous passive unemployment supports and entitlements, and, at the same time, foster a shift to more active social policy. International trade openness promotes generous active labor market policies while more left-leaning voters and veto points within the polity significantly constrain reductions in unemployment benefits and entitlement rights. De-industrialization reinforces policy reforms toward activation while high unemployment rates engender cuts in passive unemployment benefits and eligibility conditions.
Originality/value – Overall, the chapter demonstrates that the economic effects on policy change notwithstanding, politics fundamentally matters: domestic political dynamics and variations in institutions explain the preponderance of the change (or lack thereof) in unemployment policy.
Economic theory predicts that unemployment benefits may increase expected income and reduce its volatility, thereby attracting immigrants to countries which implement such…
Economic theory predicts that unemployment benefits may increase expected income and reduce its volatility, thereby attracting immigrants to countries which implement such programs. This article aims to explore whether and how changes in countries’ unemployment benefit spending (UBS) affect immigration.
Data are collected for 19 European countries over the period 1993‐2008. The relationship between immigration flows and UBS is first tested using the OLS technique. Instrumental variable (IV) and generalised method of moments (GMM) are then used to address reverse causality.
While the OLS estimates suggest the existence of a moderate within‐country welfare magnet effect for the inflows of non‐EU immigrants, the IV approach reveals that the impact is substantially smaller and statistically insignificant when GMM techniques are implemented.
Since information on the immigrants’ country of origin is not available, it is not possible to exclude that for immigrants coming from certain areas, unemployment benefits constitute a strong incentive to immigrate. This hypothesis awaits further research, once detailed data is available.
This paper complements previous literature on immigration and welfare by exploring the endogenous nature of welfare spending. The empirical results provide insights into the interaction between immigration and welfare policies.
Purpose – In this chapter, we examine individual- and country-level differences in perceived job insecurity in the 27 European Union countries (EU27) within a multilevel…
Purpose – In this chapter, we examine individual- and country-level differences in perceived job insecurity in the 27 European Union countries (EU27) within a multilevel framework.
Design/methodology/approach – We primarily focus on cross-national differences in perceived job insecurity in the EU27 and consider several possible explanations of it, including flexible employment practices, economic conditions, labor market structure, and political institutions. We examine both individual- and country-level determinants using multilevel partial proportional odds models based on individual-level data from the 2006 Eurobarometer 65.3 and country-level data from a variety of sources.
Findings – We find that European workers feel most insecure in countries with high unemployment, low union density, low levels of part-time and temporary employment, relatively little social spending on unemployment benefits, and in post-socialist countries.
Research limitations/implications – The findings from this study suggest that flexible employment practices do not necessarily cause workers to feel insecure in their jobs. This is likely due to the different nature of part-time and temporary employment in different institutional contexts.
Originality/value – This study is one of the most comprehensive accounts of perceived job insecurity in Europe given the focus on a larger number of countries and macro-level explanations for perceived job insecurity.
Over the last few decades, precarious work rose as an important feature of socioeconomic insecurity in contemporary Europe. The following study asks: How do labor market…
Over the last few decades, precarious work rose as an important feature of socioeconomic insecurity in contemporary Europe. The following study asks: How do labor market institutions and labor market conditions shape work precarity in Europe? This research captures the elusive concept of precarious work by measuring the degree to which a job (1) is insecure and uncertain, (2) offers poor prospects of career mobility, and (3) puts workers in an economically insecure position with low pay. Building on two theoretical paradigms, the Varieties of Capitalism and the Power Resource Theory, this study derives and tests hypotheses about how macro-level factors shape the variation in the distribution of precarious work in 32 European countries. Combining individual-level data from the 2010 European Working Conditions Survey with country-level data from multiple sources, my findings suggest that work precarity decreases in countries with high percentages of employees in all enterprises receiving continual training, high percentages of all enterprises providing on-the-job training for employees, and high levels of spending on active labor market policies.
The purpose of this paper is to attempt to look at the link between labor market risks and social insurance demands by taking occupational unemployment rates, and…
The purpose of this paper is to attempt to look at the link between labor market risks and social insurance demands by taking occupational unemployment rates, and specificity of skills into account.
Occupational unemployment rate is treated as an estimate of labor market risk in addition to human capital investment. Then, the variations in Germany and the USA – with diverse labor markets and a considerable difference in terms of social insurance support – are examined.
The results suggest that occupational unemployment rate is explanatory for the demands for social insurance along with income.
Conclusions reached in the paper aim to contribute to the understanding of the political support for social insurance and hence provide tools for the design of such insurance mechanisms.
Contrary to the widespread association between the type of human capital and social insurance preferences in the literature, the paper argues that the cross‐country variations can be explained by occupational unemployment rates.
This chapter examines the evolution of the number of days spent on sick leave following the 2011 reform which halved the maximum sick benefit provided by statutory health…
This chapter examines the evolution of the number of days spent on sick leave following the 2011 reform which halved the maximum sick benefit provided by statutory health insurance in Hungary. This policy change sharply decreased benefits for a large group of high earners, while leaving the incentive to claim sickness benefits unchanged for lower earners, providing us with a “quasi-experimental” setup to identify the incentives effect of sickness benefits. We use a difference-in-differences type methodology to evaluate the short-term effect of the reform. We rely on high-quality administrative data and analyze a sample comprised of prime-age male employees with high earnings and stable employment. Our results show that the number of days spent on sick leave fell substantially for those experiencing the full halving of benefits. Estimating the response of the number of sick days with respect to the fall in potential sickness benefits, we find a significant elasticity of −0.45.
Purpose – European social protection arrangements have undergone significant transformations since the mid-1970s. However, while the existing literature has focused on…
Purpose – European social protection arrangements have undergone significant transformations since the mid-1970s. However, while the existing literature has focused on reforms in public welfare arrangements, an analysis of both public and private social protection is needed to understand the social protection status of European workers. Recent reforms have led to varying degrees of social protection dualism between insiders and outsiders. After showing the existence of dualization processes in Germany, France, and the United Kingdom, the chapter explores the structural and political sources of these processes.
Methodology/approach – We conduct a comparative historical analysis and process tracing of policy change and its drivers in three major European political economies. A combination of qualitative evidence and quantitative measurements are used.
Findings – We find that de-industrialization has contributed to unsettling the skill composition that sustained both public and private postwar social protection arrangements. This development has affected the preferences of employers, for whom cost containment has become a critical issue. Furthermore, we show that the capacity of employers to realize their preferences depends on the governance structures of social policy arrangements and on domestic political institutions.
Originality/value – The chapter suggests new perspectives on employers' preferences in Coordinated and Liberal political economies which differ from those which have informed the Varieties of Capitalism approach.
Norway is a small nation state on the northernmost coastline of Western Europe, integrated in the Western world economy. For centuries Norway's integration in the world…
Norway is a small nation state on the northernmost coastline of Western Europe, integrated in the Western world economy. For centuries Norway's integration in the world economy had been based on exports of raw materials such as fish and timber, as well as shipping services. In the early 20th century, furnace-based metals (made possible by cheap hydropower) were added to this export basket. Just as the world economy entered an increasingly unstable phase in 1970s, another natural resource was discovered in Norway: petroleum – that is, oil and natural gas from the North Sea. This chapter analyses the challenges and possibilities inherent in the Norwegian strategy of developing an oil economy in a world economic situation influenced by new and stronger forms of international integration through the four decades between 1970 and 2010.
Soon after the Lehman crisis, the International Monetary Fund (IMF) surprised its critics with a reconsideration of its research and advice on fiscal policy. The paper…
Soon after the Lehman crisis, the International Monetary Fund (IMF) surprised its critics with a reconsideration of its research and advice on fiscal policy. The paper traces the influence that the Fund’s senior management and research elite has had on the recalibration of the IMF’s doctrine on fiscal policy. The findings suggest that overall there has been some selective incorporation of unorthodox ideas in the Fund’s fiscal doctrine, while the strong thesis that austerity has expansionary effects has been rejected. Indeed, the Fund’s new orthodoxy is concerned with the recessionary effects of fiscal consolidation and, more recently, endorses calls for a more progressive adjustment of the costs of fiscal sustainability. These changes notwithstanding, the IMF’s adaptive incremental transformation on fiscal policy issues falls short of a paradigm shift and is best conceived of as an important recalibration of the precrisis status quo.
A comparative study of trade union finances, in particular those of SOGAT and the NGA, shows that these two printing unions face severe financial problems, although this…
A comparative study of trade union finances, in particular those of SOGAT and the NGA, shows that these two printing unions face severe financial problems, although this is caused, in part, by their high levels of expenditure compared with other unions. Subscriptions are also much higher than for the average of all trade unions. Doubts are expressed as to whether the membership will continue to support their unions to such an extent.