Transcript Presentation

Centre for Labour Market Research,
Aalborg University, Denmark (CARMA)
"Reforming Danish ALMP - an
assessment from a flexicurity
perspective"
Per Kongshøj Madsen
Centre for Labour Market Research (CARMA)
Aalborg University, Denmark
www.carma.aau.dk
OECD Employment, Labour and Social Affairs Seminar
March 3, 2014
Per Kongshøj Madsen
• Professor at CARMA, Aalborg University and
Research Fellow at IZA
• Chairman of the Economic Council of the Labour
Movement
• Member of the Koch-Commission
What’s to come
• The background: Danish
flexicurity and the crisis
• The criticism of ALMP
• The tasks of the expert group
• Proposals for reform
• What are the next steps?
The Danish version of flexicurity
The social contract
Unemployment
ínsurance
Flexible
labour
market
Low EPL
High mobility
Adaption to
globalization
Support from
welfare state
institutions
Educational
policy and
more!
ALMP
Employment security
Income security
Danish flexicurity – against the wind
• The overall development on the labour market:
– Steep decline in employment in 2008-2009
– Then stagnation in employment and unemployment
– A remarkable decline in the workforce
• The reactions to the crisis (figure 8)
• The stress on Danish flexicurity ”classic” (figure
9)
• Still shelter from the storm!
• Demolition of Danish flexicurity or gradual
reforms?
Stylized facts
Decline i GDP
Elasticity of
employment
with respect to
GDP
Flexicurity under stress?
Can the social
partners keep the
balance?
Unemployment
ínsurance
Call for more job
security
Flexible
labour
market
Fewer public
resources)
Educational
policy and
more!
ALMP
Under pressure from the crisis
Less generosity
LTU in the EU
Slovakia
Greece
Ireland
Italy
Estonia
Lithuania
Portugal
Slovenia
Latvia
Germany
Hungary
EU-27
Spain
Czech Republic
Belgium
France
Poland
United Kingdom
Netherlands
Denmark
Austria
Finland
Norway
Sweden
Unemployed for
more than 12
months as a share
of total
unemployment:
Source: Eurostat
0.0
10.0
20.0
30.0
40.0
Percent
2012Q3
2008Q3
50.0
60.0
70.0
80.0
Source:
Eurobarometer:
Monitoring the
social impact of
the crisis Wave
6, Flash EB No.
338, April 2012.
Falling apart or minor cracks in the
building?
Per Kongshøj Madsen (2013): “Shelter from the storm?” - Danish flexicurity and
the crisis in: IZA Journal of European Labor Studies, Vol. 2, No. 6,
What’s to come
• The background: Danish
flexicurity and the crisis
• The criticism of ALMP
• The tasks of the expert group
• Proposals for reform
• What are the next steps?
The calls for reform
• Inefficient and ”meaningsless” activation
• Disappointing results from many evaluations of
effects and costs of ALMP, especially of
”education”
The calls for reform
• Too much control
– Of the unemployed by the jobcentres
– Of the work of the job-centres by the national
authorities
• Dissatisfaction with the functioning of the jobcentres:
– Too small to fit with the regional labour markets
– Too small to care for groups with special needs (e.g.
academics)
– The governance system (lack of cooperation
between the jobcentres, the weaker role of regions,
the regional boards and the social partners)
The calls for reform
• Overlapping activities of the jobcentres and the
UI-funds.
• Not sufficient contact between the jobcentres
and the employers
• Dissatisfaction with the IT-platforms of the
jobcentres
• The shortening of the duration of unemployment
benefits from four to two years from January 1,
2013, makes it more urgent to make an
effective effort to get the unemployed back to
work.
The tasks of the Koch-commitee
• To make proposals for reforms that:
– Lead to lasting employment for the unemployed
– Implies an upgrading of qualifications if relevant
– Are based on more on confidence and less on control
with the unemployed (empowerment)
– Strengthen the link between the job-centres and the
employers
– Make the instruments used more cost-effective that at
present
– Do not imply extra costs for the public budgets
• A tripartite process
The proposals: Five pillars
• New, individual and job-focused effort for the
individual unemployed
• Targeted training and education of unemployed
• Enhanced focus on the needs of businesses
• Stronger economic incentives for the jobcentres and less bureaucracy and process
requirements
• New regional organization and stronger
stakeholder involvement
Pillar A: Individual support
• Assistance already in the dismissal phase
• Job search phase with frequent counseling in the first
six months
• Activation after 6 months with job-training measures for
the unemployed over 30 years (after 3 months for
young unemployed under 30 years of age)
• Elimination of repeated mandatory activation
• Initial profiling and stricter requirements to support to
high-risk groups
• Low risk-groups may choose to complete the first six
months of counseling in the unemployment insurance
funds
Pillar A: More individual support
• Booking of interviews and job search support activities
in the first six months
• Training of managers and employees in UI-funds and
job centres in counselling
• Requirement for ongoing documentation of intensive,
comprehensive and realistic search in a Job Log
• New possibilities of sanctioning for lack of job-search
• Harmonisation of public and private sector wage
subsidies
Pillar B: Education
• Upgrading of skills should be targeted at motivated
unemployed
• Right to training for unemployed with a job-offer
• Right to basic courses in literacy, numeracy and writing
• Right to 6 weeks of training after 6 months of
unemployment, in agreement with the job center
• Right to education for unskilled unemployed over 30
years with reduced benefit and a credit facility
• No need to be available for work, if taking part in
education
Pillar C: Contact with employers
• Systematic contact from job centers to employers
based on knowledge of the labor market
• Better means of job centers to facilitate recruitment of
manpower and skills-upgrading of existing employees
• Strengthened cooperation across municipalities
• Establish fewer entry-points for large companies with
recruitment needs
• Monitoring of current and future infrastructure projects
and other major construction projects
Pillar D: Economic framework
• Reduction of process requirements for
jobcentres
• A reformed system of economic incentives for
municipalities (the same reimbursement for all
activities and reduces reimbursement over time
for the individual unemployed)
Pillar E: A new regional structure
• The current 94 local employment councils and 4
regional employment regions should be reorganized
into 8-12 new regional councils, which better reflects
the regional labour markets
• The new councils will support cooperation between
municipalities, between municipalities and
unemployment funds, as well as between job centers,
educational institutions and the regional growth fora.
• The new councils will have representatives from social
partners and other stakeholders
• The new councils will administer funds for education
and training
Still hard work ahead!
Carsten Koch
Michael Rosholm,
Aarhus University
Vibeke Jensen
Aarhus Municipality
Per Kongshøj Madsen
Aalborg University
Next steps
• Draft report dealing with reform of ALMP the
insured unemployed ready for comment from
social partners: January 2014
• Report presented to the Government:
February 25, 2014
• New report on the non-insured unemployed
and other groups at the margin of the labour
market to be prepared during 2014
• Prepare mandate for a new commission
dealing with the UI-system 2014-2015
Thank you for your attention
Towards a
brighther
future!