Passive Labour Market Policies Research Articles

The Interactions between Labour Market Policies and Income Inequalities in Groups of European Union Countries

Social cohesion and a sustainable labour market remain the aims of sustainable development policy. However, income inequalities and labour market policies are more often separately analysed. To fill the identified research gap, our article presents the results of an analysis of interactions between active and passive labour market policies and income inequalities in the European Union. The 27 countries were divided into two clusters based on their active and passive labour market policy (LMP) expenditures in 2019. These clusters sustain the basis for analysing the interactions between LMP and income inequalities in its different measures. The results reveal that labour market interventions interact with income inequalities, decreasing disposable income inequalities (equalising the disposable income after transfers and taxes) and therefore contributing to social cohesion. This paper concerns social cohesion as the manifestation of intragenerational justice.

Quantity over quality? How economic factors and welfare state interventions affected job insecurity and job quality before, during and after the economic crises

AbstractThis article uses multilevel analysis of 24 European countries to examine the effects of macroeconomic variables (GDP and unemployment) and welfare state interventions (active and passive labour market policies) on job insecurity and job quality in Europe from the mid‐1990s until the last 2021 COVID crisis. The paper makes a distinction between the crisis of the welfare state and the reaction of welfare states to crises and connects the job quality literature with that on the transformation of the welfare state. The article introduces several innovations to the literature by looking at the impact of welfare state interventions on multidimensional job quality, distinguishing between different types of active labour market policy spending and considering the generosity of benefits. The findings show that active labour market policies (ALMPs) and passive labour market policies (PLMPs) have a positive effect in reducing job insecurity across skill groups. ALMPs and PLMPs also improved several dimensions of job quality, but mostly among manual/low‐skilled workers, while they have a negative effect on work pressure which mostly affects medium‐ and high‐skilled workers. The article concludes by discussing how, due to the reach of ALMP and PLMP interventions, the positive effects of the welfare state on job quality are concentrated among lower‐skilled workers, thereby limiting the ambition of contemporary welfare states to generate positive spillover effects on the quality of work for all workers.

사회안전망이 혁신저항에 미치는 영향에 관한 연구

The purpose of this study is to analyze whether the social security system can alleviate the resistance of workers in existing industries in a situation where resistance is increasing as technological innovation occurs in all industries. In particular, we will focus on looking at labor market policies such as retirement income security systems such as ‘pensions’ and ‘unemployment benefits and vocational training’ that are directly related to the lives of workers in existing industries that have declined due to technological innovation and new growth industries. For the analysis, 17 major industrially advanced OECD countries were set as the analysis target, and the analysis period was set from 2000 to 2021, when globalization, digitalization, and resistance to technological innovation resulting from the Fourth Industrial Revolution began in earnest, and panel data was constructed. did. As an analysis method, in addition to the existing panel regression analysis, fuzzy set analysis was performed to complement the limitations of regression analysis. As a result of the regression analysis, it was found that passive labor market policies centered on unemployment benefits alleviated resistance. As a result of the fuzzy set combined factor analysis, it was revealed that a high level of active labor market policy is still needed, and that a passive labor market policy with a short period but strong guarantees and a flexible labor market environment are needed.

The social policy preferences of EU employers’ organizations: An exploratory analysis

Despite decades of European social dialogue, little is known about the social policy preferences of EU employers’ organizations (EEOs). Building on the literature on industrial relations and the role of business in welfare state development, this article explores the preferences of key EEOs (BusinessEurope, SGI Europe and SMEunited) in vocational education and training (VET), active and passive labour market policies, pensions and work–family reconciliation. Software-based qualitative content analysis of 75 position papers and 19 joint declarations, triangulated with four elite semi-structured interviews, is employed to assess employers’ preferences along four national and two European dimensions. Largely in line with the power resources theory, EEOs favour cost containment and social investment, by strengthening labour market flexicurity and reducing skills mismatches through VET. Conflicting logics of membership and influence guide the actions of EEOs: members are wary of legislation impinging on national social policy traditions; yet, greater European assertiveness makes lobbying efforts unavoidable.

Active and passive labour-market policies: the outlook from the Beveridge curve

ABSTRACT Following a panel ARDL approach, we appraise the impact of various indicators of active and passive labour-market policies within the framework of the Beveridge curve across fourteen OECD countries from 1985 to 2013, controlling for other factors, both institutional (tax wedge) and structural (technological progress, globalization). We embed the role of these variables within the specification of the Beveridge curve, finding that the generosity of unemployment benefits has a detrimental impact on labour-market matching, with the duration of benefits and the strictness of the rules pertaining to the deployment of benefits taking a key role in driving this result. Among active labour-market policies, employment incentives and especially training have a favourable effect on matching. There is evidence of a virtuous interaction between active and passive policies. A significantly detrimental role emerges for the tax wedge. These results are consistent across various specifications, and structural relationships are stable throughout the 2008–2013 period.

Security or autonomy? A comparative analysis of work values and labor market policies in different European welfare states

AbstractThis paper analyzes whether and how work values differ between European Welfare states and change over time. We proceed in three steps: First, we show that—despite EU harmonization endeavors, for example, via the Europe 2020 strategy—work values still vary substantially between European countries and welfare regimes. Second, by analyzing data from the European Social Survey 2004 and 2010, we show how labor market policies, such as active and passive labor market policies, are associated with work values and how overall levels of work values changed over this period. Third, we discuss potential implications of the heterogeneity of work values for national as well as European labor market policy making. Altogether we are able to show that work values are substantially driven by the economic structure of a country and its labor market policy making. Key Practitioner Message Work values vary substantially between European countries and welfare regimes. The change of work values is substantially driven by welfare state structures (both labor market policies implemented and industry share). Both European and national labor market policy making has to account for these different work values to be successful.

Better together: Active and passive labor market policies in developed and developing economies

Abstract We investigate the macroeconomic impact of public expenditure in active labor market policies (ALMPs) and passive labor market policies (PLMPs) on main employment indicators (i.e., unemployment, employment, and labor force participation) for a large and novel panel database of 121 countries (36 developed, 64 emerging and 21 developing economies). Compared to previous studies, we include for the first time evidence from developing and emerging economies and explicitly examine the possible presence of complementarities between active and passive policies. We find that the interaction between interventions is crucial, as the effect of spending in either of the two policies is more favorable the more is spent on the other. Even the detrimental labor market effects of passive policies disappear on the condition that sufficient amounts are spent on active interventions. This complementarity seems even more important for emerging and developing economies.

A New Era in Labor Market Policies in Turkey: Unemployment Relief

Yurttaşlarını işsizliğin sebep olduğu sorunlar karşısında korumak kendisini sosyal devlet olarak tanımlayan her refah rejiminin temel amaçlarından bir tanesini teşkil etmektedir. Refah rejimleri bu amaç doğrultusunda uyguladığı emek piyasası politikaları ile doğrudan veya dolaylı istihdam olanakları meydana getirmekte veya işsizliğin sebep olduğu gelir kaybını tazmin etmektedir. Günümüz dünyasında etkileri halen devam eden COVİD-19 salgını bahsedilen işsizlik riskini çok daha tehlikeli bir hale getirmiş, salgın sebebiyle tüm dünyada milyonlarca insan işsiz kalmıştır. Liberteryen kapitalizmi benimsemiş liberal refah rejimlerinin süreci yönetmekteki başarısızlıkları korporatist anlayışla kurgulanmış sosyal politika eylemlerinin önemini bir kez daha ortaya koymuştur. Bu kriz ortamında işsiz kalan bireylerin refah düzeylerinin korunmasında ise pasif emek piyasası politikaları olarak tasnif edilen uygulamalar tek çıkış yolu olarak görülmektedir. Bu çalışma ile işsizlik olgusu ile refah rejimleri arasındaki ilişkiden yola çıkılarak dünyada ve Türkiye’de uygulanan emek piyasası politikaları incelenmiş, salgının refah rejimlerinin emek piyasası politikaları ve emek piyasalarına müdahale biçimlerinde meydana getirdiği değişikliler analiz edilmiştir. Gerçekleştirilen analizler çerçevesinde Türkiye’de kısıtlı bir şekilde de olsa ilk defa “işsizlik yardımı” uygulamasına başvurulduğu görülmüştür. Uygulamanın Türkiye’de uygulanan emek piyasası politikaları açısından yeni bir döneme işaret ettiği düşünülmektedir.

Labour Market Institutions and Income Inequalities in the Visegrad Group Countries

The diversity of the labour market in the Visegrad Group countries is presented in the article from an institutional perspective. Institutions such as different tax and transfer policies, employment protection legislation, or active and passive labour market policies can affect not only the effectiveness of the economy from a macro perspective, but they can also be crucial in determining the system of rules and incentives for earning money. The institutional conditions of the labour market directly affect the behaviour of labour market participants, their incomes, and therefore income inequalities. To asses and compare the situation between the Visegrad group countries, a synthetic measure of labour market institutions is calculated. A taxonomic analysis is done to group the V4 countries against other selected European Union countries, which enables the assessment and comparison of similarities and differences across the Visegrad countries. Finally, the trade-offs between a synthetic measure of labour market institutions and income inequalities are analysed. The Pearson correlation coefficient and, additionally, the Spearman’s rank correlation coefficient are applied. The analysis is done for 2016, as it was the most recent data available while writing the article. The results from such an analysis can help to answer the question of the state’s role in limiting income inequalities through labour market institutions and to identify the policies which are the most effective in this field.

Associations between change in labour market policies and work stressors: a comparative longitudinal survey data analysis from 27 European countries

BackgroundMany studies have shown that work stressors have a negative impact on health. It is therefore important to gain an understanding of how work stressors can be reduced. Recent studies have shown that employees in countries with high investments into labour market policies less often report exposure to work stressors. Although these studies are indicative of an influence of the political level on work stressors, they are based on cross-sectional cross-country analyses where causal assumptions are problematic. The aim of this study is to extend the existing evidence by longitudinally testing whether changes in labour market policies are related to changes in work stressors.MethodsWe used comparative longitudinal survey data from the European Working Conditions Survey (27 countries; for the years 2005, 2010, 2015). The measurement of work stressors is based on two established work stress models: effort-reward imbalance (ERI) and job demand-control (job strain). To measure labour market policies, we used information on active (ALMP) and passive labour market policies (PLMP). After excluding persons with missing data, 64,659 participants were eligible for the ERI and 67,114 for job strain analyses. Estimation results are provided by three-way multilevel models (individuals, country-years, country), which allow us to estimate longitudinal and cross-country macro-effects.ResultsAn increase in ALMP leads to a decrease of ERI. The analyses for the subcomponents ‘effort’ and ‘reward’ showed that mainly the ‘reward’ component is positively associated with ALMP. The association between ALMP and ‘reward’ shows that an increase in ALMP investments is related to an increase in rewards. Yet, no significant longitudinal associations between ALMP and job strain, and between PLMP and the work stressors, were observed.ConclusionsThe study extends the current knowledge with longitudinal information by showing that an increase in ALMP is associated with an increase in rewards and a decrease of ERI. These longitudinal analyses may support a causal interpretation. The findings of this study have important policy implications. Our main result suggests that investments into ALMP can lead to better working conditions.

Associations between labour market policies and work stressors

Abstract Background Many studies have shown that psychosocial work stressors have a negative impact on health. It is therefore important to understand how psychosocial work stressors can be reduced. First cross-sectional studies have shown that working conditions are influenced at the political level. With this study, we want to extend the existing studies by specifically looking at the longitudinal dimension and test if changing labour market policies are related to changes in psychosocial work stressors. Methods We used comparative longitudinal survey data from the European Working Conditions Survey (27 countries; years 2005, 2010, 2015). The measure of psychosocial work stressors is based on two established work stress models: job strain and effort-reward imbalance. To measure labour market policies we used information on active (ALMP) and passive labour market policies (PLMP). 64659 participants were eligible for the ERI analysis and 67114 participants for the analyses on job strain. Estimation results are provided by three-level multilevel regressions. Results An increase in ALMP investments lead to a decrease of ERI and therefore to an improvement in psychosocial working conditions. The analyses for the subcomponents showed that these results are mainly driven by reward: an increase in ALMP investments lead to an increase in rewards. We didn't find significant associations between ALMP and job strain and between a change in PLMP measures and the observed work stressors. Discussion The study extends current knowledge with longitudinal information by showing that an increase in ALMP lead to an increase in rewards and a decrease of ERI. These longitudinal analyses are more closely related to a causal interpretation than previous cross-country analyses. The findings of this study may have important policy implications. Our main result suggests that investments into ALMP can improve certain working conditions and therefore improve workers' health. Key messages Psychosocial work stressors have a negative impact on health. Investments into active labour market policies can improve psychosocial working conditions.

Partisan influence on social and labor market policies in the Silver Age of welfare state retrenchment: evidences from 19 OECD countries

Are governing parties able to shape social and labor market policies according to their ideological positions or are they overwhelmed by socio-economic and institutional constraints? The paper answers this crucial question by developing a comparative study on 19 OECD countries from 1985 to 2011. It investigates whether the location of governments on a continuous left–right scale affects four measures of welfare state generosity: namely, public spending in social policies, in active and passive labor market policies and the level of unemployment insurance replacement rate. The results obtained through an error correction model show that governing parties are unable to affect social and labor market policies in the short-run, when economic dynamics prevail. However, in the long-run, partisanship gains relevance: when the government coalition moves to the right, there is a negative impact on all the measures of welfare state generosity.

Beyond the Limits of the Productivist Regime: Capturing Three Decades of East Asian Welfare Development with Fuzzy Sets

Systematic accounts of East Asian government responses to the ‘limits of productivist regimes’ (Gough, 2004) remain surprisingly rare. This article develops three distinct types of East Asian welfare development, i.e. quantitative, type-specific, and radical, employing set-theoretic methods. It then uses these types to analyse six policy fields, including education, health care, family policy, old-age pensions, public housing, and passive labour market policy, in six East Asian societies: China, Hong Kong, Japan, Korea, Singapore and Taiwan. We find that all cases except Hong Kong and Singapore have experienced at least one radical shift in their welfare models over the past three decades (1990–2016). East Asian governments have increasingly combined quantitative expansion or retrenchment of ‘productive’ and ‘protective’ policy structures but have done so in unique ways. South Korea has followed the most ‘balanced’ approach to welfare development and stands out as the best candidate for further type-specific expansions moving forward.

Educational differences in macro-level determinants of early exit from paid work: a multilevel analysis of 14 European countries

The aim of this study was to identify macro-level determinants of early work exit and investigate whether the effects of these determinants differ across educational groups. We used data from the Survey on Health, Ageing and Retirement in Europe (SHARE) (2011–2013) and the English Longitudinal Study of Ageing (ELSA) (2010/2011–2012/2013) as well as macro-level data and included 10,584 participants in 14 European countries. We used logistic multilevel analyses to examine educational differences in macro-level determinants of early work exit. Macro-level determinants were: minimum unemployment replacement rates, expenditure on active labour market policies (aimed to help the unemployed find work) and passive labour market policies (unemployment and early retirement benefits), employment protection legislation (costs involved in dismissing individuals), unemployment rates, statutory pension age and implicit tax on continued work. We found low-educated workers to be more at risk of early work exit than higher educated workers. In low-educated men, higher unemployment replacement rates, higher expenditure on passive labour market policies, stricter employment protection legislation and a higher implicit tax on continued work were associated with a higher risk of early work exit, whereas no macro-level factors were associated with early work exit in highly educated men. In women, a higher expenditure on passive labour market policies and a higher implicit tax on continued work were determinants of early work exit, regardless of educational level. To conclude, low-educated men seem to be especially responsive to the effects of pull factors that make early retirement financially more attractive.

Determinants of ins and outs of unemployment

ABSTRACTWe estimate the robust determinants of the inflow rate into and outflow rate from unemployment in a sample of OECD countries, using Bayesian model averaging approach to overcome model uncertainty. We find that the main determinant of outflows from unemployment is expenditure on passive labour market policies, while the main determinant of inflows into the unemployment is the duration of benefit entitlement.

Active and passive labour market policies on the Russian labour market: Centralization or regionalization?

The article explores the evolution of active and passive labour market policies in the Russian Federation from the 1990s to nowadays, highlighting the roles of the federal center and the regions in its implementation. The study was based on descriptive and institutional analysis, as well as content analysis of regional employment programs. The results have shown that decentralization was applied only to an active labour market policy. At the same time the most ambitious goals were continued to be reached with additional organizational and financial support from the centre.

Is labour market policy heading for social investment in European countries?

AbstractFrom a perspective of social investment, this article analyses monetary efforts made by European countries in terms of active and passive labour market policy (LMP) between 2006 and 2015. How did spending evolve under the double impression of the social investment discourse and the crisis after 2008? How does LMP now differ from what it was before the crisis? We find that there is no real trend towards social investment in the field of LMP in recent years. This shows both in the relationship between passive and active spending and in the composition of active spending. In particular, training – crucial to a social investment approach – is further weakened in most countries’ policy arrangements. Concerning levels of spending, it is shown that labour market policy gets fiscally more demanding on aggregate, while the amount of resources made available to the average individual job seeker shrinks. Spending on LMP also remains very unequal between European countries.

The Costs of Firm Exit and Labour Market Policies: New Evidence from Europe

Abstract The churning of firms is an inherent process of industrialized economies, which entails a high rate of job destruction. Thus, a key question is: what are the policies that minimize the costs of worker displacement due to business closure? Accordingly, this paper exploits a retrospective panel of workers in 13 European countries over the period 1985–2008 to explore the factors which shape the reemployment prospects of workers displaced due to business closure. The results suggest that higher spending on active labour market policies increases the reemployment prospects of the unemployed workers displaced by business closure, both in terms of unemployment duration and in terms of stability of reemployment. On the contrary, there is evidence of a negative and sizable impact of passive labour market policies on unemployment duration.

Impact of Active Labour Market Policy Programs on Employment in the EU During the Crisis

Due to the financial crisis and the increase in the unemployment rate, active labour market policy (ALMP) inevitably returned to the forefront with its “activation strategy”. The research challenge of the article is analysing the effectiveness of ALMP in the period 2007-2013. The methodology of the work is panel regression with fixed effects estimation. The model estimates the effect of the two largest programs of the ALMP, Training and Employment Incentives, on Employment Rate, considering six additional control variables with potential effect on the labour market. The results demonstrate a positive impact of the Training program on the Employment Rate even in the time of crisis. In contrast, the Employment Incentives program had, along with Passive Labour Market Policy (PLMP), a somewhat negative impact on Employment Rate. The findings provide an insight into the nature of ALMP's implementation during the financial crisis. While the training programs keep their active nature, the employment incentives become reactive and to a certain degree act as a measure of PLMP.

The (ir)relevance of unemployment for labour market policy attitudes and welfare state attitudes

AbstractTypically, associations between being unemployed and policy attitudes are explained with reference to economic self‐interest considerations of the unemployed. Preferences for labour market policies (LMP) and egalitarian preferences are the prime example and the focus of this study. Its aim is to challenge this causal self‐interest argument: self‐interest consistent associations of unemployment with policy preferences are neither necessarily driven by self‐interest nor necessarily causal. To that end, this article first confronts the self‐interest argument with a broader perspective on attitudes. Given that predispositions (e.g., value orientations) are stable and influence more specific policy attitudes, it is at least questionable whether people change their policy attitudes simply because they get laid off. Second, the article derives a non‐causal argument behind associations between unemployment and policy attitudes, arguing that these might be spurious associations driven by individuals’ socioeconomic background. After all, the entire socioeconomic background of a person is simultaneously related to both the risk of getting unemployed (‘selection into unemployment’) and distinct political socialisation experiences from early childhood onwards. Third, this article uses methods inspired by a counterfactual account on causality to test the non‐causal claims. Analyses are carried out using the fourth wave of the European Social Survey and applying entropy balancing to control for selection bias. In only two of the 31 analysed countries do unemployment effects on egalitarian orientations remain significant after controlling for selection bias. The same holds for effects on active LMP attitudes with the exception of six countries. Attitudes towards passive LMP are to some degree an exception since effects remain in a third of the countries. Robustness checks and Bayes factor replications showing evidence for the absence of unemployment effects support the general impression from these initial analyses. After discussing this article's results and limitations, its broader implications are considered. On the one hand, the article offers a new perspective on the conceptualisation and measurement of unemployment risk. On the other hand, its theoretical argument, as well as its treatment of the resulting selection bias, can be broadly applied. Thus, this article can contribute to many other research questions regarding the (ir)relevance of individual life events for political attitudes and political behaviour.