Analyse der Schwepunkte und Aufgaben der Berufsforschung (German Edition)

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(Kiel Institute for the World Economy)

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Get access to the full version of this article. View access options below. You previously purchased this article through ReadCube. Institutional Login. Log in to Wiley Online Library. Purchase Instant Access. View Preview. Learn more Check out. Reform der Arbeitsvermittlung 2. Ausbau des Systems der beruflichen Weiterbildung 3. Ausbau der sozialen Sicherheit 4. Mit Power am Arbeitsmarkt, Wien.

Herausforderungen und innovative Konzepte, Wien, Hall, Peter A. Hall and David Soskice eds. Teilstudie Aktive Arbeitsmarktpolitik, Wien. These questions are all centred on financial issues. If creation of goods and services including human capital and multiplier effects lower the net-cost of active labour-market policies, what are the implications for financing? How can active labour-market policies be used as automatic stabilisers and again what are the consequences for financing? This paper is intended to address these questions.

A short historical summary as well as recent developments in financing ALMPs is presented. Some country experiences are evaluated in chapter four. In the following chapter the net cost of ALMP and its implication on financing is discussed. Some measures apply also to underemployed or those looking for a better job. Thanks to Peter Auer for his strong support and useful comments. I would also like to thank Janine Berg and Konstantin Wacker for their comments and help. PLMP includes unemployment compensation unemployment benefits and unemployment assistance and early retirement for labour-market reasons.

ALMPs often include a passive, income replacement component as well e. Often, ALMPs are used to support specific target groups such as women, youth, or low-skilled unemployed. ALMPs contribute to matching labour demand with supply. They enhance supply through training measures, reduce demand by providing start-up support for enterprises, create demand by public job creation and enterprise creation or change the structure of demand by employment subsidies in the private sector cf.

Auer et al. There are strong reasons for active policies, especially when a broader view on unemployment is taken that goes beyond labour-market effects and takes economic and social market and non-market effects into account as well. With longer spells of unemployment, activating policies become more important.

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During short spells of unemployment the use of public employment services and the individual search for work are economical strategies for matching and labour-market integration. If these are not successful other activating strategies become more important in combating the negative consequences of unemployment such as loss of skills, self-confidence and work motivation.

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In the European Union, the Luxembourg guidelines state that the unemployed should participate in active programmes after six months youth — unemployed up to the age of 25 or 12 months adults. Recent numbers see table 1 show that the degree of implementation of these guidelines vary widely in the EU. It is important to stress that unemployment is more than an income problem for those affected. Some observers see a connection between unemployment and terrorism.

Active labour-market policies can help to reduce or even offset many of these adverse effects or create positive effects. The loss of skills and work motivation can be tackled, psychological and health-related problems eased and social exclusion may be ended, depending on the kind of active labour-market policy applied. ALMPs have a social cohesion effect that can help to prevent mental and physical problems, have a positive impact on family relations and help to prevent crime.

Young unemployed In economic terms the distinction between direct labour-market effects and positive external effects and between market and non-market effects should be made.

ALMPs have a direct impact on the labour market employment, wages, quality of labour supply but they produce a wide variety of positive external effects better health, family relations, social cohesion etc. On the other hand ALMP comes at a cost. –

Policy makers have to weigh the desired effects of ALMP against the cost of taxes and contributions. LMPs provide a wage floor which can be a disincentive to take up regular work unemployment trap. Upward pressure on wages might result in unemployment. As will be shown later, the example of Denmark shows that generous unemployment benefits and extensive ALMP do not prevent Denmark from being the EU country with the highest employment rate and the lowest unemployment rate.

The value of goods and services produced within ALMP projects may increase the wealth of a society.

ALMPs that focus on training do not produce goods and services but human capital. Training has positive effects on productivity and enables participants to cope with technological change better. ALMPs are instrumental in supporting structural change and facilitate the transfer of workers and employees from sectors with shrinking employment to sectors with rising employment. ALMPs have positive effects on tax income and social security revenue. Whether these effects are external or internalised depends on the mode of financing ALMPs.

This is described in section 5. There is no comprehensive overview quantifying the various external effects of LMPs. If externalities are insignificant, the evaluation of LMPs has to restrict itself to evaluation of the labour-market effects — mainly employment and wages.

But if externalities are significant, and there is some evidence for considerable externalities, it is an important justification for LMPs and especially ALMPs. Further investigation of externalities might lead to insight into the design of efficient LMPs. Schmid et al.

This points to the heavy fiscal cost of unemployment either contribution- or tax-financed unemployment benefits , which can be a serious burden. However, most ALMP measures have a higher sticker price or gross cost, their positive economic and social effects are not easy to pin down and often these are long-term as well.

Contributions are usually paid by both employers and employees. Sometimes only employers or employees contribute to financing LMP. Tax revenue used for LMPs may originate from any kind of tax. All of these countries have a long tradition of labour-market policy. Although institutions and policies of the individual countries differ, classifications are often made. Generous welfare benefits and active labourmarket policies amongst other policy measures have recently resulted in high employment rates, low income disparity and relatively low unemployment rates that come at the price of high budgetary cost.

Low unemployment benefits and hardly any active labour-market policies are characteristics of this highly flexible labour market. Strong economic growth rates have led to low unemployment in recent years. The budgetary cost of labour-market policy is low, but the United States has wide income disparities and little equality of opportunities.

They have somewhat lower welfare benefits, less emphasis on active labour-market policies and strong employment protection. In recent years both countries have struggled with high unemployment rates. Both achieved high employment rates — with Denmark and Sweden boasting even higher employment rates than the US — and unemployment rates below OECD average.

The public cost of these policies is much higher and income disparities are much lower in the Nordic countries than in the US. Protracted political conflicts preceded the introduction of unemployment insurance systems in the twentieth century in Europe and North America. Opposition was caused by the fact that benefits for unemployed establish minimum conditions of work on the labour market.

Financing of unemployment insurance was shaped by history — historical political compromise and previous institutional traditions play an important role even in contemporary design of LMPs. In Europe, social-security systems were established upon two governing principles: the Bismarck-type social security, named after the 19th century German chancellor Otto von Bismarck, and the Beveridge-type social security named after the British economist and social reformer William Beveridge, who published the Beveridge report in Social security is divided into several branches old age pension, health, and later unemployment where all members pay income-related contributions.

The Beveridge report proposed a tax-financed national insurance. In the event of unemployment, Beveridge systems pay a flat-rate unemployment compensation while in Bismarck systems benefits are linked to previous earnings and sometimes also to the duration of previous employment. LMP reforms in recent years show that the categories are becoming increasingly blurred; for example Germany has changed its unemployment assistance to a tax-financed flat rate. Today, no European country operates a pure form of either social-security system. Germany, Austria, Belgium and France resemble the Bismarckian system while Britain and the Scandinavian countries are closer to the Beveridge system cf.

The United States resembles the Bismarck system. However, the proportion of private social expenditure is much higher than in Europe 3, for example there is no compulsory healthinsurance coverage. Unemployment insurance in the United States is closer to the Bismarck system. But let us go back even further.

Contributions were borne by employers, employees and the central government. In Sweden, a state subsidy for local unemployment funds was introduced in Denmark, too, introduced the Ghent system. Ebooks and Manuals

Contributions were borne by employers and employees equally. In the United States unemployment insurance by trade union self-help organisations only covered a small proportion of the workforce at the start of the great depression of the s. In a nationwide unemployment insurance system was introduced, which has retained its basic features until the present day. Previously, there was a tax-financed welfare-type for the unemployed, introduced in cf. ALMPs cover a wide range of activities, some difficult to distinguish clearly from other social or economic policy programmes.

Similar schemes were introduced in Europe but in Germany these were transformed by the fascist regime into compulsory work programmes. Only in the s did ALMPs become widespread among industrialised countries, gaining importance in the aftermath of the first oil price shock. The highest rate within Europe was recorded by Britain with 4.

LMP spending is part of social expenditure. Table 2 gives an overview on social and labour-market policy spending. Table 2 shows that European countries devote approximately twice as much to public social policy expenditure in terms of GDP as the United States do. Denmark n.

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Within Europe, the Scandinavian countries spend more than the Rhineland states. This may be influenced by a European employment strategy that calls for activation. In the United States ALMP has never played a major role over the past 20 years and today does so to an even lesser extent. More information can be obtained if ALMP spending is related to the unemployment rate in individual countries. This figure makes it possible to compare the relevance of ALMP between countries. It also permits a comparison of ALMP expenditure development over time. The figure for Sweden at the end of the s and beginning of the s is eye catching.

A sharp rise in unemployment between 1. The higher ALMP spending could not be sustained, however, owing to emerging inefficiency and the enormous cost. Sweden is still a country that places emphasis on ALMP but no longer occupies the exceptional position in Europe that it once did. Relatively loose legislation for employment protection; 2. Generous social safety net for the unemployed; 3. High intensity spending per unemployed on ALMPs.

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  7. The German figure reflects the temporary attempt to combat growing unemployment after reunification by expanding ALMP at the beginning of the s. Denmark France 2. Differences between countries are explained by different unemployment rates and different income replacement rates for the unemployed.

    Expenditure for LMPs differs between countries, as does its financing. ALMPs are predominantly financed by taxation. PLMPs are financed from a state grant funded by tax revenues, employer contributions and to a much smaller extent by employees, who pay contributions to trade-union unemployment funds. The integration in the national budget has the advantage that an increase in participation in ALMP programmes directly reduces the number of beneficiaries from unemployment insurance and expenditure.

    Employers pay labour-market contributions as part of the compulsory social insurance contributions. This money is transferred to the labour-market authority and allocated to 40 certified unemployment insurance funds, which are administered by as many sectoral trade unions. The employee contribution — voluntary and closely linked to trade union membership — is paid directly to the unemployment funds. Those who are not covered by a fund and meet certain requirements qualify for cash assistance, which is much smaller than employment insurance benefits. The monthly contribution fees vary widely, but cover only a small proportion of unemployment benefits.

    A reverse move in health insurance contributions helped keep the overall payroll tax unchanged. The level of compensation was lowered and stricter control of job-searching activity enforced in order to keep the public deficit in check. In order to react quickly to developments on the labour market, the financial resources for ALMPs are not only provided by the annual budget bill but also complementary and supplementary budgets. Employment counselling and placement, job-creation measures and sheltered employment for the disabled are entirely financed by general taxation.

    Funds for other ALMPs temporary lay-off compensation, training programmes and work experience schemes are partly refinanced from labour-market contributions by employers cf. Periods of slow economic activity and rising unemployment were countered by a rise in ALMP expenditure. But in the s this anticyclical policy weakened. Second, a shift in economic policy took place in the early s when the main objective of Swedish economic policy shifted from full employment to price stabilisation. The Swedish tradition of a heavy emphasis on counter-cyclical ALMP was no longer observable after , when unemployment increased but ALMP spending fell to its lowest level in at least 20 years.

    OECD a. Unemployment benefits are therefore a flat rate for many unemployed. Employees and the self-employed voluntarily pay a small membership contribution to unemployment insurance funds. Deficits are covered by the general budget. Financing of LMP changed with the tax reform.

    Until then most passive and all active LMPs were funded by general tax revenue. The long-term unemployed were entitled temporary subsidised employment either in public services or the private sector, after which they were able to receive unemployment benefits again.

    ALMP therefore had a supporting role for unemployment insurance. Rising structural unemployment and trouble with the design of ALMPs led to the labour-market reform of , including its financing. In June a tax reform and a labour-market reform were adopted simultaneously by the Danish parliament. The tax reform lowered the personal income tax gradually from until The substantially lower income taxation was accompanied by the adoption of socalled green taxes higher vehicle, petrol and electricity taxes, charges on water and waste.

    A labour-market contribution was introduced in order to finance labour-market policy. The contribution originally financed three labour-market funds: an unemployment benefit fund, an activation fund and a sickness benefit fund see below. This burdening of the bulk of financing LMPs on the employees still left them with higher net income due to lower income taxes.

    The overall lifting of the tax burden resulted in a strong push for private consumption and economic growth. Private household consumption grew by an impressive 6. This helped fuel strong economic growth 5. The unemployment rate fell continuously, from 9. In , at 3. Initially the reforms put a strain on public finances.

    The budget deficit remained high, at 3. From onwards Denmark has achieved an annual budget surplus. Despite the introduction of labour-market contributions, Denmark still has the smallest nonwage labour costs within Europe and smaller non-wage labour cost than the United States, Canada and Japan.

    Analyse der Schwepunkte und Aufgaben der Berufsforschung (German Edition) Analyse der Schwepunkte und Aufgaben der Berufsforschung (German Edition)
    Analyse der Schwepunkte und Aufgaben der Berufsforschung (German Edition) Analyse der Schwepunkte und Aufgaben der Berufsforschung (German Edition)
    Analyse der Schwepunkte und Aufgaben der Berufsforschung (German Edition) Analyse der Schwepunkte und Aufgaben der Berufsforschung (German Edition)
    Analyse der Schwepunkte und Aufgaben der Berufsforschung (German Edition) Analyse der Schwepunkte und Aufgaben der Berufsforschung (German Edition)
    Analyse der Schwepunkte und Aufgaben der Berufsforschung (German Edition) Analyse der Schwepunkte und Aufgaben der Berufsforschung (German Edition)
    Analyse der Schwepunkte und Aufgaben der Berufsforschung (German Edition) Analyse der Schwepunkte und Aufgaben der Berufsforschung (German Edition)

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