1. From learning to steering in Danish labour market policy - or from a beautiful swan to an ugly duckling?
Henning Jørgensen
Professor, Aalborg Universitet, CARMA
Welfare States in Transition, Chicago 15th May 2009

2. Activation as part of the ”modernization” of the welfare systems
Activation part of a new intervention paradigm
employment as goal and central integration mechanism
new moralism build into contractual arrangements
reinventing identities (economic citizenship)
Activation regimes: diversity
different concepts of active labour market policy
LMP expenditures differ strongly
LMP priorities differ strongly
LMP procedures differ strongly

3. Expenditures on Labour market policy 2005

4. Construction of activation systems based on:
Egalitarian values
social logic, outcome of struggles
Beveridgean rationale
Paternalistic values
functional logic, outcome of construction
Bismarckian rationale
The Danish activation system of the 1990´es based on egalitarian values

5. The Danish labour market system
A voluntaristic bargaining system (collective agreements since 1899)
A political interventionist strategy
densely organised labour market
negotiated regulation of labour market questions
active labour market policies (especially since 1994)
generous unemployment benefit system (socializes costs of flexibility)

6. Collective agreements
The Nordic Approach:
Macro-economic
policy
The social partners
The welfare state
Income security
Services and LMP
Wage policy
Collective agreements

7. ”Flexicurity”
Job protection
Low
High UK
USA
Social
protection
Low
Italy
High
Denmark
GermanySweden

8. The Danish flexicurity system: not a model – only relationships
Strong rotation between jobs
Low job security
Quick structural adaptation
The primary axe of the Flexicurity model
Flexible labour market
The social partners
Active labour market and educational policies
Social
security
Income security
High percieved job security
Employment security

9. Some basic figures for Danish flexicurity: ”the security of the wings” (up to 2004)
13 percent of the workforce complete a CVT-courses each year
30 procent change jobs each year
20 procent of the workforce experience unemployment each year
Flexible labour market
CVT
ALMP
Social security
11 procent in ALMP each year

10. - individual action plans - activation offers (mostly education)
Danish LMP reform 1993/1994
* Content:
- from rules to needs
- individual action plans
- activation offers (mostly education)
* Steering
- regionalization
- the social partners in pivotal positions

11. Unemployment figures (%), 1994-2006
OECD, Employment outlook, 2007.

12. Denmark: the Phillips curve flattened out!5 10 15 20 25
Wage increase (percentage) 2 4 6 8 12 14
Unemployment (percentage)
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
Labour market policy reform
Source: ADAMs databank

13. New LMP reform of the new government: ”More people to work” 2002/2003
Individual and flexible contacts with the unemployed persons
Job plan
Use of ”other actors”
Offers
guidance and qualification
trainee service
wage subsidies

14. New structural reform 2007 - 2009
Towards one-tier system:
Joint entrance for all kinds of unemployed people into jobcentres (common for municipalities and public employment service)
From 14 to only 4 regions:
(now mostly monitoring agencies)
From corporatist steering to state-municipality steering:
(reduced role of the social partners)

15. Danish ”employment policy” 2007-
Content:
* Shift of priority from fighting unemployment towards increasing the supply of labour
* Activation to become threatening to unemployed people in order they will find a job themselves (but still rights and dialogues)
Processes:
* The social partners no longer in pivotal positions: municipalities takes over decision-making responsibility
* coordination weakened, contractualisation in use
Polity:
* schizophrenic mixture of control and competition
(decentralized operations – centralized steering)

16. The Labour Market Steering System in Denmark 2007 - 2009
State financing unemployment benefits and efforts
BER
RBR
Monitoring of effects and results
Jobcentres (91)
B (77)
C (14)
LBR S M M KB
Municipal financing of assistance and efforts

17. A new labour market steering system from 1.8.2009
Municipalities take over all responsibilities
Economic incentives to steer activities
Strong monitoring and intervention from the side of the state

18. Policy changes - assessment
Content
Continuity
Break
Process
Incremental change
Reproductive adaptation
Gradual change
Abrupt/ Brusque change
Regime survival
System transformation

19. Institutional recalibration of the system
Contractualization introduced at all levels
Performance management system and ”steering” as to results
New measurement system from 2007
Central standards and manuals

20. Evidence-based measurement system
Is partial: includes only some aspects of LMP (employment records)
Measures only on the supply side: is one-sided
Register last years performance: too static
The role of dialogues has been reduced

21. Consequences internally
The frontline people have a new role definition: agents for a ”behavioral” policy
Employees will experience de-professionalization
The PES is becoming a traditional bureaucracy (run by the municipalities)

22. Implementation depends on organizing principles
The labour market calls for shifting and dynamic interventions:
But the jobcentres are transformed into traditional bureaucracies!
Tasks
Technologies
Uniform
Variable
Standardized
Bureaucracy
Professional organisation
Non-standardized
Management
Learning organisation

23. Internal behavioral consequenses:
”Wicked” problems redefined as ”tame” ones
Steet-level bureaucrats have less discretion
No further training and education in the system
Controlling the unemployed people: they need to learn how to handle their own situation and to reshape their attitudes (a moral-theraupeutic problem)

24. Danish policy change now more ”European” as to institutional reform
Policy design separated from policy implementation
MBO is subsituting law making and political regulation
Measurement og monitoring to help performance management (central steering)
Individualization and moral-therapeutic practices (case-management)
Contractualization
Quasi-markets and outsourcing of tasks from PES
Standardization of procedures and ways of operating

25. But: cooperative adaptation is still the key to good governance
Institutionalizing social dialogues
Placing responsibilities on actors
Developing common norms
Coupling mechanisms
Trust and learning

26. political system actors cooperation coordination cognition trust
coupling mechanisms
learning
norms
coordination
institutional set-up
resources
incentives
motivation
goals
cognition
actors
political system

27. Danish LMP: from beautiful swan to an ugly duckling?
LMP no longer ”owned” by the social partners
In LMP: Threats and sanctions to become dominant (paternalistic values introduced)
From qualification measures (learn-fare) to ”shortest possible way to a job” (work-first)
Organizational change from a learning system to central steering of a fully bureaucratized system
Leaving Danish flexicurity behind?