Henning Jørgensen Professor, Aalborg Universitet, CARMA henningj@socsci.aau.dk ,

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

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 systemsbased 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. 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 Flexiblelabourmarket Activelabourmarket andeducationalpolicies The social partners 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. 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. 25 1974 20 1975 1973 15 1971 Wage increase (percentage) 1961 1966 1965 1976 1970 1968 1969 1972 1979 1967 1977 1982 1980 10 1978 1962 1987 Labour market policy reform 1981 1959 1964 1963 1956 1983 1988 1960 1986 5 1984 1957 1985 1998 1958 2001 1999 1991 1996 2002 1997 1995 1989 1990 2000 1994 1992 1993 0 0 2 4 6 8 10 12 14 Unemployment (percentage) Denmark: the Phillips curve flattened out! 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

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: toostatic • 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!

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

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?