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National case studies

(copyright: INPART research project, TSER contract no. SOE2-CT97-3043)

This document describes the national case studies. Some of the case studies will get more attention than others, simply because the less ‘regular’ types of work need more explanation than the regular ones. The basis of the case studies was a distinction into four types of participation which will be used to cluster the case studies in the following:

Primary labour market
Secondary labour market
Unpaid work
Training and education

1. Primary labour market

Participation in the primary or ‘regular’ labour market constitutes, at least from the perspective of social policies, the prime form of social inclusion. Other types of work are either preparations for regular labour-market participation or considered to be only imperfect substitutes for a regular job.

There is, of course, no such thing as ‘a regular job’: the concept ‘regular’ itself can hardly be defined. As we have pointed out before, the primary labour market has become more and more differentiated, including all kinds of flexible jobs, temporary jobs, part-time jobs, jobs where people are self-employed or working in secondment constructions, et cetera. This diversity would justify a research project on its own, studying the inclusive potential of all these different types of ‘regular’ jobs.

We did not choose to use this approach, as we have already explained. Nevertheless, two case studies do focus on primary labour-market participation directly. One of the Danish case studies focused at a sample of employed people drawn from the national labour force register (with respect to the survey part of this particular case study). No selection criteria were used with respect to kind of jobs, types of contract and so forth, so that the sample includes all types of jobs found in the primary labour market.

The British case study under the ‘primary labour market’ heading did focus on a specific kind of job in the primary labour market, namely the part-time job. Part-time work is becoming an increasingly ‘regular’ way of labour-market participation, especially for women. At the same time, the British case study clearly shows the importance of contextualising the types of work in the case studies. For example, compared to full-time jobs, part-time jobs do not necessarily have to be ‘regular’ where employment rights protection of part-time workers is concerned. This goes especially for the British case, where part-time work under the Conservative governments has been adopted as a low-pay, ‘low-skilled’ labour-market strategy. Furthermore, Britain was exempt from the Social Protocol of the Maastricht Treaty of 1992, so that many of the employment rights directives developed in the EU were not applied in the UK. Since Labour came to power, the inclusive potential of part-time work has been increased, for example, by the introduction of new employment rights, which particularly benefited part-time workers. Thus, the British case is interesting for investigating the connections between part-time work, part-time workers’ entitlements and part-time workers’ experiences of inclusion and exclusion. The British case study into part-time work adopted in-depth interviews and took place in the retail and catering sectors in the city of Sheffield. As a demarcation criterion, working less than 30 hours a week was used to define part-timers. The largest group of respondents, however, work 16-24 hours; 35% work less than 16 hours, 9% more than 24 hours.

2. Secondary labour market

Under the heading ‘secondary labour market’ we grouped several activating programmes that are designed to integrate the unemployed, temporarily or permanently, into some type of paid work or ‘benefit-+’ construction. Apart from being targeted schemes, one of the main characteristics of these programmes is that the jobs involved are somehow subsidised, for example, by using benefits to subsidise wages or to capitalise benefits in order to help people start their own company. Sometimes, these initiatives combine the objectives of stimulating social inclusion and meeting unsatisfied local needs (for example, with respect to the environment, services, public security). The relationship between this ‘secondary labour market’ and the primary labour market can be quite different for the schemes involved in the case studies. Sometimes, the schemes provide subsidies to help to create regular employment. In other cases, the focus is on giving the unemployed opportunities for work experience (and sometimes qualifications), and the schemes are designed to be stepping-stones towards participation in the primary labour market. And finally, there are schemes that provide more permanent participation opportunities, on conditions more or less divergent from primary labour-market conditions.

The Belgian case study focused on local economy initiatives undertaken by third-system organisations. The local operation of these initiatives is an example of decentralisation tendencies we can observe in all EU countries where tackling the problems of unemployment and social exclusion is concerned. The third system organisations aim at providing goods and services to the local community and therefore undertake economic activities at the local level, but contrary to private enterprises, profit maximisation or profit generation are not their objectives. Besides other actors and institutions involved in policies against unemployment and exclusion, these organisations play an increasingly important role, since they are giving particular attention to the problems of disadvantaged persons or groups, either by integrating them into the labour market or by providing services (or a combination of both). These organisations are subsidised by the state and may also raise funds from donations or non-commercial loans. Consequently, the organisations are often involved in partnerships with public and/or private organisations or resulting from individuals associating together in order to meet a common need.

It should be emphasised that contrary to many nationally implemented social policies, some of these initiatives try to develop bottom-up approaches where individual demands are the starting point of reintegration interventions.

Methodologically, the local initiatives are a mix of three ingredients: a job offer, a training programme and individual guidance and assistance. The way these ingredients are mixed in specific programmes is an important aspect of the contextualisation of this type of work. Local projects may contain different mixes of these ingredients. In this section, we will focus at the more ‘work-oriented’ projects; the more ‘training-oriented’ projects will be described in section 4. Within these ‘work-oriented’ projects, we may distinguish the following types.

Work experience, involving various kinds of temporary work contracts combining paid-job experience with preceding or supplementary training. The basis of the payment for training hours is the social benefit, for working hours it is the sectoral minimum wage. Since the activities are mostly of a social or environmental nature without being economically very profitable, the projects and third-system organisations organising them are highly dependent on subsidies. Participation usually lasts 1 to 2 years.
Insertion enterprises, where low-skilled or long-term unemployed people work temporarily on a subsidised contract. The subsidy is considered a compensation for low productivity of the employees. These enterprises, though primarily concerned with social and environmental needs, have to be economically profitable. In Flanders, the enterprise has to become independent of subsidies after three years of operation. In Wallonia and Brussels profitability rules are less strict. Participation may be permanent, but wage subsidies of the participants are not.
Social enterprises, which only involve work with no explicit perspective on an increase in skills or productivity. Most people involved are very long-term unemployed (more than 5 years) or those who have been dependent on the subsistence minimum. Work is subsidised at a moderate level but continuously; participation may be permanent. The enterprise has to be economically profitable.

Both the work-experience projects and the insertion enterprises should prepare people for regular labour-market participation. The case study investigated 25 initiatives in the Antwerp, Liège, Mons and Ghent areas, and Brussels.

The Danish case studies include a group of activated people. This group involves people who are dependent on unemployment benefits and people dependent on social assistance. Although the activation of both groups of unemployed is regulated by different laws, the activation programmes are quite similar. Here, we will deal with work-oriented programmes; education and training will be discussed in section 4.

The unemployed in Denmark have become increasingly subjected to activation policies. For some groups these programmes have a stronger work-fare-like character than others, for example, age-groups are treated differently under current Danish social policies. Above, we have pointed at the obligatory nature of participation in activation schemes as an important contextual element in understanding people’s experiences with these schemes. Generally speaking, recipients of unemployment benefits are activated after one year of benefit dependency, and the same goes for people on social assistance who are 30 years old or older. Younger social assistance recipients receive an activation offer after 13 weeks of unemployment. Thus, in most cases the activated unemployed will be long-term unemployed, that is they have been unemployed for at least one year. Work-oriented activation programmes include the following schemes.

Job training, which may be with private or public employers. Pay and other working conditions should be according to collective agreements applicable to the sector. Wages are a maximum of 12 Euros per hour for persons activated in the public sector. Employers receive a wage subsidy of about 6 Euros per hour for each recruited unemployed. After 6 months of having received subsidies, a private employer has to employ the unemployed without receiving a subsidy any longer, or should offer the unemployed training.
Individual job training also involves a temporary job at a private company, a public institution or a semi-public organisation. The employer receives a wage subsidy, which may exceed 6 Euros per hour. The subsidy period may be longer than 1 year. Conditions in individual job training are rather flexible and working time is set individually. The wage is a special project allowance and should not exceed the maximum rate of unemployment benefits. Other working conditions should be as close to normal as possible.
Pool jobs are public sector jobs of up to three years’ duration for persons who have been unemployed for a period of 1 year. Hourly pay is the same as in public job training. The main aim of this scheme is to create more permanent jobs to meet social needs or improve the quality of existing services. Jobs can be created by public employers in the following sectors: environmental protection, conservation of nature, culture, collective public transport, housing, education, health and care, and the labour-market field.

With the exception of those involved in job training in the private sector where no income ceiling exists, the participants in these schemes may not earn more than the maximum rate of unemployment benefits. When full-time wages exceed this limit, working hours are reduced accordingly. Although participation periods may be shorter or longer, they are in general designed to increase integration opportunities within the primary labour market.

One of the Dutch case studies deals with the ‘Extra Employment for the Long-term Unemployed Scheme’ or Melkert-1 Scheme which was introduced in 1995. The aim of this scheme is to enlarge the availability of low-skilled and low-paid jobs in the Dutch labour market, and, at the same time, to improve the quality of public services. The jobs are targeted at people who have been unemployed for at least 1 year and who are entirely or partly dependent on social assistance. Participation in these jobs may be permanent. In January 1999, 34,700 Melkert-1 jobs had been created, partly in the health sector, partly by the 79 municipalities that, in 1997, were allowed to create Melkert-1 jobs. This case study focuses only on the latter part of the scheme as implemented in the city of Rotterdam, which employs over 10% of all Dutch Melkert-1 workers. On average, Melkert-1 workers work 32 hours a week. Wages are set at a minimum of 100% of the nationally set minimum wage and a maximum of 120% of the minimum wage, on the basis of a regular full-time working week (usually 36-38 hours). Other labour conditions depend on the collective agreement applicable to the sector in which the Melkert-1 worker is employed. Although the Ministry of Social Affairs and Employment likes to stress that Melkert-1 jobs are ‘regular jobs’, they deviate from regular jobs in the following ways:

Melkert-1 jobs are funded according to specific regulations;
They are targeted at the long-term unemployed;
They are subjected to the legal regulation that Melkert-1 workers can never earn more than 120% of the minimum wage. This also means that working overtime must be compensated in free time once the 120% threshold is reached. Since July 1997, supplements for irregular working hours are no longer taken into consideration;
The work tasks of Melkert-1 workers are defined by legal regulations, and should only involve simple, routine tasks requiring little formal qualifications.

Formally, people may refuse a Melkert-1 offer (as any job offer may be refused), but, according to social assistance regulations, they risk sanctions when refusing a job offer. Melkert-1 jobs are completely subsidised: for each newly created Melkert-1 job, a subsidy of 18,000 Euros is available.

One of the Portuguese case studies focuses at the Occupational Programmes for Unemployed People (POC), that have been in operation since 1985. POC’s are oriented towards people receiving either unemployment benefits or the unemployed in economic need, whom they provide with short-duration (< 1 year) occupational activities under projects promoted by non-profit organisations, largely in the areas of environment, culture, heritage, social support and other social areas. According to official documents, POC’s were created to ‘combat demotivation and marginalisation tendencies’ among the unemployed, and to aid their social integration through a ‘socially useful occupation’. It is recognised that the programmes ‘are not targeted at job creation nor at being engaged in productive jobs in the labour market’. Participation in a POC is explicitly temporary.

According to a recent revision of the law, recipients of an unemployment benefit or social security benefit are obliged to accept a POC job offer, or else they will lose their benefit entitlements. POC placements entitle recipients to a complementary income of 20% of the unemployment benefit, plus transportation, meals and costs for accident insurance. The Portuguese POC case study took place in the town of Figueira da Foz.

Finally, the Spanish case studies have the least characteristics of a secondary labour-market programme. In fact, subsidies are provided to create ‘normal’ jobs in the primary labour market. Thus, of all job schemes presented in this section, the Spanish scheme resembles primary labour-market participation most. The scheme under investigation is the capitalisation of unemployment benefits scheme. This scheme is the most important activation measure in Spain aimed at creating new employment in the regular labour market. The jobs that this measure tries to stimulate are located in the social economy sector. Until 1992, workers had the option to invest their capitalised benefits either in an autonomous company or in the social sector. In 1992, the option to invest the money in self-employment actions was cancelled. From then on, to make use of the scheme one has to invest all the money generated by capitalising unemployment benefits into a social company (Anonymous Labour Societies, Limited Labour Societies or Social Co-operatives). The general idea of this capitalisation process is that workers can receive in one time the total value of their unemployment benefit entitlements. Contrary to most other schemes discussed in this section, the Spanish scheme is not targeted at the long-term unemployed specifically. The reason for that is simple: the longer people are unemployed, the more of their unemployment benefit entitlements they will have consumed, and the less interesting capitalising their unemployment benefits will be. In general, people will apply for the capitalisation scheme as soon as they get unemployed. Since administrative procedures for judging the application take about 3 months, the applicants will have been unemployed for about 3 months once they start working in the new business. Furthermore, since the scheme only involves people that are entitled to unemployment benefits, it is aimed at people who can be assumed to function in the labour market and have years of work experience.

One should distinguish two periods in the history of the scheme. During the first period, 1985-1992, investments often took place in previous private companies located in the industrial sector that had closed down. Thus, the capitalisation of unemployment benefits scheme were used to ‘take over’ private companies that were threatened with closure. Besides, during this period workers also had the option to invest the money in self-employment actions. The latter option was used by workers to create a new company, different from the one they were employed by before. Starting in 1992, workers were obliged to invest the money in social companies. Some of the new social companies that were established after 1992 are managed by young workers, which was not the case during the first period.

In 1997, the Labour Societies Law was approved. According to this law, to create Limited Labour Societies it is necessary to invest 3,000 Euros and to have three associated workers. After this legislation, many social companies of this kind are being established: workers prefer to establish Limited Labour Societies rather than Labour Anonymous Societies.

Within the social companies, two categories of workers can be distinguished. The associated workers have shares in the company and have a voice in the company’s assemblies. The second category of workers, non-associated workers, do not have these rights.

The case studies took place in the areas of the metropolitan cities of Barcelona and Bilbao, where unemployment was relatively higher.

3. Unpaid work

The case studies presented under this heading involve different degrees of ‘social policy relatedness’. The British case study, mainly concerned with unpaid work but also involving a certain degree of informal paid work, focuses attention to working and unemployed people’s strategies of doing and making use of unpaid work to get work for themselves or others done. The Danish case study involves a group of unemployed people that, on their own initiative, began to participate in voluntary work and received permission from benefit agencies to do so. The Dutch case study is concerned with a specific activating social policy scheme, targeted at the long-term unemployed and aimed at increasing their social inclusion by stimulating and supporting their involvement in unpaid activities.

The British case study deals with informal work, predominantly unpaid work but also informal paid exchange. The promotion of unpaid work is often seen as problematic since governments may harness it either to reduce the welfare state by trimming social services and emphasising ‘individual responsibilities’, or to cut back on social rights. However, besides this social policy approach of unpaid or informal work as a way of replacing employment and the welfare state, another approach may be distinguished which seeks to supplement, not replace, employment and state provision: the ‘assisted self-help’ approach. In this case study, unpaid work is studied from the latter point of view.

Two socio-economic backgrounds seem to legitimise attention to unpaid/informal work in the context of the INPART research. First, there is the continuous high level of unemployment and underemployment in many European countries. Second, although unpaid and informal work are often thought of as manifestations of ‘backwardness’ rather than ‘modernity’, unpaid work has always formed a very important part of the total work time in advanced economies and its importance has even increased. In other words, at least some advanced economies seem to witness a process which might be defined as a ‘southification of the north’ rather than the opposite: an informalisation of work.

Paying attention to this type of work may contribute to answering the question which of the three following policy options should be chosen to deal with unpaid and informal work:

To enable deprived populations to rely less on informal work by giving them access to formal-sector provision through either employment creation or higher benefits;
To allow the situation to continue as it is by adopting a ‘laissez-faire’ approach;
To swim with the tide of these structural changes and harness such work.

These same issues and policy choices are relevant to the two other case studies dealing with unpaid work as well. The Danish case study includes a group of unemployed people who are participating in some sort of institution or organisation on a voluntary basis, while still receiving benefits. They might be called ‘self-activated’, since they have found this voluntary work themselves. Their participation does not take place in the social-policy context of a process of qualifying for labour-market participation. One might even state that this group of people do not necessarily have major difficulties in finding an ordinary job. Generally, they are unemployed for a relatively short term. Although social security systems have often been reluctant to recognise or allow voluntary work by unemployed people, because it was considered to reduce their labour-market availability, the Danish social security system does, under certain conditions, permit unemployed people to do voluntary work without this having any consequences for their unemployment benefits.

Finally, the Dutch case study on unpaid work deals with a social policy initiative focusing on socially integrating long-term unemployed people through unpaid activities. The case study focuses on one of the experiments in the context of the scheme ‘Experiments working while retaining benefits based on article 144 of the Social Assistance Act’, also known as Social Activation or Melkert-3. In 1996, a new Social Assistance Act was introduced in the Netherlands, aimed at, among other things, increasing the activating function of social assistance. In this context, municipalities were offered the opportunity to start experiments with the objective of activating unemployed people with very small labour-market chances in unpaid activities. In a sense, the scheme targets a ‘hard-core’ group of unemployed people that have been subjected to ‘creaming-off’ processes by previous activation measures. In other words, Social Activation was designed to be a ‘participation safety net’.

Social activation is not a job scheme. Participants are engaged in unpaid activities and remain social assistance recipients. Local discretion in designing experiments is quite large, which means that these experiments may differ on various dimensions. Our case study focuses on the largest and one of the earliest Social Activation experiments, the experiment in the city of Rotterdam. The dimensions of classification of Social Activation experiments and the position of the experiment in Rotterdam within this classification are as follows:

The objectives of the experiments may primarily focus on combating social exclusion (‘welfare policies’), on preparing labour-market participation (‘labour-market policies’), or on a mix of both. In the Rotterdam experiment, labour-market participation is no objective. At the same time, social activation participants who want to find a job should be supported while realising this objective. Re-entering the labour-market is considered to be a positive ‘side- effect’ of social activation.
Participation in the experiments may be voluntary or obligatory. In Rotterdam, participation in the project is voluntary. If people do not want to participate, they will not be sanctioned in any way.
The target group may be defined narrowly (very long-term unemployed on social assistance), but sometimes participation is opened up for other groups of people confronted with social exclusion as well (for example, elderly people or people on disability benefits). In Rotterdam, long-term unemployed social assistance recipients are the most important target group in the experiment. Nevertheless, other groups do occasionally participate in the project.
The methodology used in the experiments may be ‘top-down’: municipalities develop some forms of participation and then start looking for candidates; or the methodology may be ‘bottom-up’ or client-centred, starting with an assessment of people’s capacities, wishes, ambitions etc. and finding or developing appropriate participation opportunities when this assessment has been completed. In Rotterdam, the latter approach is being used.

In addition, the following characteristics of the experiment in Rotterdam should be mentioned.

Participation in the experiment is allowed for a maximum period of 2 years. After this period, prolongation of participation is possible.
Participants in social activation are released from the obligation to apply for jobs. People who do not want to participate remain under this obligation.
A variety of unpaid participation options is open to participants. These options include organised voluntary work, informal unpaid activities, education and intensive guidance or counselling.
Participants in the project that are involved in socially useful activities receive a reimbursement of expenses. The maximum reimbursement participants can get amounts to 540 Euros a year.
Social activation in Rotterdam is not just targeted at people who are not participating in social activities at all. It is also open to people who are already participating in unpaid activities. In practice this often means that they continue these activities, but now are released from the obligation to apply for jobs and get a reimbursement of expenses.
The ‘activation work’ is carried out by 12 decentralised Social Activation agencies. These agencies operate independently from the municipal social services.

4. Training and education

Like the case studies that were described under the heading of ‘secondary labour market’, the case studies focusing on training and education relate directly to active social policy initiatives. Training and education are practically always aimed at increasing the qualifications or ‘human capital’ of the unemployed in order to improve their labour-market chances. From this perspective, the effect and ‘successfulness’ of training/education programmes may be described in terms of their contribution to labour-market integration of participants. From a broader perspective, however, training and education activities can also be seen as types of participation in themselves, for they may provide participants with new social networks, useful activities, status (‘trainee’ or ‘student’) et cetera. In the case studies, training and education initiatives will be investigated from both perspectives.

As we have already described above the Belgian case studies deal with several local social economy initiatives undertaken by third-system organisations. A number of these initiatives can be classified as training, even though the demarcation lines between initiatives focusing on training and on work are not drawn very clearly. Thus, the initiatives we will describe here are primarily oriented at training, but may involve elements of work or work experience as well.

There are three kinds of programmes that can be distinguished in the Belgian case studies on education and training.

Alternating learning is primarily focused on young school drop-outs (aged 15-21). These programmes give young people the opportunity to learn and to acquire skills in a workshop environment during a maximum period of 4 years. Although the workshop formula involves the production of economic goods, these are not economically profitable, which explains the involvement of third-system organisations. Participants receive an income that is derived from the minimum wages for young people.
Vocational training. The content of these training programmes is quite similar to training programmes organised by municipal governments. However, the involvement of third-system organisations facilitates the participation of people who are not registered as unemployed or of people facing individual problems. Programme duration is between 1 and 3 years. Participants remain on social benefits.
Training enterprises. Resembling the alternating learning programmes, training enterprises also involve learning in a workshop environment. However, the target group of these programmes is not as homogeneous as is the case in alternating learning. Regional differences exist with respect to the target group of the schemes. For example, in Brussels and Wallonia, access is restricted to people who have not finished secondary education. Furthermore, the participation period is shorter than in the case of alternating learning: 9-18 months. Participants receive social benefits plus a remuneration of 1 Euro per hour. Individual guidance and route counselling are typical for these programmes.

In the Belgian case study, 27 of these training and education initiatives were investigated.

As was already stated, the Danish case study involves a group of activated unemployed. In section 2 we described the general rules that govern the activation of unemployment benefits and social assistance recipients. There, we also described the work-oriented activation programmes. Here, in the context of training and education, we will deal with the education/training part of the Danish activating policies. These training and education schemes may take place in the ordinary educational and training system or are organised as part of special, tailor-made programmes. Unemployed persons participating in these schemes may receive a trainee allowance, but as a main rule, no training allowance will be granted to participants in medium- or higher-level education programmes. Participation in vocational training programmes is another option in the context of these schemes. Young people (under 25) on unemployment benefits who have not completed a formal education or training programme are treated differently from other unemployed. After 6 months of unemployment, their benefits are reduced to 50%, and they have the right and obligation to participate in education or training for at least 18 months.

Finally, the Portuguese case study on training and education focuses on the so-called Measure 2 of the Integrar Sub-Programme. This programme was adopted in 1994 under the second EU Support Framework through the programmes ‘Improving the Quality of Life and Social Cohesion’, and ‘Health and Social Integration’. The core aim of the Integrar sub-programme is to create, through training and employment measures, conditions for the economic and social integration of marginalised social groups.

Measure 2 is directed at the vocational reintegration of the long-term unemployed by promoting informative sessions, vocational guidance and training courses. Priority is given to the low-skilled unemployed, women who have difficulties with vocational reintegration, persons unemployed for more than 2 years and those who are not receiving unemployment benefits (neither contributory benefits nor social assistance), as well as to recipients of the Guaranteed Minimum Income. The case study investigates a Measure-2 training course