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Varieties of Welfare-to-Work Policies Denmark,
Germany and the US Michaela Schulze Goethe
University Frankfurt Second ASPEN/ETUI-REHS
Conference March 20-21, 2009 Stream 5 From
Workfare to Activation and back (to
workfare)? Changing European Policies for
Uninsured Workless People
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Table of Contents

• Introduction
• 2. Frame for the Study of Welfare-to-Work Reforms
• 3. Emerging Welfare-to-Work Paradigms
• 4. Welfare-to-Work Reforms in Comparison
• 5. Conclusion Convergence or Divergence

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1. Introduction

• Work in return for your benefits popular
  slogan for the reforms
• term welfare-to-work
• is a new social policy paradigm
• an international comparison will show some
  common features (? convergence)
• ? welfare-to-work trajectories in Denmark,
  Germany and the US
• some convergence, but more divergence
• every country has found tailor-made solutions
• according to problem definition and suggested
  solutions (on a national level)
• Denmark and Germany were not following the US
  model

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2. Frame of the Study of Welfare-to-Work Reforms

• welfare-to-work discussions
• 1980s (US) and 1990s (Europe)
• 2 research gaps
• ambiguity with the used terms
• workfare (Peck 2001, Quaid 2002 Shragge (ed.)
  1997 Lødemel/Trickey (eds.) 2000)
• activation (Drøpping/Hvinden/Vik 2002 Hvinden
  1999 Barbier 2001, 2004)
• enabling state (Gilbert/Gilbert 1989)
• aktivierender Staat (Lamping/Schridde 2003
  Merkel 2005 Mezger/West (eds.) 2003 Opielka
  2003a)
• ambiguity of the dimensions covered by the used
  terms
• unemployment benefits
• social assistance
• programs of active labor market policies

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• ? there is a need for an umbrella term
• no associations (negative connotations)
• broad and encompassing concept
• useful for an international comparison
• My suggestion for an umbrella term
• welfare-to-work (reforms)
• Elements of welfare-to-work reforms or policies
• is a compulsory welfare state element (for
  recipients of benefits)
• it is about work (in return for benefits)
• located at the interface of social policy and
  labor market policy
• result in a change understanding of social
  policy (taking benefits, giving work
  conditionality instead of passivity)

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• ? some convergence with regard to the elements
• - no new welfare state type is emerging
• - persistent divergence
• result varieties of welfare-to-work reforms and
  policies
• paradigm shift policy change -gt
  welfare-to-work reforms

Table 1 Time Frame for Welfare-to-Work Reforms
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3. Welfare State Traditions and Settings

• DK social-democratic regime type
• - extensive welfare benefits
• - aimed at full-employment
• GE conservative regime type
• emphasis on social insurance
• introduction of active measures of labor market
  policies in 1969, but remained passive until
  paradigm shift in 1990s
• State as the main provider of welfare
• US liberal regime type
• emphasis on means-tested social assistance, no
  extensive insurance system
• market as the main provider of welfare

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• Development of Programs affected by
  welfare-to-work Reforms and Policies

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3. Emerging Welfare-to-Work Paradigms

• paradigm shift as a precondition for
  welfare-to-work reforms and policies
• policy paradigms according to Peter Hall
• as a set of ideas that specify policy goals and
  useful instruments
• ? aim is to show how welfare-to-work paradigm
  appeared in the discussions about the welfare
  state

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• Emerging Welfare-to-Work Paradigm in Germany
• (1998-2001)
• German problems (defined by politicians
  scientists)
• long-term unemployment
• insufficient incentives to take a job, lack of
  qualifications
• ineffective administration
• 1998 election campaign of the Social Democratic
  Party
• Bodo Hombach (Federal Minister of the
  Chancellery) called for reforms
• Fördern und Fordern was the main slogan
• individual initiatives to take a job,
  re-balancing rights and duties
• Schröder-Blair Paper (1999) - idea of activation
• German discussion was inspired by Anthony Giddens

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• Emerging Welfare-to-Work Paradigms
• in Denmark (1988-1993)
• Danish problems
• unemployment as a matter of structural problems
  of Danish economy
• lack of qualifications, insufficient incentives
  to take a job
• several reports
• Economic Council (1988)
• Government (1989)
• Social Commission (1991-1993)
• Zeuthen Commission (1992) was established to
  elucidate the problems
• - active measures of labor market policies as
  solution
• obligatory participation in activation programs,
  job search courses, education and job training
• improvement of qualification and social
  integration

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• Emerging Welfare-to-Work Paradigms
• In the US (1981 -1988)
• discussions of scientists and politicians
• Charles Murray, Michael Tanner (better off
  without the welfare system, work supersedes
  welfare)
• Lawrence Mead (illegitimate birth, amount of
  welfare benefits that results in dependency)
• Ronald Reagan (welfare is wasteful and
  counterproductive)
• black lazy welfare queen
• 1981 OBRA (Omnibus Reconciliation Act)
• 1988 FSA (Family Support Act)
• ? problematic group recipients of AFDC (not
  the unemployed)

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4. Welfare-to-Work Reforms in Comparison

• from ideas to reforms
• policy change means here that reform(s) were
  passed that establish welfare-to-work ideas
• - different timing and duration
• ? Major reform steps

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• Welfare-to-Work Reforms in Germany (2001/2-2005)
• 2 major reform steps
• ? Job-AQTIV Law (2001)
• main elements activation, qualification,
  training, investment, job placement
• aims improving job service, active integration
  of the unemployed, education and training for
  unskilled workers
• slogan of Fördern und Fordern established

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• Welfare-to-Work Reforms in Germany (2001/2-2005)
• Hartz Reforms (2003-2005)
• Hartz 1 Hartz 3
• reforming and improving job service,
• reducing bureaucracy,
• job placement as service for clients,
• self-employment for unemployed was fostered,
• possibilities of sanctioning unemployed were
  expanded
• Hartz 4 final step towards welfare-to-work
  policies,
• unemployment benefits were reduced to 12 months,
• unemployment benefit II (replaced former
  unemployment assistance and social assistance for
  able-bodied persons),
• people who do not take an appropriate job will
  lose their benefits,
• creation of job centers (to end former double
  responsibility)

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• Welfare-to-Work Reforms in Denmark (1993/4-2005)
• longer reform path, reforms aimed at social
  assistance (a) and unemployment insurance and
  programs of active labor market
• policy (b)
• a) reforms aimed at unemployment benefits
• First, Second and Third Labor Market Reform
  (1993/4 19951998)
• duration reduced to seven years (1993/4) to five
  years (1995) to four years (1998)
• right and duty to be activated after two years
• duty to accept an appropriate job
• b) reforms aimed at social assistance
• Law on Active Social Policy (1998)
• - right and duty to activation
• duty to accept an appropriate job
• More People to Work 2002
• sanctions for social assistance recipients
• fostered control of work obligations
• A new chance for all 2005

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• Welfare-to-Work Reforms in the US (1988-1996)
• 1988 FSA (Family Support Act)
• - created JOBS-Program (Job Opportunity and
  Basic Skills Program)
• states had to establish workfare-programs,
  support for AFDC-families, job placement,
  obligatory on the job training, states could
  establish time limits
• 1996 PRWORA (Personal Responsibility Work
  Opportunity Reconciliation Act)
• AFDC was replaced by TANF (Temporary
  Assistance for Needy Families)
• carrots and sticks
• further strengthening of workfare-principles
  (work as soon as recipients are job ready but no
  later than 2 years after coming on assistance)
• life time limit of 5 years (after 5 years states
  can give financial assistance)
• EITC further extended, public childcare and
  transportation
• ? no major changes since 1996!!!!

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• ZUM SCHLUSS FOLIE MIT KRITERIEN woran man
  wirklich Divergenz analysieren kann!!!

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5. Conclusion Convergence or Divergence

• Criteria of welfare-to-work show some
  convergence
• a compulsory welfare state element (for
  recipients of benefits)
• it is about work (in return for benefits)
• located at the interface of social policy and
  labor market policy
• result in a change understanding of social
  policy (taking benefits, giving work
  conditionality instead of passivity)

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• ? BUT a lot of divergence
• - timing and duration of paradigm change and of
  reforms
• - problems and suggested solutions
• - programs affected by reforms (social
  assistance, UI, labor market policy)
• (sanctions, time limits, strictness of work
  requirements)
• ? tailor-made solutions!!!
• result varieties of welfare-to-work reform paths
  (paradigm change and policy change)