A New Kid in Town? Active Inclusion Elements in European Minimum Income Schemes
Abstract: This article assesses the current variation in activation strategies directed towards able-bodied persons of working age relying on a minimum income guarantee in 19 EU member states. First, we argue that the active inclusion notion developed by the European Commission in its Recommendation on the active inclusion of persons excluded from the labour market provides a useful tool to categorize current activation strategies towards minimum income protection (MIP) recipients. Consequently, we assess the empirical viability of active inclusion strategies in a fuzzy set ideal type analysis of purpose-collected institutional data. We find that there are only few countries where the activation discourse has remained a dead letter. Most countries implement policy measures that aim to discourage benefit dependency among MIP recipients. Nevertheless, behind the realities of activation strategies towards MIP recipients seldom lies the notion of active inclusion as defined by the European Commission. Particularly, many countries focus predominantly on incentives to increase labour market participation rates of MIP recipients, rather than enabling measures.
Summary (3 min read)
- This paper asks whether the principles outlined in this policy document provide a useful extension to common activation typologies for assessing variation in activation strategies directed at the specific target group of minimum income protection (MIP) beneficiaries.
- To this end, the authors hold the active inclusion principles against dimensions that have been identified as capturing differences in activation types, before they embark on an empirical assessment of activation strategies in 19 EU Member States’ MIP schemes, for January 2012.
- In the following section, the authors briefly discuss the principles outlined in the active inclusion recommendation.
Active inclusion principles
- The 2008 Recommendation combines a long-standing EU level interest in adequate MIP schemes with a focus on common social policy objectives through economic growth and increasing labour market participation (Vandenbroucke and Vleminckx 2011).
- However the 2008 Recommendation remains vague on the desired level of minimum income guarantees as well as on issues related to coverage and take-up of assistance payments.
- The second pillar, inclusive labour markets, details that persons able to work should “receive effective help to enter or re-enter and stay in employment that corresponds to their work capacity” (European Commission 2008: 13).
- It urges Member States to provide for a broad range of very different types of active labour market measures, including policies that raise the employability of the workforce and improve the accessibility and quality of jobs at the bottom of the labour market.
- These services should be affordable, readily available, and easily accessible for those in need.
- The widespread shift in government priorities from passive income support to activation and investment (Weishaupt 2011), has led to an abundance of activation forms and instruments (Barbier and Ludwig-Mayerhofer 2004; Eichhorst and Konle-Seidl 2008).
- Yet, especially more instrument-oriented classifications do share a focus on the distinction between ending benefit dependency through labour market participation versus human capital formation as two different approaches to activation (Torfing 1999; Barbier and Ludwig-Mayerhofer 2004; Dingeldey 2007; Bonoli 2011; Leibetseder 2014).
- He sees both aims of activation to represent two distinct dimensions or axes of activation, thereby allowing for four types of activation: incentive reinforcement, upskilling, employment assistance and occupation.
- The authors have argued that active inclusion is in essence a multi-dimensional notion that combines a broad interpretation of human capital formation with an incentives approach to activation.
- Especially the inclusive labour markets pillar combines an enabling with a recommodifying intent, explicitly recommending enabling labour market policies as well as more demanding labour market participation incentives.
- This paper uses institutional data on minimum income provisions for the able-bodied of working age in 19 EU countries referring to the situation in January 2012.
- Data are extracted from the expert-sourced CSB-MIPI data set.
- More in particular, the analysis builds on i) standard simulations of the net disposable income guaranteed to the able-bodied of working age and on ii) information on activation efforts and activity requirements.
- The questionnaire also includes background information on the active labour market programmes available to MIP recipients.
- Indicators are based on national or local laws and policy guidelines in order to gauge non-discretionary activation policies.
- The authors use fuzzy set ideal type analysis to assess the conformity of activation policies to the active inclusion principles of the 2008 Recommendation.
- A value of 0.5 denotes the point of maximum ambiguity (see table 2).
- Through logically combining these set membership scores, it is possible to systematically assess cases’ membership into the overarching underlying concept (i.e. the ideal typical construct).
- Either implicitly or explicitly, it has been recognized that both approaches can be combined in a single strategy (Torfing 1999; Dingeldey 2007; Etherington and Ingold 2012).
- Finally, one can think of a pre-activation model where providing passive income support rather than preventing social risks is the main policy priority.
The active inclusion elements
- Table 2 summarizes the indicators used to assess countries’ adherence to the different aspects of active inclusion.
- Child care costs exceeding 30 per cent of net income are no exception, yet Finland and Austria succeed in keeping costs under three per cent of net minimum wage income 1 .
- Even though financial incentives are generally lower in countries with more generous minimum income support , only in Austria and Estonia do net benefits exceed 90% of minimum wage income 2 .
- The authors distinguish between three - admittedly broad - types of active labour market programmes: training, employment experience in the public sector and in the private sector 5 .
Mapping active inclusion in the EU
- Figure 3 presents countries’ principal activation strategy (i.e. the strategy to which they have the highest membership score).
- Moreover, most countries do not show any membership whatsoever in the active inclusion type, as they have no adherence to at least one of its four dimensions (which is often adequate income support, see table 3).
- There is a broad range of ALMP available to MIP recipients and participation rates are not suspiciously low (Marchal and Van Mechelen 2013).
- Lithuania and Slovakia combine stark financial incentives and behavioural conditions with affordable and broad based services .
- In both countries minimum wages are inadequate; nonetheless the very low MIP benefits still ensure a large financial incentive.
- This paper assessed the potential of the principles outlined in the European Commission’s 2008 Recommendation on the active inclusion of people excluded from the labour market to structure a fine-grained classification of activation strategies in European minimum income schemes.
- Even these countries do not perform well on each and every dimension of active inclusion.
- The findings leave little doubt on three things.
- This should advance decent MIP and quality services on national welfare states’ political agenda as well as promote convergence towards a broad conception of active inclusion across the different EU Member States.
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