Managing Labour Market Transitions and Risks
Chapter 7: New Forms of Governance in Labour Market Policy: Are there any Limits to Privatisation?
7. New forms of governance in labour market policy: Are there any limits to privatisation? We have enough bread. We need laws! (Chinese students protesting in Tiananmen, Beijing, June 1989) ‘Activating’ the unemployed and ‘privatising’ public employment services are often thought of as panaceas for the diﬃculties of achieving full employment. The intention of this chapter is to give these concepts analytical foundations and to highlight related dangers and limits. I argue that the negligence of implementation failure explains many of the disappointing results of studies evaluating active labour market policy (ALMP). Only their systematic consideration improves the eﬀectiveness of ALMP. Failure of proper targeting is another reason for the poor eﬀects of many labour market programmes. Acknowledgement of this failure leads to the suggestion of directing labour market policy towards transitional labour markets. Two facts in particular bear on this area of policy. First, people wish to move during their life course between various forms of productive activities of which gainful employment may be the most important alternative, but not the only one. Second, people have to change jobs or their occupation and skills during their life course. If one accepts these two facts, then labour market policy in Europe must target a larger opportunity set of activities. Firms, too, have an interest in ‘breathing’ with respect to their workforce. As mentioned in preceding chapters, the goals of making work pay and making transitions pay should guide modern labour market policy. However, the original meaning of...
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