Tomáš Sirovátka and Václav Kulhavý

1. The Pitfalls of Activation Policies in the Czech RepublicPaper to the ASPEN – ETUI-REHS and Masaryk University conference‘Activation as security ?’Brno, March 20-21, 2009 Tomáš Sirovátka and Václav Kulhavý

2. Summary • the Czech approach to activation : • from late nineties a ‘hybrid’ activation approach slowly emerged which combined disciplinary measures with the economic incentives and weak active measures • after 2004 rather disciplinary approach has been developed (much continuity with the communist regime) • influenced byinstitutional legacies, new social realities and policy learning • failures: addressing long-term unemployment ? targeted? individualized ? meeting needs ?

3. Regimes of activation in the EU • ‘activation paradigm’ (Serrano Pascual 2007) – core of the ‘new welfare state settlement’ (Taylor-Gooby 2008) • consensus about employment targets but significant variations in policies • Esping-Andersen(1990), Gallie and Paugam – ‘(un)employment regimes’ (2000) • liberal approach versus the universalistic approach(+‘third approach‘ ?)(Barbier 2004, 2007); employability versus capability approach (Bonvin and Farvaque 2007); social disciplining versus social integration approach (Larsen and Mailand 2007)

4. Differences within regimes • Serrano Pascual (2007): even the work-first approach may employ different strategieslike economic springboard, disciplining measures etc., more elaborated typology • In reality different measures are often combined: disciplining measures, economic incentives, support in job-search, access to jobs, development of capabilities… • Reforms in CEE and layering of measures • Czech approach ?? (and the problem of long-term unemployment)

5. The communist legacy of activation • communist countries - ‘pioneers’ in activation policies • able-bodied prime age men and single women have been obliged to work by law + social security system was a tool to activate the ‘labour reserves’ • CR maintained a highly punitive system of labour discipline (low pensions, mat.,par. leave ben., benefits, access to disab. pensions, controls) • ‘who does not work does not need to eat’.

6. Czech Republic after 1989 • policy to avoid high unemployment by means of deliberate anti-bankrupcy policy (e.g. Vanhuysse 2006), ‘bank socialism’ • + relative generous social safety net • not much effort in ALMP • neoliberal discourse versus pragmatic policy = blaming the unemployed • Opinion on causes of poverty: individual causes - bad lack and laziness prevail over the social causes – 56 % to 34 % while in average for EU-27 this is reversed: 39 % to 50 % (Eurobarometer 2007)

7. New disciplining and making work pay measures after 2004 • Accession + EES as a catalyst • The Employment Act from 2004: increased conditionality, restricted access (the youth)+ making work pay measures • Stricter definition of suitable job (temporary, part-time, any qualification), temporary job half min.wage compatible with UB • Delayed revaluations of living minimum (LTU)

8. Benefits for long-term unemployed or social assistance claimants(RR)

9. New activation measures • Since 2007: ‘existence minimum’ about 2/3 of the living minimum for a single person • adult children and parents sharing accommodation are considered a household • only 70 % of income from work and 80 % of income from sickness and unemployment benefits is taken into account (but no impact) • August 2007: automatic revaluation of subsistence and existence minimum was cancelled • September 2008: unemployment benefits provided only 5 months • after 5/11 months obligation of the Individual Action Plans

10. Ambiguous impacts • in 2007 and 2008 more than quarter of the outflows from registers represented the unemployed excluded due to misconduct • in 2004 it was (similarly like in the previous years) only about 11 per cent • This explains the diminished share of the long-term unemployed in registers in 2008 • often they re-register after the period of six months • LFS data still document high share of long term unemployment - about half of unemployment stock, with little change

11. Activation through support of access to jobs and capabilities • active labour market measures have never been much developed (about 0.12-0.13 % of GDP) • during 2006 and 2007, the projects of ESF enabled to increase the relative numbers of the ALMP participants from 19% to nearly 32% and then 39 % of unemployment stock • in 2008 the trend has been reversed towards the former level (24%) • ESF rather replacing the national measures (54% in 2007, 35 % in 2008) – missed opportunity ?

12. Poor targeting (creaming off) • PES obliged Local Employment Offices to meet the quantified targets since 2005 (ALMP ‘targeting‘) • the set targets for 2006 and 2007 below ‚thresholds‘/lack ambition: to include 30% of unemployed for more than 6 months (there were twice as higher share in the registers!), 20% of unemployed of more than 50 years of age (there were above 30% in registers) and 25% unemployed up to the age of 25 years (which equals their share among the unemployed)

13. Poor targeting II • Kulhavý and Sirovátka (2008) assessed targeting of the measures in 2006 with use of database of the individual data • the unemployed with only elementary education in comparison compared with those with complete secondary education have nearly four times as low chance to participate in training and seven times lower chance for support in self-employment programmes • LTU (total duration) have fifty times as low chance when compared with the short-term unemployed people (up to 6 months) to participate in training programmes

14. Individualization (action plans) - guaranteed service or disciplining measure ? • IAPs in 2004 - intended both as a guaranteed service as well as disciplining measure • the new Employment Act (2004) obliged all Employment Offices to offer the IAP to every unemployed below 25 years • Voluntrary participation (but sanctioning)

15. Individualization (action plans) • goal to include high numbers of the unemployed into IAPs • beyond the capacity of available staff • EOsimmediately deviated from this target • rationing the resources in favour of the more motivated unemployed • stopped urging IAPs to be signed • narrowing and changing profile of target group • NAPE target 25,000 IAPS in 2006 failed totally

16. Individualization (action plans) – falling numbers

17. Towards obligatory IAPs • the formal approach of the Employment Offices has prevailed (signature of the contract, reporting standard job-mediation process) • still great variations in implementation of IAPs • since September 2008 - after 5/11 moths of unemployment the EOs obliged to elaborate the Individual Action Plans • failure to fulfil the obligations or refusal of IPA imply removal from register • shift towards formal and disciplining approach ?

18. The unmet needs of the ‘to be activated’ ? • 2008 - a survey with a special sample of 1,200 people considered in ‘uncertain position’ in the labour market • The unemployed reflected strongly the need of participation in the ALMP measures: 44-47% expressed strong interest in participation, 30-32% some interest in participation • real participation rate was above 20 %

19. The unmet needs of the ‘to be activated’ ? • Strong self-reflection of the individual deficits: - need skills and qualification - 41 % in case of STU and 55 %in case of LTU consider that as (very)important deficit - inability to negotiate with employers - 34 and 52 % consider that as (very)important deficit) - poor orientation in the labour market - 32 and 50 % consider that as (very)important deficit

20. Conclusions • Activation is not a new strategy in post-communist countries • With transition to market democracy, Czech Republic has rather preferred the strategy of de-activation (de-mobilisation) in order to soften the pressures on the labour market while establishing the effective social safety net • But strong neoliberal policy discourse dominated which influenced public opinion and policy makers

21. Conclusions II • late nineties - ‘hybrid’ activation approach (disciplinary + economic incentives + weak active measures improving skills) • disciplinary measures have been developed further and stronger in recent years • findings on subjective experiences - activation should be more ‘supportive approach‘ • lasting continuity of the disciplining approach, underpinned with discourse on moral failures of the unemployed