Why Countries ‘Get Tough on the Work-Shy’: The Role of Adverse Economic Conditions

Abstract

There has been a clear trend toward greater conditionality and coercion in labour market and social policy in recent decades, a key part of which is tougher sanctions for unemployment benefit claimants who refuse offers of employment or otherwise fail to comply with their obligations. Our understanding of this trend and its determinants is so far built only on a corpus of small-N evidence, while systematic comparative large-N analyses are lacking. As a result, the broad patterns of policy change and their general political drivers remain underexplored. This paper fills this gap by examining unemployment benefit sanction reforms in 20 democracies between 1980 and 2012 using an original dataset. It is shown that governments introduce tougher sanctions in order to reconcile two competing pressures that arise during economic downturns: an increased need for social protection and reduced fiscal revenues. The findings, which are also applicable to other historical periods and policy areas, provide an impulse for future comparative large-N research on ‘demanding activation’ policies.

Punitive welfare reform and claimant mental health: The impact of benefit sanctions on anxiety and depression

“…Claimants have come under greater pressure to conform to job‐search requirements and accept potential employment, enforced through sanctions for repeat refusals of work. Amongst this overall trend, Knotz (2019) highlights Austria, Finland, Ireland, Italy, Sweden, and the UK as countries that have experienced notable increases in the strictness of sanctions, though rarer instances of decreases have nevertheless been observed in Australia, Germany and New Zealand.…”

Labor Market Conditions and Partisan Voting: How Unemployment Hurts the Left

“…Thus, I show that unemployment will generate a tug-of-war over social spending between haves and have-nots, as a weak labor market reduces tax revenues at the same time that social expenditures increase. Moreover, social spending is often cut during recessions (Knotz 2018). According to some scholars, moreover, retrenchment in class-based social expenditures such as unemployment benefits follows a partisan pattern, in that right-wing governments make deeper cuts (Bandau 2017).…”

Determinants of public employment services: exploring the relationship between benefit conditionality and partisan politics

“…A key justification for 'demanding' activation is cost-containment. With respect to unemployment insurance, countries thus impose stricter conditions to receive benefits, and stricter sanctions, ie., reduced or rescinded benefits, when the unemployed fails to comply to, eg., job-search requirements, in effort to reduce costs during periods of high unemployment (Bengtsson, de la Porte, & Jacobsson, 2017;Huber & Stephens, 2001;Knotz, 2019;Rueda, 2015).…”

“…While the development towards activation partly relates to changes in how the deservingness of the unemployed are perceived (eg. Clasen & Clegg, 2003;Schumacher, Vis, & Van Kersbergen, 2013;Van Oorschot, 2000), a key rationale behind stricter conditionality and sanctions of benefits have been to reduce costs of social protection in face of austerity (Bengtsson, de la Porte, & Jacobsson, 2017;Huber & Stephens, 2001;Knotz, 2019). While some studies indicate that monitoring can be a cost-effective option (Boone et al, 2007;Raffass, 2017), others argue that expanding systems of monitoring and sanctions can be associated with substantial costs (Eichhorst & Konle-Seidl, 2008, p. 427;Watts & Fitzpatrick, 2018, p. 9).…”

“…While some studies indicate that monitoring can be a cost-effective option (Boone et al, 2007;Raffass, 2017), others argue that expanding systems of monitoring and sanctions can be associated with substantial costs (Eichhorst & Konle-Seidl, 2008, p. 427;Watts & Fitzpatrick, 2018, p. 9). Although recent comparative studies show that partisan politics seems to be unrelated to the development of 'demanding' activation as such (Knotz, 2019), whether increased conditionality contributes to reduced or increased expenditures on PES is still unclear. If the development towards more 'demanding' activation take precedence over political preferences, it also suggests that in order to better understand the role of partisan politics, the analysis of resources devoted to PES should incorporate activation as well.…”