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The Swedish model for aid to job seekers


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Presentation by Anders Forslund, Assistant Director-General, Professor, (Authority for Research on Labour market issues) on the occasion of the EESC conference on A labour market for all: efficient and innovative assistance to jobseekers, in Stockholm, Sweden

Published in: News & Politics, Career, Business
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The Swedish model for aid to job seekers

  1. 1. The Swedish model for providing aid to job seekers Anders Forslund IFAU and Uppsala University 1
  2. 2. Providing aid to job seekers – the institutions• Collective agreements between social partners provide aid (counselling, training etc.) when employees receive advance notification of lay-offs• Public employment service (PES) provides unemployed job seekers with job search assistance and active labour market programmes (ALMPs)• Unemployment insurance, complemented by collective agreements, provide (some) unemployed job seekers with financial aid 2
  3. 3. Collective agreements – notified workers• Collective ”security” agreements cover white- and blue-collar workers in private sector and central and local government employees• Basic principle: offer aid already before start of unemployment spell; aid given by specialized agencies funded by the social partners through agreements 3
  4. 4. Unemployed workers: Public employmentservice (PES)Swedish PES has a number of functions:• Offer coaching and job search assistance; monitoring search behviour• Offer vocational training programmes, job practice programmes and subsidised employment• Collect and make available information on vacant jobs and job seekers• Recently, rapid increase in private provision; PES buyer of services (coaching etc.) 4
  5. 5. Registration Job ready? No Yes Which programme? Job search assistance? No Yes Training Practice; Job search Coaching Wage subsidy Follow up Job No Job De-registrationPES process
  6. 6. But also…• Young unemployed (< 25 yrs): after approx. 3 months ”Job guarantee for young”. Compulsory programme with job search assistance (phase 1) and (possibly) other programmes (phase 2)• Older unemployed (>24 yrs): after approx. 14 months ”Job and development guarantee”. Compulsory programme with job search assistance (phase 1), (possibly) other programmes (phase 2) and ”socially beneficial work” (phase 3) 6
  7. 7. Unemployment and programme participation(excl. subsidised employment) 1996–2010 450,000 400,000 350,000 300,000 250,000 Unemployed 200,000 Programmes 150,000 100,000 50,000 0 7
  8. 8. Evaluations of Swedish ALMPsSome major conclusions:• The closer a programme is to regular employment, the better for the participant• The closer a programme is to regular employment, the more severe are crowding out problems; targeting necessary• Results vary a lot• Job search assistance/monitoring generally found to be effective 8
  9. 9. Unemployment insurance (1)• Rules for UI are regulated by law and UI system predominantly tax financed• Insurance run by around 30 independent organisations, UI funds, most of which have close ties to trade unions• Membership, necessary for income related benefits, voluntary. Until recently, membership close to 90 % of the labour force; membership declined rapidly after recent reforms with much higher membership fees 9
  10. 10. Unemployment insurance (2)• For income-related benefits: UI fund membership for at least 12 months and in addition a work requirement• Furthermore, the unemployed must be job ready, actively looking for a job and prepared to accept a suitable job offer• Job search behaviour monitored by case workers at the PES and violations may lead to sanctions 10
  11. 11. Unemployment insurance (3)• UI fund non-members who meet work and job search requirements, entitled to fixed daily benefit; substantially lower than maximum income-related benefit; otherwise social assistance• Benefit eligibility 300 benefit days (420 calendar days; benefits paid five days a week)• Replacement rate 80 % first 200 benefit days; 70 % until day 300. After this, 65 % of previous income conditional on entering Job and development guarantee 11
  12. 12. Unemployment insurance (4)• System is, however, much less generous for most unemployed: maximum daily benefit fairly low• Also number of supplementary insurance programmes through collective agreements between social partners• Information on these agreements scattered, hence knowledge about the exact conditions for unemployed persons limited 12