Transforming the Dutch welfare state: Social risks and corporatist reform 9781847429643

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Transforming the Dutch welfare state Social risks and corporatist reform

Mara A. Yerkes

TRANSFORMING THE DUTCH WELFARE STATE Mara A.Yerkes

First published in Great Britain in 2011 by The Policy Press University of Bristol Fourth Floor Beacon House Queen’s Road Bristol BS8 1QU UK t: +44 (0)117 331 4054 f: +44 (0)117 331 4093 [email protected] www.policypress.co.uk North American office: The Policy Press c/o International Specialized Books Services 920 NE 58th Avenue, Suite 300 Portland, OR 97213-3786, USA t: +1 503 287 3093 f: +1 503 280 8832 [email protected] © The Policy Press 2011 British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data A catalog record for this book has been requested. ISBN 978 1 84742 963 6 hardcover The right of Mara A.Yerkes to be identified as author of this work has been asserted by her in accordance with the Copyright, Designs and Patents Act 1988. All rights reserved: no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior permission of The Policy Press. The statements and opinions contained within this publication are solely those of the author and not of the University of Bristol or The Policy Press. The University of Bristol and The Policy Press disclaim responsibility for any injury to persons or property resulting from any material published in this publication. The Policy Press works to counter discrimination on grounds of gender, race, disability, age and sexuality. Cover design by The Policy Press. Front cover: image kindly supplied by istock.com Printed and bound in Great Britain by TJ International, Padstow. The Policy Press uses environmentally responsible print partners.

Contents Preface

iv

one Introduction

1

two

Changing social risks, changing risk protection?

21

three

Sickness and disability reform in the Netherlands

41

four

Collective childcare protection: the new workfare

75

five

Employability: lack of clarity, lack of protection

107

six

Transforming the Dutch welfare state

139

Appendix 157 List of abbreviations 165 Index 167

iii

Transforming the Dutch welfare state

Preface Since the mid-1990s, the Netherlands has received international acclaim for the success of its welfare state reforms and macroeconomic performance, leaving commentators and academics alike to refer to it as ‘the Dutch miracle’.This book takes a look at what has transpired since the mid-1990s, focusing on the ability of the Dutch corporatist welfare state to address changing and emerging social risks. The intention is to provide a comprehensive account of welfare state developments that are significant beyond the borders of the Netherlands by demonstrating the dramatic changes that have taken place in the response to old and new social risks. The empirical data that form the basis for this book are the outcome of part of a larger research project on Labour, Firms and Social Security, financed by the Dutch GAK Foundation (Stichting Instituut GAK). Many thanks to all of the researchers involved in this project, in particular Romke van derVeen, Hans Pruijt and Pascal Derogee for their contributions to this research.The project also relies on data from trade union FNV’s collective agreement database Ducadam. Thank you to Katinka van den Akker for answering all my questions about the data and providing updates along the way. I am also grateful to a number of colleagues at the Department of Sociology, Erasmus University Rotterdam for their comments on various stages of this project, in particular Kea Tijdens, Bram Peper and Judith Raven, as well as colleagues from the I3 Research Cluster at the Amsterdam Institute for Social Science Research. Thank you to Trudie Knijn for extensive comments on an earlier draft of the manuscript. This research would not have been possible without the cooperation of all those who agreed to be interviewed for this project. Many thanks to them all. In addition, the research would have taken much longer to complete without the assistance of Marco Veenstra, who helped schedule and transcribe the interviews and helped to create the database of policy documents. A special thanks goes to him for all his assistance. This research project has been five years in the making. Many people have contributed to its development and completion, too numerous to mention, so to anyone I may have missed – thank you. Lastly, any errors or omissions in the text are entirely my responsibility.

iv

ONE

Introduction with Romke van der Veen

This book is about the perception and management of social risks in a corporatist welfare state. Using the Netherlands as its backdrop, it provides a primarily qualitative, in-depth case study of the perception and management of different social risk forms: disability, childcare and insufficient employability. More specifically, this book deals with the perceptions of these risks by political, social and economic actors in welfare provision: political parties, state policy makers, trade unionists and employers, the consequential management of these risks within the corporatist context and what this says about the collective nature of social risks in the Dutch welfare state. The book demonstrates that the Dutch corporatist welfare state has the capacity to respond to changing and emerging social risks using existing institutional structures, resulting in new forms of welfare and a transformation of the welfare state.

Changing social risks The concept of risk is not limited to sociological or social policy studies, but is used across different policy areas. Within sociology, the origin of the word risk is often traced to the German scholars Beck (1992) and Luhmann (1993).1 Luhmann defined risk by contrasting it with the term danger; danger being attributable to nature and risk being attributable to social action (Blom and Nijhuis, 1996). While this distinction is necessarily a simplification of a complex term, the study of Luhmann’s work by Blom and Nijhuis outlines how this simpler definition lies at the heart of Luhmann’s constructivist notion of risk. Taylor-Gooby and Zinn (2006), on the other hand, define risk as an uncertainty of outcomes. In this case, certainty is the opposite of risk. Uncertainty arises when individuals are no longer sure who bears responsibility for risks, which in turn gives rise to a reflexive risk society (Beck, 1992). This book investigates whether actors within the Dutch welfare state perceive risks to be social risks. ‘Social risks are risks that do not result from individual choice but are (also) produced by the social system of production’ (Van derVeen et al, 2011, forthcoming). Individuals who encounter social risks can have difficulty in maintaining a minimum level of subsistence. Social risks can be encountered by individuals at different stages across the life course and they include risks such as sickness, disability, unemployment, old age, care risks and insufficient training or education (employability). Social risks can have collective consequences, for 1

Transforming the Dutch welfare state

example, high levels of unemployment, which can negatively impact the welfare state. But social risks also produce social and economic inequalities, negatively affecting different categories of persons in society, limiting or decreasing their access to the labour market and increasing their risk of poverty. An essential function of the welfare state, then, is to provide collective protection against social risks through public means. The welfare state can provide riskpooling collective social insurances to overcome collective action problems. While there are disadvantages to forms of collective action, such as the free rider problem (Olson, 1965), the collective pooling of social risks can help protect against problems of adverse selection (market failure) and information asymmetry (information failure) (see Esping-Andersen, 1999: 38). If not solved collectively, these problems can lead to an unfair distribution of risks among individuals or groups in society as only those individuals who perceive themselves most likely to be affected by a certain risk will insure themselves against it. Other, less risk-averse individuals are likely to forego individual insurance, causing insurance prices to rise for those who need it most. In some cases, such as care risks, however, adverse selection is a structural problem. Women, more often than men, take up the role of caregiver, partially as a result of long-lasting structural gender differences still evident in modern societies (Knijn and Kremer, 1997; Lewis, 2006). These structural differences place an unequal burden of risk sharing on women, making it difficult to insure themselves satisfactorily against care risks on an individual basis. Moreover, as social risks continue to change, informational failures are more likely to take place, as neither the insured nor the insurer can have perfect information on who is most likely to encounter certain risks, and when. The collective protection of social risks is a means of preventing these informational or market failures. The occurrence of an informational or market failure is complicated by the interdependence of social risks (Goodin, 1998). With social risks, the situation is not one of winners and losers, where the costs of the losers can be fully covered by premiums paid by the winners; all individuals can be affected, and an effective insurance against these risks requires a collective response.To avoid these problems, the state can provide and/or (partially) finance a collective insurance against social risks. In this manner, the underlying principles of social policy – solidarity, equality and social justice – are preserved (Taylor-Gooby, 2004b). In industrialised society, collective social risk protection was centred on risks that could lead to an interruption of the family wage (Esping-Andersen, 2002; Taylor-Gooby, 2004a). In many welfare states, risk protection policies were based on contributory schemes, where social insurance contributions were dependent upon the size of the actively employed population. During the industrial age, most citizens reasoned they might one day need these services (Achterberg et al, 2010; Taylor-Gooby, 2004a), creating a strong sense of solidarity underlying social risk protection, one strengthened by mutually supportive institutions, including not only the welfare state but also Fordist employment structures and stable, nuclear families (Beck and Lau, 2005). 2

Introduction

This type of solidarity as it existed in industrial societies has changed in postindustrial societies (Achterberg et al, 2010), and so have social risks (Elchardus et al, 2003).Two institutions – the family and the labour market – are no longer capable of providing the basic welfare guarantees previously assumed to be within their capacity (Esping-Andersen, 2000). Changes in employment, including the decline in industrial and manufacturing jobs, the increase of service sector employment, increased international competition, the rise in part-time and temporary work and problems of structural unemployment have produced significant changes in the constellation of social risks (Elchardus et al, 2003; Esping-Andersen, 2002; Hacker, 2004; Taylor-Gooby, 2004a). Simultaneously, the increasing complexity of modern families, including increased divorce rates and an increase in lone parenthood, women’s advancement in education and the increase in women’s labour market participation have blurred the boundaries between the family and the labour market, producing new social risks related to the combination of work and care, further contributing to the risk of inequality and poverty. ‘New social risks are the risks that people now face in the course of their lives as a result of the economic and social changes associated with the transition to a post-industrial society’ (Taylor-Gooby, 2004a: 3). In particular, these social and economic developments have intensified the link between education and employment, putting low-skilled and lower-educated individuals at an increased risk of poverty (Elchardus et al, 2003; Esping-Andersen, 2002; Taylor-Gooby, 2004a). What makes social risks in the post-industrial age different from social risks during the industrial period is that social risks today affect a greater number and different categories of people; if risk protection is absent, individuals are now at an even greater risk of poverty and inequality. Second, risks of the modern welfare state already affect people in younger stages of their lives. Risks are no longer concentrated at the middle to the end of the life course. Rather, individuals immediately face risks in their attempts to enter the labour market and to reconcile work and family life (Bonoli, 2005). Third, new social risks are more problematic for minorities or groups lacking sufficient access to training or education, particularly given the increased importance of education in a post-industrial knowledge society (Taylor-Gooby, 2004a). The growing focus on lengthy educational trajectories and an emphasis on individual responsibility in obtaining an education places low-educated individuals or individuals with outdated skills in an increasingly precarious position (Elchardus et al, 2003). Elchardus and colleagues argue that ‘passive’ welfare states are unable to address this issue and welfare states focused on activation lead to an exacerbation of the issue. Lastly, as noted above, these social and economic developments have led to a blurring of the public/private divide, involving both family life and the labour market, which raises issues about work–life combinations (Taylor-Gooby, 2004a). In sum, changes to social risks have led to changing manifestations of inequality. Alongside the social risks protected against in industrial society in Western welfare states, including sickness/disability, old age and unemployment, individuals in the 3

Transforming the Dutch welfare state

modern welfare state are also faced with risks associated with blurred work–family boundaries (including child and elder care) and decreasing skills or insufficient schooling or training (insufficient human capital or employability). How are these risks perceived within the welfare state? Are they also perceived and managed as collective social risks? Whether or not a collective response emerges for the protection of ‘new’ social risks in the same manner as for ‘old’ social risks is an issue central to this study. The primary argument outlined in the coming chapters is that the protection afforded to individuals who face either new or old social risks is not singularly dependent upon the timing of post-industrialisation (Bonoli, 2007), the ability of groups to mobilise themselves or the size of the group affected by a given social risk (Taylor-Gooby, 2004a) but also on the ability of existing institutions to respond to these risks. As the coming chapters will show, this response to social risks is based on an underlying delineation of social rights in the Dutch welfare state. Welfare state arrangements such as social security, health care or housing define the social rights of citizens (Marshall, 1950). Social rights, as defined in any given welfare state, can be more or less universal, more or less comprehensive and more or less generous. As noted by Wilensky, in essence, ‘the welfare state is government protected minimum standards of income, nutrition, health, housing and education assured to every citizen as a political right, not as charity’ (1975: 1; emphasis added, MY). Welfare states differ in the way in which these individual rights to welfare are defined (Esping-Andersen, 1990) as well as in the way in which the state, the market or a third party share the burden of social risk protection (Esping-Andersen, 1999; Orloff, 1993). The Dutch response to changing and emerging social risks shows that two mechanisms delineate social rights in the Dutch welfare state: workfare and welfare. While the concept of workfare is frequently used to refer to obligations attached to social assistance programmes, the use of the term workfare here is intended to be broader than the often neoliberal context of welfare-to-work programmes. Under a workfare regime, social assistance is only provided on the condition that the recipient works in return for assistance.The use of the term here is more comprehensive, referring to all policies meant to improve employment that include obligations for recipients. In other words, workfare denotes a shift to new forms of welfare that emphasise employment (recommodification) and activation. In the literature, similar developments have been termed a shift towards a social investment state (Esping-Andersen, 2000), an enabling state (Gilbert, 2005) or new welfarism (Taylor-Gooby, 1997). A welfare mechanism, in contrast, refers to traditional collective protection provided by the welfare state. Collective protection for social risks can take on different forms: collective protection through public means (that is, welfare state protection or public welfare), collective protection through collective agreements or employer-related benefits (occupational welfare, see Rein, 1982) or some combination thereof. The focus in this book is on these forms of collective welfare and their interaction. In the Dutch welfare state, citizens are entitled 4

Introduction

to collective public welfare when they are not held individually responsible for a social risk. Workfare, in contrast, is collective protection, either public or occupational welfare, used to improve the labour market participation of targeted groups within the welfare state. This dichotomy of social rights is evident in the Dutch response to changing and emerging social risks and has led to institutional change (Yerkes and van der Veen, 2011) and the transformation of the Dutch welfare state.

Modern welfare states and social risk differentiation While welfare states vary in their approach to social rights and citizenship, they share evolutionary characteristics. The development of welfare states is distinguished by three phases: welfare state formation and expansion, welfare state reform and retrenchment, and a current phase of modernisation in contemporary welfare states (Pierson, 2001). During the ‘golden era’ of welfare state expansion, up until the mid-1970s, social risk protection was centred on risks associated with the traditional male breadwinner model within an industrial society (Lewis, 1992). Dominant explanations for this first period of welfare state development include arguments based on politics and class interests (Hicks and Misra, 1993). Driven by class cleavages, social democratic parties were seen as the champions of the welfare state, providing an expansion of the public sector, whereas Christian democratic parties relied on large transfer payments to male breadwinners (Huber et al, 1993). Cross-national variation in social risk protection could then be explained through differences in party politics, class interests and the strength of each of these groups to mobilise and realise their interests. This power resources perspective, referred to as ‘old’ politics, effectively explained social protection in an era of welfare state expansion (Korpi, 2006; Pierson, 1996). But, as convincingly argued by Pierson, the focus on ‘old’ politics, or the strength of trade unions and left-wing political parties, could not account for changes in social protection that occurred after the ‘golden era’ of welfare state expansion, when oil crises, rising unemployment and high inflation forced governments to roll back welfare state policies and benefit levels during the 1970s (Pierson, 1994; 1996). Following the ‘golden era’ of welfare state expansion, the distribution of power between capital and labour shifted, bringing about change in social and welfare state institutions (Korpi, 2006) and a new phase of welfare state development: retrenchment. The often-used political and sociological explanation for this period of welfare state reform and retrenchment has been classified as a ‘new’ politics argument.2 In contrast to ‘old’ politics explanations that focused on leftwing parties and the mobilisation of the working class (Huber et al, 1993; Korpi, 1983),‘new’ politics explanations emphasise the path dependency of welfare state institutions and increasing returns, or the positive feedback effects of welfare state policies that ensure their longevity (Pierson, 2000). In essence, the politics associated with retrenchment differ from the politics of expansion. ‘The latter was about claiming credit for popular initiatives and the former is about avoiding 5

Transforming the Dutch welfare state

blame’ (Green-Pedersen and Haverland, 2002: 44) in particular, for the reform or retrenchment of these popular policies. We are no longer in a phase of welfare state retrenchment. Although retrenchment continues to take place, in the current phase of welfare state development we are witnessing a clash between the push for continued welfare state retrenchment and high levels of welfare state popularity (Achterberg et al, 2010). This new phase of welfare state development is particularly characterised by the presence of new social risks, affecting different groups of individuals, and taking place within a changing context, both economically and socially. Whereas the second phase of retrenchment and reform meant adjustment to the issue of fiscal austerity, this new, third phase is defined by a continued adjustment of ‘old’ social risk policies under pressure of fiscal austerity with a shift towards increasingly selective and decreasingly universal social rights.This is now further augmented by a pressure to respond to ‘new’ social risks, a consequence of changed sociocultural and economic circumstances.The generosity of many post-war European welfare states has made it difficult to adjust to these changed circumstances while simultaneously dealing with cost increases from ‘old’ social risks (Bonoli, 2007). Traditional welfare state provision was intended to cover risks associated with a single breadwinner model. A loss of income that could result due to unemployment, sickness, disability or old age would put an entire family at risk for poverty and the welfare state was there to protect against this possibility. Moreover, ‘old’ social risks could often not be anticipated, and in many cases, were perceived to be beyond the control of the individual, explaining the often-used term given to these risks: ‘external risks’ (Giddens, 1998). In this new phase of welfare state development, social risks are more complex. The changing context of a decline in Fordist employment structures and strong, nuclear families (Beck and Lau, 2005) alongside the exponential increase in women’s labour market participation (Crompton, 2006; Rubery et al, 1998) makes risks in modern welfare states considerably more complex than three decades ago (Bonoli, 2005). Even the terminology for risks faced by today’s labourers differs; Giddens introduced the concept of ‘manufactured risks’ (1998), whereas others refer to ‘new’ social risks (Bonoli, 2005; Esping-Andersen, 1999). The term manufactured risk entails an element of individual choice, thereby generating the idea that individuals carry an increasing responsibility for the occurrence of these risks, such as raising children, caring for the elderly or the desire to supplement one’s education.The term new social risk, on the other hand, implies that the risks associated with modern societies did not exist prior to the social, economic and demographic changes that have taken place during the last three decades. Both ideas are questionable. On the one hand, a number of risks were previously absorbed by the family and women in particular, such as child and elder care.3 With the increase in women’s labour market participation and the changing context of modern-day families, welfare states can no longer assume that families will be able to provide coverage of these risks. On the other hand, some social risks are 6

Introduction

indeed new, because they are a part of modern, post-industrial societies. These risks are not as visibly defined by class interests or path dependent institutions as ‘old’ social risks. Summing up, the 20th century welfare state has transformed into a modern welfare state, defined by a different set of characteristics. Following the decline of Fordist employment structures and the increase in complex family structures, an increase in female labour market participation and increased individual responsibility for education and training across the life course, modern welfare states are defined by the presence of new social risks, which affect different groups of people occurring in a changed economic and social context. These welfare states are also defined by the clash between welfare state austerity and welfare state popularity, affecting the protection of old social risks and the ability of welfare states to respond to new social risks. It is within this context of modern welfare states that we evaluate social risk protection in the Netherlands.

Industrial relations and the revival of corporatism To understand social risk protection within the welfare state, it is also important to understand developments in industrial relations. The interdependence between these two fields arises from the fact that ‘organized industrial relations and the welfare state share the purpose of containing the risks arising from the “commodification” of labour’, a common purpose which ‘results in functional interdependencies and mutual externalities’ (Brandl and Traxler, 2005: 635). In European countries where the welfare state relies on coordinating policies in concertation with organised interests, these interdependencies are all the more apparent, particularly in corporatist welfare states, where the state shares its public order function with organised interests (Traxler, 1999) in a form of political exchange. Just as with the development of the welfare state, the functioning of industrial relations structures in the welfare state and theoretical explanations for this have changed over time. In the late 1970s and early 1980s, corporatist theory emerged as one means of explaining the relationship between industrial relations systems and political environments (Baccaro, 2003).At the time, theoretical studies focused primarily on the distinction between corporatist institutional structure and corporatism as a policy-making process, while empirical studies showed a close link between the two (den Dulk, 2001). In other words, proponents of corporatist theory believed corporatist structure was a prerequisite for corporatist policy-making (Baccaro, 2003). This assumption no longer holds (Hassel, 2003) because recent studies have shown evidence of corporatist policy-making even in the absence of corporatist institutions, for example in Ireland, Italy and Greece (Baccaro, 2003). Moreover, during the 1970s, corporatism was viewed primarily as a political exchange (Streeck and Kenworthy, 2005), whereby governments could compensate unions for policies of wage restraint. Economic crises and the end of Keynesian monetary policy during the 1980s have changed the nature of this political exchange. 7

Transforming the Dutch welfare state

The 1980s was a period marked by decentralisation and differentiation in collective bargaining, and a decline in corporatist decision-making (Visser, 2007). Neoliberal policies, focused on deregulation and the dismantling of trade unions, policies celebrated under Reagan and Thatcher, had the upper hand (Pierson, 1994). Trade unions faced difficult membership losses and trade union density levels began declining in many countries throughout the 1980s, although some cross-country divergence was evident (Visser, 2006). By 1990, trade union density levels had declined to less than 50% in countries such as the US and the UK, but also in Germany, the Netherlands, Spain and France, for example (Van Ruysseveldt andVisser, 1996).The decline in density levels weakened the position of trade unions in many countries, and as certain sectors of the economy became increasingly mobile, the balance between capital and labour shifted heavily in the direction of capital, resulting in a shift in power relations (Siegel, 2005). Despite these developments, corporatist strategies were of renewed interest to scholars during the 1990s (Mailand, 2007) as various forms of policy coordination between the state and employers and/or trade unions became an increasingly popular means of addressing welfare state issues in a number of European countries.This revival of corporatism during the 1990s highlighted the existence of corporatist practices with no prerequisite corporatist structures in place – not only in Italy, Ireland and Greece as noted above (Baccaro, 2003) but in a number of post-communist European countries as well (Avdagic, 2006; see also Palier, 2010). The renewed interest in concertation between organised interests and governments is characterised by two aspects: a focus on the role concertation plays in welfare state reforms and the success (or failure) of recent social pacts.4 Social pacts are a particular form of tripartite concertation, in which the state and the social partners reach an agreement at the centralised level, although the content of social pacts varies widely across countries. One of the main differences between tripartite coordination that dominated industrial relations up through the 1970s and the social pacts of today is that the state now plays a much stronger role in tripartite policy-making. Due to the shift in power relations between capital and labour, ‘Instead of acting as moderators and brokers [...] governments have to take over a role as a “leading” and “steering” negotiator within the process of competitive macroconcertation’ (Siegel, 2005: 113). Recent empirical contributions question the success of social pacts in achieving welfare reform, however (see, for example, Woldendorp and Delsen, 2008). In a study of 20 OECD countries, Brandl and Traxler have shown that social pacts lead to higher expenditures due to a politicisation of wages. ‘Hence, the widely assumed potential of social pacts for welfare state reforms has been exaggerated’ (2005: 635). Other authors have argued that it is a question of complex causality, and that the assumption that social pacts lead to welfare state reforms is exceptionally problematic (Siegel, 2005). The current preference some states have for corporatist policy-making has been attributed to the presence of politically weak governments (Baccaro and Simoni, 2008). Concertation is seen to help mobilise consensus and expedite 8

Introduction

the policy process when governments are politically weak. Visser (2007) draws similar conclusions, arguing that governments are forced to seek the support of the social partners in their reform efforts due to insufficient political support, a move that can delay and weaken reforms. Ebbinghaus and Hassel (2000) maintain that concertation is a useful tool for governments in their quest for reform because policy fields are interdependent and seeking out the social partners addresses the need for consensus and coordination across social policy fields. This book shows that not only do the social partners create a broader base of support for welfare reform, but that corporatist institutions, not limited to social pacts, provide the state and the social partners a means for responding effectively to changing social risks. In doing so, this study addresses a lacuna in the current literature. In the vastly growing literature that investigates social risks and welfare state responses (Bonoli, 2007; Esping-Andersen, 2002; Taylor-Gooby, 2004a), cross-country comparisons have highlighted the variation in risk protection across welfare states (see, for example, Brandl and Traxler, 2005; Siegel, 2005). Studies have also investigated the role of third-party actors in welfare provision, including employers (Hacker, 2004) trade unions (Trampusch, 2007) and NGOs (Lacey and Ilcan, 2006). In addition, there is a growing industrial relations literature on the role of the social partners in welfare state reforms (Baccaro and Simoni, 2008; Ebbinghaus and Hassel, 2000; Visser, 2007). But while collective bargaining institutions are included in analyses of corporatist welfare states, collective bargaining outcomes are often excluded.5 This omission is surprising given the fact that collective agreements can supplement (Trampusch, 2006) or oppose welfare state policies (Brandl and Traxler, 2005). Moreover, despite the related nature of welfare state and industrial relations research, these two fields are often treated separately (Brandl and Traxler, 2005). While industrial relations literature recognises the importance of the social partners, the policy focus is often restricted to wage bargaining or welfare reform. Welfare state policy studies, on the other hand, often underestimate the role of the social partners, yet do take a broader view of policy, including both old and new social risk forms. This book bridges these gaps by providing an in-depth study on how social risk protection has changed within the Dutch corporatist welfare state, focusing on the role of the state, the social partners and collective bargaining institutions. Which social risks are seen to be collective (public) social risks and which are seen to be individual social risks? What type of protection is afforded to social risks within the Dutch welfare state and does this vary across risk forms? To answer these questions sufficiently, an integrated approach that looks beyond the state– market–family triad, in this instance accounting for both the role of the social partners and the importance of collective bargaining institutions (and ensuing collective labour agreement outcomes) is necessary. This integrated approach incorporates the strengths of both welfare state and industrial relations approaches.

9

Transforming the Dutch welfare state

Another ‘Dutch miracle’? The welfare state and industrial relations developments outlined in the previous sections are evident to varying degrees within the Netherlands.The Dutch welfare state has a much younger history in comparison to many European welfare states; most welfare programmes were not fully developed until the 1950s (Van der Veen and Trommel, 1999). Given this late start, the Dutch welfare state developed into a generous welfare state oriented towards passive income replacement schemes and was characterised by a high degree of universalism. At the same time, the Dutch welfare state developed as one identifiably corporatist in nature, with a strong tradition of social partner involvement in policy-making (Visser and Hemerijck, 1997) and policies centred on a male breadwinner model (Knijn, 1994; Lewis, 1992). This combination of characteristics often leads to the classification of the Netherlands as a ‘hybrid’ welfare state (Bussemaker and van Kersbergen, 1994; Esping-Andersen, 1999;Vis et al, 2008). The corporatist nature of the Dutch welfare state can be traced to the postWorld War II period, which was an important time in the development of Dutch industrial relations. Following the Second World War, the government, trade unions and employers shared the common goal of economic recovery.This shared purpose led to the formation of two important corporatist institutions in the Netherlands: the Labour Foundation (Stichting van de Arbeid; StAr) founded in 1945 and the Social and Economic Council (Sociaal Economische Raad; SER) created in 1950 (Nagelkerke and De Nijs, 2003). The former is a bipartite foundation which represents centralised employers and trade unions, while the latter developed as a government advisory council, with roles for employers and trade unions, as well as individual ‘crown’ members, called kroonleden, who sit on the council on behalf of the state, which makes nominations to these council seats emphatically political (see Appendix for more information). Centralised wage bargaining (and wage moderation policy) dominated Dutch industrial relations post-World War II, which proved a successful means for achieving economic recovery. However, the crises of the 1970s and increasing unemployment put pressure on centralised bargaining practices, leading to decentralisation and increasing differentiation in collective bargaining agreements (Nagelkerke and De Nijs, 2003; Van Ruysseveldt and Van Hoof, 2006). By the early 1980s, concertation was constrained – by high unemployment, a weakened position of the trade unions and political struggles between trade unions and employers (Hemerijck, 1996).The state threatened to intervene in wage bargaining processes, which helped push the social partners to cooperate and reach consensus, resulting in the Wassenaar Agreement of 1982 (Visser and Hemerijck, 1997).This agreement, whereby a collective reduction of the workweek and the creation of more jobs during a period of mass unemployment was offered in exchange for wage moderation, symbolised a trade-off between labour market participation (employment creation through working time reduction) and social security (wage moderation). It also marked the starting point of a move towards ‘responsive’ 10

Introduction

corporatism (Hemerijck, 1996) and created an incentive to restructure the Dutch welfare state (Van der Veen and Trommel, 1999). Restructuring was necessary because by the mid-1980s the Dutch welfare state was in trouble. By the late 1970s and early 1980s, in the midst of an economic recession and increasing unemployment, social security expenditures were escalating (see Figure 1.1) (Van der Veen and Trommel, 1999), leading to serious doubts about the efficacy of Dutch welfare state programmes and causing a welfare state crisis (Yerkes and van der Veen, 2011). Disability expenditures were of particular concern and the subsequent far-reaching reforms carried out in disability policy are the best illustration of the intent and extent of welfare state reform at the time (Van derVeen, 2009).The generous benefits offered by disability insurance enabled employers to circumvent strict dismissal rules, thereby disposing of unwanted, and often times more expensive, older workers (Van Oorschot, 2000). Reforms did not take place until the early 1980s, reforms which were limited to modest, programmatic welfare reform. But as the economic crisis abated, the welfare state crisis remained because it was obvious that attempts to limit welfare state expenditures had been insufficient and serious problems remained. Long-term unemployment and sickness and disability claims were spiralling out of control. The ensuing welfare reforms of the 1990s centred on three things: a reduction of administrative discretion, an increase and strengthening of incentives and systemic institutional redesign (Van der Veen and Trommel, 1999). These reforms led to increased control and subsequent retrenchment. The result was a managed liberalisation of the Dutch welfare state by the mid-1990s, whereby reforms were market-driven but the role of the market remained limited or regulated by the state. Figure 1.1: Social security expenditures as a percentage of GDP: the Netherlands and the OECD (1980–2005) 30 25

%GDP

20 Netherlands

15

OECD

10 5

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

1988

1987

1986

1985

1984

1983

1982

1981

1980

0 year

Source: OECD SOCX data, 1980–2005;Yerkes and van der Veen, 2011

11

Transforming the Dutch welfare state

These significant welfare state reforms, in response to the welfare state crisis, were based on the consensus-oriented ‘polder model’ of concertation between the state, employers and trade unions. The reform of the Dutch welfare state was heralded as a ‘Dutch miracle’ by international media including Le Monde and The Economist, praising the turnaround from a ‘welfare without work’ state to a thriving welfare state during the 1990s with spectacular job growth and low unemployment (Visser and Hemerijck, 1997). As Figure 1.1 shows, in comparison to other OECD countries, the Netherlands transformed from a welfare state of high social security expenditures to one with relatively average spending, making the Dutch welfare state one of the more successful examples of welfare state restructuring from a cost containment perspective. In particular, in comparison to other continental European welfare states, the Netherlands significantly reduced social expenditures, resembling the expenditure average of more limited welfare states, such as the UK, rather than the average continental welfare state (Van der Veen, 2009). The subsequent examination of this phenomenon by scholars, the most comprehensive study being that of Visser and Hemerijck (1997), demonstrated that the success of the Dutch model was attributable to gradual changes made to welfare state policy alongside wage moderation and a substantial growth in part-time work. As the authors explain, ‘The “Dutch miracle” represents a case story of a welfare state which is adapting to the new realities of post-industrial working life and family relations’, suggesting that ‘[...] the continental welfare state can be reformed and that it can be done without a “big bang”’ (Visser and Hemerijck, 1997: 180). This book picks up where A Dutch Miracle leaves off, demonstrating how by the mid-1990s the presence of ‘new’ social risks and changes to ‘old’ social risks once again placed pressure on the Dutch welfare state. It analyses how the subsequent development of social risk protection led to a further transformation of the Dutch welfare state. The dynamic nature of social risks has and will continue to put pressure on welfare states to create new policies and to adapt existing risk protection. At the same time, modern welfare states face, in many cases, such as the recent financial problems in Greece, Ireland and Portugal have shown, urgent fiscal and monetary pressures which may limit their ability to respond to these risks (Bonoli, 2007). While domestic pressures of population ageing and low fertility6 have been less significant in the Dutch context up until now, the Dutch welfare state has not remained unaffected by the internationalisation of markets or the effects of European Economic and Monetary Union (EMU) on national fiscal and monetary policy. The projected ageing of the population also means that in the (near) future there will be a greater demand for a sufficient labour supply to bear the costs of social risk protection provided by the welfare state. Moreover, the Dutch welfare state has attempted to move away from its male breadwinner focus, resulting in an increasing number of women joining the labour market (OECD, 2010c), creating new challenges for the welfare state. Currently, the Dutch welfare state is performing well economically. Even with the recent financial and economic crisis, the Dutch economy is recovering and 12

Introduction

expected to perform well in the coming years. Gross domestic product (GDP), which increased by 4% and 2% in the years prior to the recession (2007–8), has bounced back from a 4% decrease in 2009 to a projected 2% annual increase through 2012 (OECD, 2010d). Unemployment, already at an acceptable level prior to the crisis, has not risen above 5%, much lower than the 10% average present in the Euro zone (OECD, 2010a). As noted earlier, successful Dutch macroeconomic performance has primarily been attributed to the Dutch model of concertation between the state, unions and employers alongside wage moderation and a focus on job growth (Visser and Hemerijck, 1997). However, the Dutch labour market is also characterised by high levels of part-time work (Visser, 2002) and a high number of temporary and flexible workers (Houwing, 2010). The result is a flexible labour market capable of responding to changes in the macroeconomic environment.While the legal protection of part-time workers (Yerkes and Visser, 2006) and flexible and temporary workers (Houwing, 2010) has garnered international attention, there are downsides to this approach. Part-time work is highly gendered in the Netherlands (SCP, 2008; Yerkes, 2009) and the success of the ‘flexicurity’ approach, combining a flexible labour market with security for workers, has been criticised as going too far in the direction of flexibility (Houwing, 2010). Both of these issues relate to the perception of ‘new’ social risks. As women are increasingly expected to participate in the labour market, either full-time or part-time, what happens to care responsibilities? If workers are increasingly flexible, moving from job to job on temporary contracts, what happens to the responsibility for continued training and skill development? Moreover, the OECD warns that current budget deficits are threatening the fiscal sustainability of welfare programmes in the Netherlands and low labour utilisation presents problems for the Dutch welfare state (OECD, 2010b). The ability of the Dutch welfare state to respond to social risks within this context is dealt with in the coming chapters.

Outline of the book Based on the changes discussed here, Chapter Two looks at the roles of the state, the social partners and collective bargaining in social risk protection, delineating a number of explanatory mechanisms to be explored empirically in the chapters that follow. Chapter Three is an investigation of sickness and disability policy in the Netherlands.The chapter explores the decollectivisation of an ‘old’ social risk and the ensuing shift in responsibility towards employers and individuals. Chapter Four presents evidence of a collectivisation of a ‘new’ social risk: childcare. Following an initial response to the childcare risk through collective bargaining, the state stepped in, creating semicollective public protection and expanding the welfare state.The final empirical chapter, Chapter Five, deals with the absence of public collective welfare state protection for another ‘new’ social risk, a lack of employability. The continued avoidance of collective protection by the welfare state, however, has not prohibited the development of significant state involvement in employability 13

Transforming the Dutch welfare state

policy. There has been a significant increase in collective protection within collective bargaining as well. The concluding chapter discusses how, in contrast to other Continental European welfare states, the Dutch welfare state has been successful in responding to these changing and emerging social risks, leading to a transformation from a generous but passive welfare state during the 1980s to an active welfare state delineated along the lines of welfare and workfare today. Notes   For a discussion on this topic, see Van der Veen et al (2011, forthcoming).

1

  Not all welfare state scholars are in agreement about the importance of ‘new’ politics and the diminished importance given to ‘old’ politics, however. A study by Kittel and Obinger (2003) that tests these conflicting hypotheses lends credence to both arguments, but ‘new’ politics is seen to offer a slightly better explanation for welfare retrenchment developments. For an overview of this debate, see Green-Pedersen and Haverland (2002). 2

  A limited amount of collective public protection was previously available for care risks, such as social assistance for lone mothers, widow pensions and state-subsidised nursing homes. 3

  For an overview, see Hassel (2003).

4

  Some notable exceptions include den Dulk (2001) and Fagan et al (2007).

5

 Welfare states are often faced with the double demographic pressure of an ageing population combined with decreasing fertility rates. However, in comparison to other European countries, fertility rates are relatively high in the Netherlands (Rijken and Knijn, 2008). 6

References Achterberg, P., Van der Veen, R. and Raven, J. (2010) Omstreden Solidariteit, Amsterdam: Aksant Publishers. Avdagic, S. (2006) ‘One Path or Several? Understanding the varied development of tripartism in new European capitalisms’, MPIfG Discussion Paper 06/5, Cologne: Max Planck Institute for the Study of Societies. Baccaro, L. (2003) ‘What is Alive and What is Dead in the Theory of Corporatism’, British Journal of Industrial Relations, 41 (4): 683–706. Baccaro, L. and Simoni, M. (2008) ‘Policy Concertation in Europe: Understanding Government Choice’, Comparative Political Studies, 41 (10): 1323–48. Beck, U. (1992) Risk Society:Towards a New Modernity, London and Newbury Park, CA: Sage Publications. Beck, U. and Lau, C. (2005) ‘Second Modernity as a Research Agenda:Theoretical and Empirical Explorations in the ‘Meta-Change’ of Modern Society’, British Journal of Sociology, 56 (4): 525–57. Blom,T. and Nijhuis,T. (1996) ‘Risico en Gevaar. Een Blik op Luhmanns RisicoSociologie’, Tijdschrijft voor Sociologie, 17 (2): 275–88. 14

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Bonoli, G. (2005) ‘The Politics of the New Social Policies: Providing Coverage against New Social Risks in Mature Welfare States’, Policy and Politics, 33 (3): 431–49. Bonoli, G. (2007) ‘Time Matters: Postindustrialization, New Social Risks, and Welfare State Adaptation in Advanced Industrial Democracies’, Comparative Political Studies, 40 (5): 495–520. Brandl, B. and Traxler, F. (2005) ‘Industrial Relations, Social Pacts and Welfare Expenditures:A Cross-national Comparison’, British Journal of Industrial Relations, 43 (4): 635–58. Bussemaker, J. and van Kersbergen, K. (1994) Gender and Welfare States: Some Theoretical Reflections, in D. Sainsbury (ed) Gendering Welfare States, pp 8–25. London: Sage. Crompton, R. (2006) Employment and the Family: The Reconfiguration of Work and Family Life in Contemporary Societies, Cambridge and New York: Cambridge University Press. den Dulk, L. (2001) Work-Family Arrangements in Organizations: A Cross-National Study in the Netherlands, Italy, the United Kingdom and Sweden, Amsterdam: Rozenburg Publishers. Ebbinghaus, B. and Hassel,A. (2000) ‘Striking deals: concertation in the reform of continental European welfare states’, Journal of European Public Policy, 7 (1): 44–63. Elchardus, M., Marx, I. and Pelleriaux, K. (2003) De nieuwe sociale kwestie: begripsverduidelijking en hypothesevorming, in B. Cantillon (ed) De Nieuwe Sociale Kwesties, pp 11–30. Antwerp: Garant. Esping-Andersen, G. (1990) The Three Worlds of Welfare Capitalism, Cambridge (UK): Polity Press. Esping-Andersen, G. (1999) Social Foundations of Postindustrial Economies, Oxford: Oxford University Press. Esping-Andersen, G. (2000) ‘A Welfare State for the 21st Century.Ageing societies, knowledge-based economies and the sustainability of European welfare states’, Background report for the Lisbon Summit, EU. Esping-Andersen, G. (2002) Why we Need a New Welfare State, New York: Oxford University Press. Fagan, C., Jones, B. and Walthery, P. (2007) ‘Work-family policy provisions in European firms – statutory provisions and employee take-up of parental leave and the “right to request” part-time hours’, Manchester, FP6 Network of Excellence RECWOWE. Giddens, A. (1998) The Third Way: The Renewal of Social Democracy, Cambridge: Polity Press. Gilbert, N. (2005) ‘The “Enabling State?” From Public to Private Responsibility for Social Protection: Pathways and Pitfalls’, OECD Social, Employment and Migration Working Papers, Paris, OECD. Goodin, R. E. (1998) Social Welfare as a Collective Responsibility, in D. Schmidtz and R. E. Goodin (eds) Social Welfare and Individual Responsibility, pp 97–195. Cambridge and New York: Cambridge University Press. 15

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Green-Pedersen, C. and Haverland, M. (2002) ‘The new politics and scholarship of the welfare state’, Journal of European Social Policy, 12 (1): 43–51. Hacker, J. S. (2004) ‘Privatizing Risk without Privatizing the Welfare State: The Hidden Politics of Social Policy Retrenchment in the United States’, American Political Science Review, 98 (2): 243–60. Hassel, A. (2003) ‘The Politics of Social Pacts’, British Journal of Industrial Relations, 41 (4): 707–26. Hemerijck, A. (1996) Corporatist immobility in the Netherlands, in C. Crouch and F. Traxler (eds) Organized Industrial Relations in Europe: What Future?, pp 183–226. Avebury: Aldershot. Hicks, A. and Misra, J. (1993) ‘Political Resources and the Growth of Welfare in Affluent Capitalist Democracies, 1960–1982’, The American Journal of Sociology, 99 (3): 668–710. Houwing, H. (2010) A Dutch Approach to Flexicurity? Amsterdam: University of Amsterdam. Huber, E., Ragin, C. and Stephens, J. D. (1993) ‘Social Democracy, Christian Democracy, Constitutional Structure, and the Welfare State’, The American Journal of Sociology, 99 (3): 711–49. Kittel, B. and Obinger, H. (2003) ‘Political parties, institutions, and the dynamics of social expenditure in times of austerity’, Journal of European Public Policy, 10 (1): 20. Knijn, T. (1994) ‘Fish without Bikes: Revision of the Dutch Welfare State and Its Consequences for the (In)dependence of Single Mothers’, Social Politics: International Studies in Gender, State and Society, 1 (1): 83–105. Knijn, T. and Kremer, M. (1997) ‘Gender and the Caring Dimension of Welfare States:Toward Inclusive Citizenship’, Social Politics: International Studies in Gender, State and Society, 4 (3): 328–61. Korpi, W. (1983) The Democratic Class Struggle, London and Boston: Routledge and K. Paul. Korpi, W. (2006) The Power Resources Model, in C. Pierson and F. G. Castles (eds) The Welfare State Reader, second edn, pp 76–88. Cambridge: Polity Press. Lacey, A. and Ilcan, S. (2006) ‘Voluntary Labor, Responsible Citizenship, and International NGOs’, International Journal of Comparative Sociology, 47 (1): 34–53. Lewis, J. (1992) ‘Gender and the Development of Welfare Regimes’, Journal of European Social Policy, 2 (3): 159–73. Lewis, J. (2006) ‘Men, women, work, care and policies’, Journal of European Social Policy, 16 (4): 387–92. Luhmann, N. (1993) Risk: A Sociological Theory, New York: A. de Gruyter. Mailand, M. (2007) ‘Explaining variations in tripartism – the role of social partners in regulating work and welfare’: Employment Relations Research Centre (FAOS), University of Copenhagen. Marshall, T. H. (1950) Citizenship and Social Class, and Other Essays, Cambridge, UK: Cambridge University Press.

16

Introduction

Nagelkerke, A. G. and De Nijs, W. F. (eds) (2003) Sturen in het laagland, Delft: Eburon. OECD (2010a) Economic Outlook, Paris: Organisation for Economic Cooperation and Development. OECD (2010b) Economic Survey of the Netherlands 2010, Paris: OECD. OECD (2010c) Labour Force Statistics, Paris: OECD. OECD (2010d) Netherlands Economic Outlook 88 Country Summary, Paris: OECD. Olson, M. (1965) The Logic of Collective Action: Public Goods and the Theory of Groups, Cambridge, MA: Harvard University Press. Orloff,A. S. (1993) ‘Gender and the Social Rights of Citizenship:The Comparative Analysis of Gender Relations and Welfare States’, American Sociological Review, 58 (3): 303–28. Palier, B. (ed) (2010) A Long Goodbye to Bismarck? The Politics of Welfare Reform in Continental Europe, Amsterdam: Amsterdam University Press. Pierson, P. (1994) Dismantling the Welfare State?: Reagan, Thatcher, and the Politics of Retrenchment, Cambridge, UK and New York: Cambridge University Press. Pierson, P. (1996) ‘The new politics of the welfare state’, World Politics, 48 (2): 143–79. Pierson, P. (2000) ‘Increasing Returns, Path Dependence, and the Study of Politics’, The American Political Science Review, 94 (2): 251–67. Pierson, P. (2001) The New Politics of the Welfare State, Oxford and New York: Oxford University Press. Rein, M. (1982) ‘The Social Policy of the Firm’, Policy Sciences, 14 (2): 117–35. Rijken,A. J. and Knijn,T. (2008) ‘Explaining Dutch Fertility Rates in a Comparative Perspective: The role of economy, social policy and culture’, European Societies, 10 (5): 763–86. Rubery, J., Smith, M., Fagan, C. and Grimshaw, D. (1998) Women and European Employment, London: Routledge Publishers. SCP (2008) ‘Nederland deeltijdland. Vrouwen en deeltijdwerk’, The Hague: Sociaal Cultureel Planbureau. Siegel, N. A. (2005) ‘Social Pacts Revisited: ‘Competitive Concertation’ and Complex Causality in Negotiated Welfare State Reforms’, European Journal of Industrial Relations, 11 (1): 107–26. Streeck,W. and Kenworthy, L. (2005) Theories and Practices of Neocorporatism, in T. Janoski, R. Alford, A. Hicks and M. Schwartz (eds) A Handbook of Political Sociology: States, Civil Societies, and Globalization, pp 441–460. Cambridge, UK: Cambridge University Press. Taylor-Gooby, P. (1997) ‘In Defence of Second-best Theory: State, Class and Capital in Social Policy’, Journal of Social Policy, 26 (2): 171–93. Taylor-Gooby, P. (ed) (2004a) New Risks, New Welfare. The Transformation of the European Welfare State, Oxford: Oxford University Press. Taylor-Gooby, P. (2004b) ‘Open Markets and Welfare Values: Welfare Values, Inequality and Social Change in the Silver Age of the Welfare State’, European Societies, 6 (1): 29–48. 17

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Taylor-Gooby, P. and Zinn, J. O. (2006) Risk in Social Science, Oxford: Oxford University Press. Trampusch, C. (2006) ‘Industrial relations and welfare states: the different dynamics of retrenchment in Germany and the Netherlands’, Journal of European Social Policy, 16 (2): 121–33. Trampusch, C. (2007) ‘Industrial Relations as a Source of Social Policy:A Typology of the Institutional Conditions for Industrial Agreements on Social Benefits’, Social Policy and Administration, 41 (3): 251–70. Traxler, F. (1999) ‘The state in industrial relations: A cross-national analysis of developments and socioeconomic effects’, European Journal of Political Research, 36 (1): 55–85. Van der Veen, R. (2009) De herziening van de Nederlandse verzorgingsstaat. Analyse van een paradigmawisseling, in J. D.Vries and P. Bordewijk (eds) Rijdende treinen en gepasseerde stations. Over Srebrenica, de kredietcrisis en andere beleidsfiasco’s, pp 247–78. Amsterdam:Van Gennep. Van der Veen, R. and Trommel, W. (1999) ‘Managed Liberalization of the Dutch Welfare State:A Review and Analysis of the Reform of the Dutch Social Security System, 1985–1998’, Governance, 12 (3): 289. Van der Veen, R., Yerkes, M. and Achterberg, P. (eds) (2011, forthcoming) The Social Foundation of the Welfare State:Towards a New Welfare Settlement?, Amsterdam: Amsterdam University Press. Van Oorschot, W. (2000) ‘The Battle against Numbers: Disability Policies in the Netherlands’, European Journal of Social Security, 2 (4): 343–61. Van Ruysseveldt, J. and Van Hoof, J. (eds) (2006) Arbeid in Verandering, Amsterdam: Kluwer. Van Ruysseveldt, J. and Visser, J. (1996) Industrial Relations in Europe:Traditions and Transitions, London: Sage Publications. Vis, B., van Kersbergen, K. and Becker, U. (2008) ‘The Politics of Welfare State Reform in the Netherlands: Explaining a Never-Ending Puzzle’, Acta Politica, 43 (2): 33–357. Visser, J. (2002) ‘The first part-time economy in the world: a model to be followed?’ Journal of European Social Policy, 12 (1): 23–42. Visser, J. (2006) ‘Union Membership Statistics in 24 Countries’, Monthly Labor Review, 129 (1): 38–49. Visser, J. (2007) ‘De wankele evenwichten van het corporatisme’, Beleid en Maatschappij, 34 (1): 6–22. Visser, J. and Hemerijck, A. (1997) A Dutch Miracle: Job Growth,Welfare Reform and Corporatism in the Netherlands, Amsterdam: Amsterdam University Press. Wilensky, H. L. (1975) The Welfare State and Equality; Structural and Ideological Roots of Public Expenditures, Berkeley: University of California Press. Woldendorp, J. and Delsen, L. (2008) ‘Dutch Corporatism: Does It Still Work? Policy Formation and Macroeconomic Performance 1980–2005’, Acta Politica, 43 (2): 308–33.

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Yerkes, M. (2009) ‘Part-time Work in the Dutch Welfare State: the ideal combination of work and care?’, Policy and Politics, 37 (4): 535–52. Yerkes, M. and van der Veen, R. (2011) ‘Crisis and Welfare State Change in the Netherlands’, Social Policy and Administration, 45 (4): 430–44. Yerkes, M. and Visser, J. (2006) Women’s Preferences or Delineated Policies? The Development of part-time work in the Netherlands, the UK and Germany, in J.Y. Boulin, M. Lallement, J. Messenger and F. Michon (eds) Decent Working Time, New Trends, New Issues, pp 235–262. Geneva: ILO.

19

TWO

Changing social risks, changing risk protection? with Romke van der Veen A perusal of relevant welfare state and industrial relations literature would lead one to believe that a transformation of the welfare state, in its response to changing social risks, is highly unlikely. The stickiness of existing institutions, the varied interests of so many actors – any number of mechanisms can combine to make it difficult to respond to changing social risks. This chapter looks at what these mechanisms are and what the expectations for the response of the Dutch welfare state should be.That not all of these mechanisms are present or equally dominant in the Dutch case will become clearer in the coming chapters, through a thick description1 (Geertz, 1973) of three social risks: sickness and disability policy, childcare policy and employability policy. Using an actor-centred institutionalist framework, each of these cases is analysed in terms of the interests of the state and the social partners, how they perceive and manage the risk within the corporatist institutional structure and which social mechanisms explain these developments. Both actors and institutions influence how social risk protection develops in the welfare state.To understand the role of both actors and institutions in whether and in what way the Dutch welfare state is able to respond to changing and emerging social risks, an actor-centred institutionalist approach is used. Actor-centred institutionalism, as proposed by Scharpf (1997: 34), ‘is characterized by its giving equal weight to the strategic actions and interactions of purposeful and resourceful individual and corporate actors and to the enabling, constraining and shaping effects of given (but variable) institutional structures and institutionalised norms’. In short, the focus here is on actors and institutions as well as the interaction of these two – referred to here as process. In this sense, the interaction of political, economic and social actors within the institutional context of the Dutch welfare state creates processes of social risk protection. Drawing from institutional and rational actor theories, this chapter looks for social mechanisms that play a role in explaining social risk protection.These mechanisms, at the level of institutions, actors and process, are used to create a set of expectations that suggest what is likely to happen in the Dutch response to social risks.

Institutionalism From an institutionalist perspective, social institutions play an important role in risk protection, as actors are guided by formal and informal rules embedded 21

Transforming the Dutch welfare state

in institutions – rules which limit or constrain their behaviour. This essentially sociological approach emphasises the influence of a given institutional context on the perceptions and beliefs of actors, which influences the content and form of risk protection.‘In general, institutionalists are interested in the whole range of state and societal institutions that shape how political actors define their interests and that structure their relations of power to other groups’ (Thelen and Steinmo, 1992: 2). In explaining the development of social risk protection, the institutional approach stresses the importance of existing welfare state and industrial relations structures (Esping-Andersen, 1999; Thelen and Steinmo, 1992).

Welfare state institutions As welfare states develop and face increasing financial pressures, the ability to respond to changing social risks is limited by institutional structures. ‘Those seeking policy reform must confront not only the potential opposition of voters and programme beneficiaries but the stickiness of existing policy arrangements’ as well (Pierson, 2001: 414). This stickiness includes both veto points, or the ability of (a group of) actors to prevent the adoption of legislation, and processes of path dependency, which is ‘a common “short-hand” to indicate that the past shapes the future’ (Ebbinghaus, 2005: 5). The extent of path dependency is a reflection of institutions (Pierson, 1996) or welfare regimes (Esping-Andersen, 1999). Pierson (2000: 252) distinguishes between a broad and a narrow definition of path dependency. In the former, ‘path dependency refers to the causal relevance of preceding stages in a temporal sequence’ and in the latter, path dependency refers to increasing returns. This demarcation exposes two separate explanatory mechanisms that can help elucidate the shaping role played by welfare state institutions involved in social risk protection.2 The first mechanism, a sequencing mechanism, has also been referred to as the idea that ‘time matters’ (Bonoli, 2007). In terms of path dependency, a sequencing mechanism means variation in risk protection should occur due to the timing of post-industrialisation. The later that post-industrialisation took place, the more problematic it becomes for the generous welfare states of the industrial age to adjust to social risks emerging as a result of changes in post-industrial society and employment.The early timing of post-industrialisation at the start of the 1970s in the Nordic countries has supposedly allowed Nordic welfare states to successfully reorient themselves to the problems associated with ‘new’ social risks without simultaneously facing problems of increased welfare state expenditures (e.g. as a result of population ageing) in a time of fiscal austerity. In contrast, Bonoli (2007) argues that the generous post-war welfare states of Continental and Southern Europe have been unable to successfully reorient their welfare states to protect against ‘new’ social risks. The second mechanism, increasing returns, means that across time, alternative policy options become less desirable ‘because the relative benefits of the current activity compared with other possible options increase over time’ (Pierson, 2000: 22

Changing social risks, changing risk protection?

252, emphasis in the original). In other words, institutions originally designed to protect against ‘old’ social risks will be stable across time and difficult to change. As long as these institutions continue to produce increasing returns, actors within the welfare state are constrained to maintain them in some way. This, in turn, limits the capabilities of actors to respond in alternative ways. The first two expectations, then, are that the collective protection of ‘old’ social risks is likely to continue and the type of protection offered, historically centred on a male breadwinner and in the form of income transfers, is unlikely to change dramatically.While some change to existing (old) social risk policies is to be expected given current endogenous and exogenous pressures, such as those mentioned in the previous chapter, no dramatic shifts in protection, such as a shift towards a neo-liberal style of protection, are expected.3 Secondly, given these mechanisms, protection of ‘new’ social risks is likely to be absent or constrained, given existing institutional structures and the timing of the emergence of new social risks. In Bonoli’s analysis, the Netherlands is a post-industrial latecomer, meaning the Dutch welfare state should have difficulty in addressing ‘new’ social risks. This mechanism will constrain the set of choices available to Dutch policy makers. ‘In most cases, effective coverage against new social risks requires the adoption of new policies or the radical reorientation of existing ones’ (Bonoli, 2007: 511). Therefore, collective protection of new social risks is unlikely to emerge. Rather, individual, market-driven policy solutions will be chosen. The existence of ‘old’ social risk protection and fiscal welfare state pressure makes it unlikely that the Dutch welfare state will create (generous) welfare schemes for new social risks.

Industrial relations institutions Actors are constrained not only by the stickiness of welfare state institutions but by deeply engrained industrial relations institutions as well (Traxler et al, 2001). Industrial relations institutions are in place to create conditions under which political and labour market exchanges take place and are therefore a reflection of the distribution of power between the state and organised interests amidst the presence of collective bargaining institutions. The same two path dependency mechanisms that structure welfare state institutions – sequencing and increasing returns – are likely evident in industrial relations institutions as well. In terms of the increasing returns mechanism, whichever path was chosen during the development of these institutions, once established, is unlikely to change dramatically.The third expectation, then, is that maintaining the established relationship between the state and organised interests for handling social risk protection, including any division of responsibility for social risk protection, is more attractive than shifting towards alternative policy options. From a sequencing or ‘time matters’ perspective, it is not so much the timing of post-industrialisation that matters, but the timing and level of decentralisation and union decline that is likely to matter. During the welfare state crisis of the 23

Transforming the Dutch welfare state

1970s, many countries witnessed a decline in trade union power through a loss of membership, as well as a decentralisation of collective bargaining levels (Visser, 2006). These processes continued in some countries well throughout the 1980s and into the 1990s, significantly changing industrial relations in these countries and affecting the coordination and cooperation between the state and organised interests. In the Netherlands, the effects of trade union decline and decentralisation during the 1970s and early 1980s have led to increasing differentiation in collective bargaining (Nagelkerke and De Nijs, 2003). Given this institutional mechanism of sequencing, we can expect a lack of protection for new social risks and a tendency to maintain old social risk protection. Decentralisation will have led to increased differentiation and individualisation in working conditions, making it unlikely that collective solutions will be sought for new social risk protection. Without the push for social risk protection from some outside source (e.g. trade union members or individual employers) new social risk protection is likely to remain absent. Once certain groups begin to demand protection, any new outcomes will shape later responses by the social partners and the state.

Institutional change While path dependency arguments applied to both welfare state developments and industrial relations are strong, they do not exclude the possibility of institutional change. Until recently, however, much welfare state scholarship has assumed that institutional change occurs due mainly to exogenous shocks or crises, creating major institutional change and thereby limiting the possibility that minor institutional change is observed. As Streeck and Thelen (2005: 8, emphasis in the original) convincingly argue, the problem is that ‘equating incremental with adaptive and reproductive minor change, and major change with, mostly exogenous, disruption of continuity, makes excessively high demands on “real” change to be recognised as such and tends to reduce most or all observable changes to adjustment for the purpose of stability’. Rather, the authors contend that a distinction between processes of change and results of change is necessary. They present a theory of institutional change that focuses on gradual change and illustrates how, within path dependent institutions, change can occur. Streeck and Thelen’s edited volume builds on an article from Hacker (2004) and presents case studies investigating various forms of institutional change. Both represent a departure from previous welfare state studies by recognising that processes of institutional change are as important as the results of institutional change, thus making clear that processes of gradual change occur and can lead to institutional change in the long run. Much of the welfare state literature focuses primarily on the results of institutional change. One example of this is Hall’s (1993) distinction between first-, second- and third-order policy change in social learning. First- and second-order change reflect policy modifications or the creation of new policy instruments based on past experience. No change in policy goals takes place under first- and second-order change, in contrast to third-order change 24

Changing social risks, changing risk protection?

where policy goals do change. Third-order change is the most drastic, reflecting a shift in policy paradigms.Yet the focus on results of change limits our ability to observe other, more subtle types of change. ‘Analytical frameworks that take the absence of disruption as sufficient evidence of institutional continuity miss the point, given that the practical enactment of an institution is as much part of its reality as its formal structure’ (Streeck and Thelen, 2005: 18, emphasis in the original). The attention given to both evidence of continuity (path dependence) as well as the absence of this evidence is a second advantage to Streeck and Thelen’s approach.The earlier article by Hacker (2004) distinguishes four types of gradual institutional change within the US welfare state, arising from changes in internal and external barriers to reform. Dependent upon changes in these conditions, processes of drift, layering, conversion or revision can take place. In the US welfare state, changes to internal and external barriers to reform have led to a privatisation of risk. Although public social policies have indeed largely resisted the political and economic onslaught of recent decades, efforts to update them to changing social risks have failed (drift), their ground-level operation has shifted in directions at odds with their initial goals (conversion), and new policies that subvert or threaten them have been put in place (layering). (Hacker, 2004: 256, italics in the original) Streeck and Thelen add to this categorisation, distinguishing five types of institutional change: displacement, layering, drift, conversion and exhaustion. Displacement refers to institutional change that arises as a result of institutional incoherency. Unintended gaps arise between the intention of different institutional arrangements, leaving room for one arrangement to be ‘discredited or pushed to the side in favor of new institutions and associated behavioral logics’ (Streeck and Thelen 2005: 18). Layering, on the other hand, takes place as minor policy changes are implemented, which, over time, push aside the original institutional arrangements. Institutional change through a process of drift is more representative of inaction rather than action.As Hacker (2005) suggests in his contributed chapter, drift comes about largely through a lack of decision-making rather than through explicit decisions to bring about change. Conversion defines institutional change across time that comes about as new actors enter the field, embracing new ideals and goals, using existing institutions to serve these goals. Lastly, exhaustion refers to institutional breakdown that gradually takes place. Exhaustion is not the same as drift, as it stems from explicit actor behaviour. In each case, actors’ perceptions change, which leads to gradual, and in some cases continuous, institutional change. In relation to social risk protection, although it is likely that some institutional change has occurred in response to changing social risks, the extent to which institutional change has occurred and whether distinct processes or results of institutional change can be distinguished remain empirical questions.

25

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Actors and interests The importance of actors and interests is often emphasised in rational choice approaches (see, for example, Torenvlied and Akkerman, 2004). Such approaches offer a framework for studying self-interest, common goals and action (Traxler et al, 2001) and have proven useful in explaining certain dynamics in welfare state development, for example policy-making in multilevel political systems. The amount of power available to individuals varies within multilevel welfare states, making a rational choice approach useful, given that the success of individual actors is dependent upon the power available to them (Traxler et al, 2001). This approach has also been used to explain collective decision-making processes, such as policy coordination in collective bargaining (Torenvlied and Akkerman, 2004).4 When considering actors and interests, it is imperative to consider a number of underlying issues and assumptions. Firstly, actors are frequently assumed to be rational, but this is a problematic assumption because it limits our understanding of actors’ behaviour. Interests are based on a perception of reality, which is a mixture of subjectively defined interests. Moreover, whether, and to what extent actors behave out of economic or cultural self-interest is in large part dependent upon the institutional context (Scharpf, 1997). It can be more useful to consider actors as having bounded rationality. ‘In contrast to “economic rationality”, bounded rationality assumes that actors are satisfying rather than maximizing and have limited information and information-processing capabilities. The assumption of material self-interest as “the typical value” shared by actors is complemented here by an explicit consideration of the role of other immanent values’ (Korpi, 2001: 275). Applying the concept of bounded rationality to actors is similar to what Scharpf terms ‘intentional actors’ (1997; also cited in Korpi, 2001). Another issue to consider is the difficulty associated with studying the subjective preferences of actors, a problem compounded by the presence of composite actors, who undertake action in the name of a group or organisation (Scharpf, 1997). Composite actors must be analysed not only from the outside (as an actor who takes action) but from the inside as well, ‘as an institutional structure within which internal actors interact to produce the actions ascribed to the composite actor’ (Scharpf, 1997: 52).To assess the perceptions and preferences of composite actors, an actor-centred institutionalist perspective disaggregates interests or ‘actor orientations’ into three parts: the unit of reference, cognitive orientations and preferences. The unit of reference tells us on whose behalf individuals are acting and is helpful to the study of social risks because it allows a disaggregation of the complex interests of actors involved. While it may seem obvious that a trade union acts on behalf of its members, individuals within a composite actor can assume different roles and can also act upon their own self-interest. Actor orientations are also affected by individual cognitive orientations, meaning individuals’‘shared knowledge and ignorance’ (Scharpf, 1997: 63) in regard to social risks. Or as Hall (1993: 291–92) has argued, ‘actions are invariably based on a particular understanding of that 26

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sphere of the world which policy addresses’ whereby ‘policy-making in virtually all fields takes place within the context of a particular set of ideas that recognise some social interests as more legitimate than others and privilege some lines of policy over others’. Here, the shaping effect of the institutional setting on actor interests is evident. Although an assumption can be made regarding the accuracy of an individual’s perception of common facts, inferred knowledge of social risks will be formed by current political, social and economic thought within the welfare state as well as individual or group preferences. The preferences of composite actors are not simply a reflection of self-interest, however (Korpi, 2001). While individual self-interest, or the pursuit of selfpreservation and autonomy, can influence the policy process, it is more likely that composite actors comprise individuals with shared norms and identities. Finally, when looking at actors and their interests, consideration must be given to power distributions, power as manifested both within and outside of conflict. An understanding of actors and their use of power must not be limited to conflicts of interest in creating social risk protection. ‘It should also focus on differences in the bases of power among rational actions and – what is central in the context of institutions – on actors’ strategies to reduce costs associated with the use of power, strategies which may in fact lead to an avoidance of involvement in manifest conflicts’ (Korpi, 2001: 245). The mechanism described here can be called an actor orientation mechanism. Composite actors, with shared norms and identities, will act based on their unit of reference (for example, a trade union acts on behalf of its members), their cognitive orientations (shared knowledge about old and new social risks) and their interests and preferences. This actor orientation mechanism will be evident among three composite actors in the Netherlands: the state, trade union organisations and employer organisations. With the exception of the state, these actors have their own shared norms and identities.The state, in turn, is represented by a number of smaller composite actors in the form of political parties. Each group will have its own actor orientation based on the interests of their electorate or membership, in line with their subjective interests and preferences and influenced by the dominant Dutch discourse on old and new social risks, including the influence of policy experts. This mechanism leads to a fifth expectation: if institutions are path dependent, then the dominant Dutch discourse is likely to be focused on the collective protection of old social risks, with little attention for the collective protection of new social risks as there is little incentive to deviate from the current path.An exception to this can occur due to the influence of policy experts. Given the variation in subjective interests among these composite actors, variation in social risk perception, and hence social risk protection, is expected.

Welfare state actors Besides the more abstract and general idea that composite actors will act based on cognitive orientations, units of reference and their interests and preferences, 27

Transforming the Dutch welfare state

it is possible to formulate specific expectations about welfare state and industrial relations actors using evidence from previous studies. One of the most influential perspectives in this regard is the power resources perspective. Power resources theory has been instrumental in shaping our understanding of actors within the welfare state.The basic premise of power resources theory is that class differences within the welfare state are reflected in political cleavages, which helps explain variations in welfare state development. ‘[...] a crucial assumption is that the types of power resources that can be mobilized and used in politics and on markets differ in class-related ways’ (Korpi, 1989: 312, emphasis in original). Groups relatively poor in their market resources will try to collectivise their interests (for example, through trade unions) in an attempt to influence politics and the outcomes of redistributive policies. It follows that power resources theory can be used to discern a mechanism of power distribution based on party politics, one that is likely to shape social risk protection. The nexus of power resources literature focuses on party politics within parliamentary democracies, maintaining that ‘the level of working-class mobilization and the strength of left parties are the primary determinants of the size and distributive impact of the welfare state (Huber et al, 1993: 714; see also Korpi, 1983), the so-called ‘old’ politics argument discussed in Chapter One. However, as a number of studies have shown, the presence of social democratic or leftist parties is not the only determinant of welfare state expenditure (see, for example, Huber et al, 1993). The presence of Christian democratic parties leads to distinct welfare expenditures.Whereas social democracy leads to an expansion of the public sector in an effort to curb inequality, Christian democracy typically provides protection to male breadwinners, leading to large transfer payments and the reproduction of social inequalities (Huber et al, 1993). With a power distribution mechanism, party politics are assumed to guide the preferences and behaviour of political actors. An expectation in regard to welfare state actors then, is that whether risks are seen to be collective or individual, and the type of protection afforded to these risks will depend upon the political party in power. For example, a Christian democratic government majority would likely have a preference for the continued public collective protection of ‘old’ social risks and no public collective protection of ‘new’ social risks. A Christian democratic majority would favour maintaining transfer payments to male breadwinners, and would eschew active labour market policies or the enlargement of the public sector to address care risks, as the preference would be to have care take place within the family. Social democrats, however, would focus on curbing inequalities and are likely to prefer public sector solutions either through state intervention or through an expansion of the public sector. Social democratic governments are not likely to be oriented towards market-driven alternatives, nor are they likely to focus solely on the protection of ‘old’ social risks given the increased inequality emerging alongside ‘new’ social risks. Secular centre-right governments are also likely to focus on both old and new social risks; however, the preference will be for individual, rather than collective, solutions. They will seek to increase 28

Changing social risks, changing risk protection?

individual responsibility, for example by supporting active labour market policies or through increased obligations for recipients of welfare benefits. It should be noted, however, that the Netherlands has a parliamentary political system in which coalition forming plays an important role. How these differences in interest formation play out within this coalition environment will need to be assessed empirically. The actor orientations of these political actors are likely influenced by policy experts. As Hall (1993: 277) notes, ‘the key agents pushing forward the learning process are the experts in a given field of policy, either working for the state or advising it’. The possible influence of experts has two implications for an actor-centred institutionalist approach and this actor-level mechanism of power distribution. First, experts help create the political discourse that creates a shared understanding of particular policy problems. In this manner, incremental changes in policy or the development of new policy instruments are based on the knowledge presented by experts. However, and this is simultaneously the second implication, the views of experts are likely to be controversial. Views adopted or believed by politicians and policy makers are likely to support the dominant cognitive orientations upheld by these actors, lending credence to party preferences for social risk protection.

Industrial relations actors Power resources theory is also applicable to industrial relations actors. In relation to organised interests, it is safe to say that there has always been an inherent conflict between capital and labour, resulting in power asymmetry between the two.This inherent conflict implies that the power configuration between capital and labour is in a constant state of change (Watson, 2003). The power of both capital and labour, however, is dependent upon the state. ‘State power may promote or even enforce cooperative solutions’ (Traxler et al, 2001: 16). Without the willingness of the state to share its governing or regulatory capacity, the power of both trade unions and employers’ organisations would be severely constrained. In the Netherlands, the distribution of power within industrial relations was historically defined along strict political, religious or ideological lines. Known as pillarisation (verzuiling), various societal groups were segregated according to specific affiliations. This segregation permeated every layer of society, and organised interests were primarily defined in this manner as well; strictly socialist or Christian trade unions are an example of this. However, following a period of de-pillarisation during the 1960s and 1970s, Dutch institutions are no longer segregated along these strict religious, political or ideological lines. Rather, contemporary interest formation in the Netherlands is better understood in terms of the present corporatist context. Dutch industrial relations can now be classified as dynamic and fluid, having transformed from ‘innovative’ corporatism post-World War II, to ‘responsive’ corporatism today (Hemerijck, 1996). ‘Under these conditions, the institutional 29

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structure of corporatist governance contains a high degree of decisional capacity to encourage a coherent domestic strategy of flexible adjustment. […] In its responsive format, corporatist governance is largely self-enforcing’ (Hemerijck, 1996: 195).The seventh expectation then, is that in this responsive format, the social partners are likely to show a preference for continued collaboration with the state on issues of social risk protection. However, just because the social partners have been willing to cooperate with each other and the state on ‘old’ social risks, does not mean that ‘new’ social risks will be covered. In other words, even in its responsive format, path dependency will be present in Dutch corporatism, meaning a continued focus on ‘old’ social risks can be expected. In the absence of an exogenous shock or push for protection, ‘new’ social risk protection is likely to remain absent.

Public support Given the emergence of new social risks, an increasing number of scholars are interested in the mobilising capacity and the ability of groups affected by new social risks to demand protection (see Armingeon and Bonoli, 2006).There is also significant attention for this phenomenon outside the welfare state literature, for example, in new social movements theory.5 As noted by Kriesi and colleagues,‘the idea that processes of social change impinge indirectly, through a restructuration of existing power relations, on social protest has gained some weight’ (Kriesi et al, 1995: xiii). Unfortunately, the scope of this study does not allow for an in-depth look into the success or failure of certain groups and their political demand-making. Rather, the focus here is on the public support given to both old and new risks and the possible effect of this support on the perception and management of social risks. Attention for the public support of social risk protection is necessary because the collective provision of protection assumes some recognition of a risk being a social risk. If a risk is not social, there is no immediate need for a collective response (Esping-Andersen, 1999).Advocacy in the form of public support is likely to influence the strategy of public and collective actors (Raven et al, 2011). For example, public support for welfare state policies can lend legitimacy to reform efforts of ‘old’ social risk policies. Studies attempting to explain the continued legitimacy of welfare states have shown that citizens continue to support welfare state policies out of self-interest (De Beer, 2007) and that welfare state legitimacy depends on how welfare states meet the economic needs and interests of its citizens (Achterberg et al, 2010; Korpi and Palme, 1998).6 More importantly, though, public support can create legitimacy for the protection of ‘new’ social risks, protection that might otherwise remain absent. The difficulty with this public support mechanism, however, is the issue of causality.7 Does public opinion influence social risk policies or vice versa? In a comprehensive study of the relationship between public opinion and policymaking, Sharp (1999) argues that a ‘comparative analysis of the evidence’ is needed within a given institutional context to reveal the relationship between 30

Changing social risks, changing risk protection?

public opinion and policy-making. Raven and colleagues (2011) have shown that in regard to social risk protection, public opinion affects policy developments in relatively new policy areas, but has no significant effect on traditional social risk policies, such as unemployment. We therefore expect that in terms of ‘old’ social risks, public opinion is likely to be a reflection of policy. In other words, public opinion is likely to support the continued collective protection of old social risks given shared social norms. An exception to high public support for ‘old’ social risks can occur if perceived misuse of risk protection is high, in which case public opinion could either be at odds with policy or could influence policy in calling for reform (Raven et al, 2011). In terms of ‘new’ social risks, when a majority of citizens believes individuals affected by ‘new’ social risks are deserving of protection, it is likely that a push will be made to provide public collective riskpooling options.

Interest realisation in the welfare state As noted earlier, there is a third dimension to an analytical framework focused on actors and institutions: process.The process of social risk protection is the realisation of actors’ interests within the institutional context. Interest realisation in the welfare state can be framed in terms of an ‘old’ and ‘new’ politics mechanism.The process of social risk protection is not likely to take on the either/or situation assumed in many ‘old’ versus ‘new’ politics studies, however. Rather, our expectation is that both perspectives will likely offer valid explanations for the preferences of political parties and the management of social risks within the welfare state. Social democratic parties, the old champions of the welfare state, are still likely to be champions of the welfare state but in a different manner.As Pierson (2001: 417) has argued, ‘even strong supporters of the welfare state increasingly acknowledge that sustaining basic arrangements will require significant reforms’.Yet at the same time, given a preference for fighting inequality through welfare state intervention, both old and new social risks are likely to receive some form of collective protection if social democrats dominate the process of social risk protection. But no political party will remain untainted by ‘new’ politics of blame avoidance, even the champions of the welfare state. Given endogenous pressures to reform, the social democrats will have to find a balance between championing their goal of welfare-state-led equality with the viability of the modern welfare state. This balance will also be sought after by Christian democratic and secular centre-right political parties, which will attempt to balance their preferences for social risk protection with attempts to avoid blame. As noted above, Christian democratic governments are likely to remain tied to the idea of traditional social risk protection for male breadwinners.Yet at the same time, it is precisely these policies that are no longer producing increasing returns, which means that Christian democrats could be faced with reforming the policies they support the most, making blame avoidance an attractive strategy. Secular centre-right parties are more likely to place the onus on individual responsibility. This could mean a reform of current 31

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social risk policies and the implementation of market-driven solutions to new social risks.

Interest realisation in industrial relations From the standpoint of industrial relations, interest realisation in risk protection will depend upon the distribution of power among actors. If the state chooses to share its regulatory capacity with collective actors, both trade unions and employers have some power to realise their interests. Should the state seek a strategy of blame avoidance, both employers and trade unions are likely to be willing partners, as it increases their legitimacy and makes them important partners at the bargaining table in terms of welfare reform, increasing the chances that their interests will be realised. While it may be an unequal partnership given the inherent asymmetrical base of power between capital and labour, the distribution of power among the social partners in the Netherlands is also mediated by the presence of strong corporatist institutions. Corporatism is deeply engrained in Dutch industrial relations, creating a reasonable expectation that the state and the social partners will continue to act on their preference for corporatist concertation. This concertation can take place in the process of reform or in the process of creating new solutions to social risks.Two possible corporatist scenarios outlined by Hemerijck (1996)8 provide a useful interpretation of this mechanism. These include immobile corporatism, where concertation comes to a near standstill, and responsive corporatism, when both the state and the social partners are willing to take part in a political exchange. The tenth and final expectation therefore is that with this mechanism, there will be variation in risk protection between old and new social risks dependent upon how the state shares its regulatory capacity. In the case of immobile corporatism, a ‘shadow of hierarchy’ (Scharpf, 1997) will be present, in which the state threatens to intervene or directly intervenes if no agreement can be reached between the social partners. In this manner, the state does not (or no longer) share(s) its regulatory capacity, limiting the actions of organised interests. The actions of the state will then depend upon the political situation and the preferences of the ruling government as outlined above. In its responsive format, the corporatist mechanism will produce outcomes resulting from the interaction of the state and the social partners. Assuming that ‘responsive’ corporatism is in place (Hemerijck, 1996), and given a certain degree of reciprocal trust and cultural embeddedness of corporatist coordination, the social partners will accept their corporatist responsibility. Moreover, if the state remains willing to share its regulatory capacity, ‘old’ social risk protection will include an important role for the social partners and collective bargaining institutions, thereby providing the social partners with governing capacity.The state can decide to share its regulatory capacity either by maintaining the status quo or by involving the social partners in reform efforts of ‘old’ social risk policies, in an attempt at blame avoidance. In the case of the latter,

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increased individual responsibility can be expected, with a decrease in income transfers and an increase in protection in the form of active labour market policies. When the state does not share its regulatory capacity, the role of the social partners will be diminished, which is likely to trigger increased income-based protection of ‘old’ social risks in collective bargaining depending upon the preferences of various actors, in particular collective bargaining negotiators as representatives of the social partners.

Conclusion This chapter outlined an actor-centred institutionalist framework for investigating social risk protection within welfare states. This framework, which gives equal importance to actors, institutions and process, will be used to analyse the Dutch response to changing and emerging social risks. This approach is preferable to existing approaches that focus primarily on actors or institutions because it breaks open the ‘black box’ of social risk protection, investigating variation within the welfare state. A number of explanatory mechanisms have been derived from existing welfare state and industrial relations theories and applied to the research case at hand. These mechanisms were used to distinguish ten expectations to be investigated in the empirical analysis and are summarised in Table 2.1.The coming chapters will show to what extent these mechanisms are useful in explaining how social risks are perceived and managed within the Dutch corporatist welfare state.

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Dutch industrial relations institutions

Institutions Dutch welfare state institutions

Expectation

The Netherlands, a post-industrial latecomer, will be unsuccessful in re-orienting its welfare state towards new social risks. Old social risks will continue to receive priority, but will come under increasing fiscal pressure. New social risks will be protected by individual, market-driven solutions. Increasing returns mechanism Alternative policy options will have become less desirable across time, therefore Dutch welfare state institutions that have proven to be stable and strong will continue to be maintained. This limits the ability of the state to respond in alternative ways. Some change is to be expected given fiscal and demographic pressures, but no dramatic change in old social risk protection is likely to take place. Sequencing mechanism The timing and evident levels of decentralisation and union decline are likely to affect the relationship between the Dutch government and the social partners. Despite corporatist cooperation, a process of decentralisation leads to increased differentiation and individualisation in working conditions, therefore collective solutions for new social risk protection are unlikely to take place within the Netherlands. Moreover, given evident trade union decline, traditional members are more likely to maintain support for old social risk protection. Without a push for protection from some outside source, new social risk protection will remain absent. Increasing returns mechanism We can expect that corporatist industrial relations, as set out post-World War II, are likely to remain in place. This established, cooperative relationship between the state and the social partners is more attractive than other, alternative policy options.

Sequencing mechanism

Mechanism

Table 2.1: Social mechanisms and empirical expectations

Transforming the Dutch welfare state

Public

Industrial relations actors

Welfare state actors

We can identify three composite actors in the Netherlands: the state, trade union organisations and employer organisations. With the exception of the state, these actors have their own shared norms and identities. The state, in turn, is represented by a number of smaller composite actors in the form of political parties. These actors will act on behalf of their electorate or membership, based on the dominant Dutch discourse on old and new social risks, including the influence of policy experts, and in line with their subjective interests and preferences. The formation of these interests is dependent upon the distribution of power resources. Power distribution mechanism Within the Dutch welfare state, the power distribution mechanism is likely to be in line with our general expectations outlined in this chapter. The Dutch Christian Democratic Party is likely to favour the protection of old social risks over new social risks, eschewing active labour market policies or public sector solutions to new social risks for large transfer payments that support old social risks associated with traditional breadwinners. Social democrats, however, will support public sector expansion or other public sector solutions for the protection of both old and new social risks. Dutch secular centreright parties will place more emphasis on individual responsibility, with an exception for collective protection of ‘deserving’ groups, such as the elderly or the disabled. Power distribution mechanism In relation to industrial relations, the power distribution mechanism tells us that the formation of interests among organised interests in the Netherlands is likely to occur along corporatist lines, given the presence of ‘responsive corporatism’ in the Netherlands. The social partners will prefer to coordinate with the state on issues of social risk protection, yet given path dependency, the focus is likely to be on old social risks. Without the occurrence of an exogenous shock or push for protection, no new social risk protection is likely to emerge. The involvement of the social partners will also depend on the underlying asymmetrical balance of power between employers and trade unions. Public support mechanism We expect public opinion to continue to support the protection of old risks, given shared social norms. An exception to this will occur if there is a public perception of misuse. A push for new social risk protection is unlikely to occur unless a majority of citizens feels they are affected by these risks.

Actors Both welfare state and Actor orientation mechanism industrial relations actors

Changing social risks, changing risk protection?

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Process Industrial relations

Process Welfare states

Table 2.1: (continued)

Corporatist mechanism

Mechanism

‘Old’ and ‘new’ politics mechanism

Dependent upon whether or not the state is willing to share its regulatory capacity, responsive corporatism or immobile corporatism will take place. In the case of the former, there will be maintenance of the status quo and a focus on income transfers for old social risks. If the state makes an attempt at blame avoidance, there could be a possible shift towards active labour market policies and a decrease in income transfers. In the case of the latter, state policy could be supplemented with income-based protection of old social risks within collective labour agreements.

The old/new politics mechanism is expected to be visible within the Dutch welfare state. Dependent upon the ruling majority party within the coalition government, old party politics will explain a great deal of risk protection. With a Christian democratic majority we can expect a focus on the collective protection of old social risks, with large transfer payments to male breadwinners. In contrast, a social democratic majority will lead to collective, public sector solutions for both old and new social risks. Secular centreright parties will push to realise individual, market-driven solutions with the exception of certain risks such as disability and old age. For these ‘deserving’ groups, collective solutions will be sought. All parties are likely to seek some type of blame avoidance, seeking out the social partners in attempts to justify welfare state reforms. Expectation

Transforming the Dutch welfare state

Changing social risks, changing risk protection?

Notes   More information on the data and methodology applied to achieve this thick description can be found in the Appendix. 1

 Alternatively, Ebbinghaus distinguishes between deterministic and non-deterministic path dependency. Deterministic path dependency is where the diffusion of one particular institution over another takes place through network effects. The more individuals who repeat the same course of action, the more deeply engrained a certain convention becomes. After reaching a critical mass, this institution becomes ‘locked-in’ and irreversible. Nondeterministic path dependency, on the other hand, assumes a ‘long-term developmental pathway of an institution, or complex institutional arrangement shaped by and then further adapted by collective actors’ (Ebbinghaus, 2005: 14). 2

 A recent study by Achterberg and Yerkes (2009) has shown that while convergence among welfare states in regards to expenditure and ideology is evident, this convergence is not towards neo-liberalism, as is often assumed, but is middle-of-the-road and is most clearly evident within existing welfare regimes. 3

  For a more detailed overview of rational choice approaches used to study decisionmaking, see Thomson et al (2003). 4

  New social movements theory focuses on the value and symbolic meaning attached to social movements in post-industrial societies, looking beyond the organisation of groups traditional to industrial society, such as trade unions. For a further discussion on this topic, see Buechler (1995); Kriesi et al (1995) and Melucci (1996). 5

  More recently, scholars such as Mau (2003) have applied moral economy theory to welfare state developments, arguing that the redistribution effects of welfare state policies are supported by the public because these policies do not conflict with dominant social norms. In an empirical study that tests the applicability of the moral economy theory, Raven finds that within the Dutch welfare state, a deeply rooted consensus exists regarding a ‘just’ system of welfare state policies, which explains public support for a variety of social security programs (Achterberg et al, 2010; Raven, 2011, forthcoming). 6

  Another difficulty with this mechanism is that its explanatory power is limited to what one can expect in regard to social risk protection. While this mechanism can show a possible push for reform of old social risks or the introduction of protection for new social risks, it does not allow inferences regarding what type of protection would emerge and whether this will vary across risk forms. Studies that focus on (smaller) coalition groups can circumvent this issue (see Bonoli, 2005; Levitsky, 2008). 7

  Hemerijck (1996) defines four forms of corporatism: responsive, immobile, innovative and corporatist disengagement. The latter two are not relevant to the discussion here. Innovative corporatism refers to the initial phase of corporatist institutional development (for example, the post-World War II period in the Netherlands); corporatist disengagement refers to a breakdown of corporatist institutions, which has not occurred. 8

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Torenvlied, R. and Akkerman,A. (2004) ‘Theory of ‘Soft’ Policy Implementation in Multilevel Systems with an Application to Social Partnership in the Netherlands’, Acta Politica, 39 (1): 31–58. Traxler, F., Blaschke, S. and Kittel, B. (2001) National Labour Relations in Internationalized Markets: A Comparative Study of Institutions, Change, and Performance, Oxford and New York: Oxford University Press. Visser, J. (2006) ‘Union Membership Statistics in 24 Countries’, Monthly Labor Review, 129 (1): 38–49. Watson,T. J. (2003) Sociology,Work and Industry, London and NewYork: Routledge.

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THREE

Sickness and disability reform in the Netherlands In their original design, welfare states were set up to protect workers of the industrial age by providing risk-pooling social insurances for risks encountered in the social system of production: unemployment, disability and the need for a pension during old age. European welfare states, after recovering from the Great Depression and World War II, expanded these policies as their economies thrived and employment expanded, allowing a generous welfare state response to social risks. But generous welfare state schemes came under increased pressure during the 1970s, as the oil crises, stagflation and rising unemployment weakened their financial viability. Over time, the generous disability benefits provided by the Dutch welfare state slowly became the target of such welfare state pressures, as overuse and abuse of the scheme led to a welfare state crisis by the early 1990s (Yerkes and van der Veen, 2011). Disability insurance became a means to an end for dealing with the long-term unemployed as well as a means for employers to dispose of obsolete or unwanted older workers while avoiding strict dismissal rules (Van Oorschot, 2000).This led to a disproportionate number of benefit claimants during the early 1990s.The dramatic increase in benefit claimants and subsequent increase in benefit expenditure (as a percentage of GDP; see Figure 3.1)1 (CBS, 2010) caused a welfare state crisis and led to reform. Despite a subsequent decline in benefit claimants, by the late 1990s this number was on the rise again and by the year 2002, the number of benefit claimants equalled nearly 10% of the Dutch working population. In essence, the generous benefits scheme provided by disability insurance had become a visible smudge on the successful reputation of the Dutch polder model of the 1990s (Becker, 2001).The continued reform of Dutch disability and sickness policy is not a simple case of welfare state retrenchment, however. Retrenchment, or the rolling back of welfare state policies expanded during the golden era of welfare states, refers mainly to financial reform of long-standing welfare state policies. While there has certainly been a decrease in benefit expenditure in disability and sickness policy, disability reform has not been limited to financial retrenchment in the Netherlands. Rather, this ‘old’ social risk has been gradually dismantled and significantly decollectivised in the welfare state.What causes such dramatic welfare reform – above and beyond financial retrenchment, moving towards a dismantling and decollectivisation of this historically important welfare scheme? To understand how this shift has taken place, this chapter provides an in-depth look at the reform of sickness and disability policy. How is this risk perceived and managed by the state and industrial relations actors? Have reforms 41

Transforming the Dutch welfare state Figure 3.1: Percentage of disability benefit recipients in the Netherlands (left y-axis; as a percentage of the total working population aged 15–64) and percentage of disability benefit expenditure* (right y-axis; as a percentage of total GDP**), 1983–2008

*Expenditure data is only available through 2005. **GDP figures used here are based on the OECD expenditure approach and are calculated for the national currency at current prices. Source: CBS Statline data, 2009; OECD, 2009; OECD SOCX data, 2009; author’s own calculations.

to sickness and disability policy changed the collective nature of this social risk? To answer this question, a thick descriptive approach (Geertz, 1973) is taken using an actor-centred institutionalist framework (Scharpf, 1997).2

Contemporary policy Disability policy in the Netherlands is currently governed by the Work and Income according to Labour Capacity Act (Wet Werk en Inkomen naar Arbeidsvermogen, WIA).3 The first part of the WIA is the IVA (Income Provision Scheme for People Fully Occupationally Disabled; Wet Inkomensvoorziening Volledig Arbeidsongeschikten). The IVA provides income protection for individuals deemed to be fully sick or disabled (with at least an 80% loss of income) with little to no chance of recovery in the long-term. The second part of the legislation, the WGA (Return to Work Scheme for the Partially Disabled; Wet Werkhervatting Gedeeltelijk Arbeidsgeschikten) 42

Sickness and disability reform in the Netherlands

regulates the responsibilities of employers and employees when an individual is deemed to be partially sick or disabled (a loss of income between 35% and 80%). This new law, valid since 2006, is used to evaluate any new cases of sickness and disability, primarily replacing the Occupational Disability Insurance Act (Wet op de Arbeidsongeschiktheidsverzekering, WAO) that had been in place since 1967. Under the old law, Dutch disability policy could be characterised as a common pool resource, in which the costs of a public good are distributed among all users (Bannink, 2004). In other words, individual employers could avert financial responsibility by relying on the welfare state and a generous disability and sickness scheme – individual employers were not directly confronted with the collective cost associated with sickness and disability under the previous law. This practice led to collective overconsumption (Bannink, 2004: 216). Two additional factors led to overuse of disability arrangements in the Dutch welfare state. First, Dutch disability policy was characterised by a lack of external public control in the administration of benefits. Second, the legislation covering disability was, and still is, very broad in scope, covering not just a risque professionel but also disability and illness arising from a risque social (Wetenschappelijke Raad voor het Regeringsbeleid; WRR, 2000). In this broader context, although not intended, disability insurance was used to cover not only the risk of sickness and disability but the risk of unemployment as well. As noted by the Scientific Council for Government Policy in the Netherlands (WRR), until the reforms of the 1990s, administrators of disability policy (the social partners), with the unspoken legitimacy of political actors, took the risk of unemployment into account alongside the disability risk, so that individuals could be considered fully sick or disabled even though medically this was not the case (WRR, 2000: 209). This practice led to a disproportionately higher number of benefit recipients within the welfare state and, in time, to a welfare state crisis. In an attempt to curb these perverse effects arising from the structure and nature of sickness and disability policy, rigorous reforms were carried out starting in the 1980s (Van der Veen, 2001;Van Oorschot, 2000) and continuing until 2006 (SCP, 2004).4

The reform of sickness and disability policy The reform of disability and sickness policy in the Netherlands has been lengthy and complicated. In essence, however, five important developments can be discerned, each of which raises theoretical questions that must be answered to understand how the risk of sickness and disability is perceived and why. First, there has been a dramatic decrease in the public-order collective protection of sickness and disability, which shifted financial responsibility towards employers.The latter is also a distinct development of its own, as responsibility shifted to employers not only financially, but also in terms of prevention and insurance. A third important development in sickness and disability policy has been a recollectivisation of sickness and disability protection through collective bargaining. Fourth, the social partners’ responsibility for the administration of sickness and disability benefits has 43

Transforming the Dutch welfare state

been removed. Finally, as a result of these reforms, individual citizens have been held increasingly responsible for their own role in sickness and disability.Together, these reforms illustrate a significant shift in the perception and management of disability. The reform of Dutch sickness and disability policy has been dominated by these five developments.The first major development, the reduction in collective protection, is a combined result of an increased selectivity in benefits and a shift of financial responsibility from the welfare state to employers. Surprisingly, collectively organised employers and trade unions, despite offering occasional resistance to certain reforms, consented to the changes made in sickness and disability policy allowing selectivity criteria to be sharpened and creating more responsibility for employers.This is surprising theoretically because trade unions could be expected to offer more resistance to an increase in benefit selectivity, particularly given the core of their membership – workers who would likely be negatively affected by these reforms. More resistance would also be expected from employers, whose increased (financial) responsibility is far-reaching. The first move to increase benefit selectivity was made during 1993, when disability screening was tightened under the Act on Reducing Disability Claims (Wet Terugdringing Beroep op de Arbeidsongeschiktheidsregelingen, TBA). Three years later, selectivity increased again with the privatisation of sickness insurance and the first major shift towards employer responsibility for disability and sickness protection. This new legislation, the Act on Extending Salary Coverage during Illness (Wet Uitbreiding Loondoorbetalingsplicht bij Ziekte, WULBZ), clearly redefined which individuals have a right to collective insurance and extended the period of time for which employers are responsible for replacing up to 70% of earnings from six weeks to one year. The WULBZ legislation, therefore, was essential to the reduction of collective protection of sickness and disability in the welfare state. Another step towards decollectivising sickness and disability protection was the PEMBA legislation of 1998. The PEMBA (the Act on Premium Differentiation and Market Regulation, Wet Premiedifferentiatie and Marktwerking bij Arbeidsongeschiktheidsverzekeringen) legislation introduced differentiation in disability premiums for the first five years of sickness and disability, based on the proportion of sick and disabled workers in the sector and the firm, and also introduced an opt-out clause, allowing employers to choose to opt out of the public system for this period of five years and insure themselves privately (eigen risico). Thus, PEMBA was a reduction of collective responsibility for disability protection and an increase in employer responsibility. In 2002 and 2004, more responsibility shifted to employers with the passage of the Gatekeeper legislation (Poortwachter), which increased reintegration responsibilities (in 2002) and extended the period of employer coverage from one to two years (in 2004). Finally, with the new WIA legislation in 2006, discussed earlier, selectivity increased once more when even stricter criteria were included to outline who receives collective protection from the welfare state. In sum, the shift towards the significant decollectivisation of sickness and disability is the result of the selection criteria being more strictly 44

Sickness and disability reform in the Netherlands

defined in three stages of disability reform as well as financial responsibility for employers being increased in a dual-stage process, extending their financial responsibility to a period of two years. These are puzzling events to understand within a context of a corporatist welfare state where collectively organised actors work together with the state. Because while the state’s interest in reducing the collective responsibility of the welfare state is logical given increasing costs of welfare programmes and concerns about the financial viability of the welfare state (Scharpf, 2000) the behaviour of trade unions and employers in this regard is less clear. The explanation for this behaviour is discussed in a later section. Increased employer responsibility is also a distinct, second development in disability policy. This is a distinct development because the increase in employer responsibility is not limited to increased financial responsibility during the first period of illness or disability. Increased employer responsibility is now also related to preventing sickness and disability as well as insuring against sickness and disability during the first two years of illness or disability. Prevention was rarely an issue prior to the reforms of the 1990s, but under the WULBZ legislation of 1996, employers became responsible not only for providing income protection during an eventual absence but for preventing sickness-related absence as well. This responsibility intensified under later reforms as the focus of these reforms increasingly shifted towards prevention and the reintegration of workers. Moreover, the passage of the PEMBA legislation in 1998 led to a further increase in employer responsibility with the introduction of differentiation in obligatory disability premiums as well as an opt-out clause, allowing employers to carry the risk of disability and sickness policy in the short-term on their own. Explaining how and why employers are involved in preventing sickness and disability as well as employers’ interests in insuring themselves against sickness and disability costs is key to explaining the increase in employer responsibility in this policy area. Thirdly, this chapter looks at the collective protection of sickness and disability in collective labour agreements. As will become evident in the next section, a majority of collective labour agreements protect against a loss of income during a period of sickness or disability, in essence providing a recollectivisation of protection and thereby compensating for the decollectivisation of disability and sickness protection within the welfare state. Although earlier studies have shown that the social partners use collective bargaining as a compensation for cuts in public welfare (Trampusch, 2006) it is theoretically puzzling why employers and trade unions would first accept decollectivisation, with increased selectivity and increased financial responsibility for employers, only to later compensate for these reforms in collective bargaining. In particular, high coverage in collective bargaining means hypothetically that employers have even greater financial responsibility. A fourth major development in disability policy is the shift from a bipartite administration of disability insurance to public administration, effectively removing the social partners from benefit administration. During the 1990s, following a parliamentary inquiry into problems with disability arrangements, 45

Transforming the Dutch welfare state

substantial reform of benefit administration was also taking place (see Bannink, 2004 for a detailed analysis). Disability insurance had, until the reforms, been administered through a bipartite organisation of trade unions and employers’ organisations. Throughout the 1990s, the state worked on creating the Work and Income Act (Wet Structuur Uitvoering Werk en Inkomen), which was passed in 2001, shifting administrative responsibility for disability insurance away from the social partners into the public sector. The issue of public versus private administration remained a conflict-ridden issue during the final stages of benefit reform. In 2006, the state decided to administer the WGA part of the WIA legislation publicly as well. The WGA, discussed earlier, is one component of the 2006 legislation that outlines the protection of partially sick or disabled individuals. Why did the state choose to administer benefits in the public sector in 2001 and again in 2006? The social partners were against the initial shift to public administration in 2001 and also recommended that the state choose for private administration of the WGA in 2006. The conflicting interests of these actors are discussed in a later section. Lastly, the decrease in collective protection has also meant an increase in individual responsibility for preventing sickness and disability as well as increased obligations to actively participate in labour market reintegration efforts. Not only are benefit recipients faced with stricter entitlement rules and obligations, if they do not receive supplemental income protection through collective bargaining, they now have the responsibility of whether or not to insure themselves for the remaining loss of income (30%) during the second year of illness or disability. Moreover, individuals are only entitled to benefits if they are considered to be fully incapacitated from earning an income over the long term (a loss of income between 80 and 100%); partial benefits are given for short-term disability and illness resulting in an earnings loss of 35–80%. Individuals with a decrease in earnings capacity of less than 35% have no right to collective income protection from the welfare state. These changes to entitlements put an extra onus of financial responsibility on individuals, although in some cases this responsibility is mediated through collective bargaining. Further research is needed to explore how individuals have dealt with this increased level of financial risk, stricter entitlements and increased obligations, as this is beyond the scope of this study. However, it is possible to say something about how this increase in selectivity and responsibility has affected public support for disability arrangements, which may affect the perception and management of the disability risk in the Dutch welfare state.

Declining collective protection The significant decollectivisation of sickness and disability protection is the direct result of three social mechanisms: the WAO crisis of the early 1990s as well as a new politics mechanism and a corporatist mechanism. First, the WAO, the abbreviation for the disability law in place from 1967 to 2006, had spiralled out of control 46

Sickness and disability reform in the Netherlands

creating a crisis within the Dutch welfare state. To understand the effect of the WAO crisis, one must understand that at the height of disability and sickness problems in the early 1990s, expenditures had reached more than 6% of annual GDP (OECD, 2009; see Figure 3.1 earlier in this chapter) and more than 8% of the working population was receiving disability benefits (CBS, 2010). These high figures led the then Prime Minister Ruud Lubbers to claim in the early 1990s ‘the Netherlands is sick’ (Goslinga, 2001), referring to the high number of disability benefit recipients and the need for social change. In this manner, an endogenous pressure, misuse of the system and ensuing perverse effects – and not an exogenous shock – led to reform. Policy makers were struggling to reform policy to effectively reduce the number of benefit recipients and minimise the perverse effects generated by the generous benefit scheme. ‘From 1983 onwards we were dealing with an economic crisis and a crisis in government expenditures. […] It was crystal clear that social security arrangements, including disability, were no longer adequate because the focus was, and I’m sure everyone has told you that, on how to keep people at home with a nice benefit rather than “How do I get people working”.’ (I37, former governmental policy maker) The crisis initially created conflict, evident for example in the difficult advice trajectory experienced in the Social and Economic Council (SER) in 1991, when the social partners advised the government on disability and sickness policy (SER, 1991).The social partners offered different visions on how to stabilise and eventually reduce the number of benefit claimants. Employers and a number of ‘crown members’ of the SER, politically appointed independent advisors, were in favour of reforming the benefit structure, whereas trade unions were opposed to any reform of benefit levels or benefit duration (SER, 1991: 15). One employers’ organisation representative explained that this disagreement led to a serious conflict within the SER: ‘It quickly became apparent that unanimity [in the advisory report, MY] wasn’t going to happen, and what it boiled down to is that crown members of the SER, in first instance they tried to reach a compromise with the unions, a compromise that would not be far-reaching enough, well, at least from our perspective. […] Eventually that resulted in an advisory report supported by a majority of the SER, but by a majority of employers and crown members.And that was quite radical, especially at that time.’ (I6, employers’ organisation representative) The advisory report Advies Ziekteverzuim en Arbeidsongeschiktheid (Advice on Illness-related Absence and Occupational Disability) confirms there was a conflict between the trade unions and employers (SER, 1991). Although there was agreement on the need to reduce the number of disability benefits, the means of 47

Transforming the Dutch welfare state

achieving this reform varied, with trade unions refusing to discuss any measures that would affect benefit levels or duration. The Council sees in that sense that the primary goal for the policy of [disability, MY] volume, that the measures necessary should lead to as many men and women as possible, who would otherwise come to be without employment under the current legislation and administration, maintaining their employment or resuming employment. Different perspectives have been developed within the Council about the policies needed for that purpose in regards to illness-related absence and disability. (SER, 1991: 12) Despite the high levels of conflict between the social partners and political actors, the economic, political and social crisis arising from the continued increase in disability benefit recipients eventually led to cooperation. Working as a shock to the welfare system, the crisis eventually pushed actors to find common interests in solving the crisis (see Table 3.1; Bannink, 2004). As Bannink (2004: 12) notes, following these difficult reforms of benefit levels, actors ‘realigned and formulated a shared perception of the problem and a shared preference as concerns the solution to this problem’.The crisis itself took place in the years prior to the starting point of this research, but was mentioned at the start of nearly every interview as being the catalyst for cooperation and change.The WAO crisis as catalyst helps explain the shift towards decollectivisation, both in how the state focused on increasing selectivity for sickness and disability benefits as well as employers’ willingness to accept the shift in responsibility. For starters, the state no longer perceived sickness and disability to be a social risk requiring the same generous collective response from the welfare state, and began decollectivising benefits.To realise a decollectivisation in disability benefits, particularly increased selectivity in benefits, far-reaching reforms were needed. The first major changes under the 1996 WULBZ legislation, which extended employer responsibility and increased selectivity, were an important step in redefining which individuals have a right to collective insurance, demonstrating that perceptions of the disability risk were changing. Some risks are so great that they require the support of public responsibility: [...] in the sphere of occupational disability there are more private insurance possibilities, even though a fully public share must continue to exist. In terms of sickness-related absenteeism, however, [...] the need for public services is limited. (Tweede Kamer der Staten Generaal, 1996: 2) The increased selectivity and shift towards employer responsibility changed the very nature of sickness insurance and thereby the management of this ‘old’ social risk. ‘Thus, ZW (Sickness Benefit Scheme, MY) has, in effect, been transformed from 48

Sickness and disability reform in the Netherlands Table 3.1: Overview of reforms to Dutch disability and sickness policy Year 1993

Legislation Act on Reducing Disability Claims (TBA)

1993

Act on Reducing Sickness Absence (TAV)

1996

WULBZ

1998

PEMBA

2002

Gatekeeper

2004

Gatekeeper Reforms

2006

WIA (IVA, WGA)

Changes to policy Stricter examinations for new and current disability benefit recipients; age-dependent restriction on benefit duration. Financial stimuli to increase employer responsibility for disability and illness: differentiation in employerpaid premiums for illness linked to illness-related absence; bonus-malus system for employers. Mandatory income coverage during first year of illness: employers required to pay at least 70% of an employee’s pay during the first year of illness or disability. Additional changes at the time: inclusion of civil servants with an invalid pension; Tijdelijke Wet BIA (beperking inkomensgevolgen arbeidsongeschiktheid) – provides individuals who lose their income (all or part) as a result of the new evaluation of disability with a benefit, but only for certain individuals. Intended to improve reintegration efforts and reduce number of benefit recipients: employers now responsible for WAO premium and premiums differentiated based on number of employees on disability benefits. Increased responsibility for employers and employees to facilitate reintegration. Employers’ mandatory income coverage extended from one to two years. New waiting period for Gatekeeper reintegration report. Stricter rules for being considered eligible for disability. Implementation of new disability and sickness legislation (see text).

Source: UWV Kroniek, 2006; WRR, 2000.

a fully-fledged national insurance scheme into a safety net for specific vulnerable groups’ (Van Oorschot, 2000: 348). A further redefinition of responsibility and decrease of collective responsibility in the welfare state was achieved with the PEMBA legislation, intended to be implemented in tandem with the WULBZ but not carried out until 1998. PEMBA introduced differentiated sector-level and company-level disability premiums and allowed employers to insure themselves on the private market for a period of five years. The state’s interest in redefining the terms of sickness and disability policy, heavily influenced by the political and economic crisis of the WAO, was to reform disability policy and survive the political consequences. To do this effectively, the governing cabinet explicitly chose to shift part of the collective responsibility towards employers (Tweede Kamer der Staten Generaal, 1996). By redefining the terms and conditions under 49

Transforming the Dutch welfare state

which protection would be provided, the state caused a shift in the division of responsibility and a drastic change in policy goals, so that policy learning or a so-called third order change (Hall, 1993) had taken place. The WAO crisis, while a catalyst for change, is not the only explanation for the reduction in collective protection. Another important social mechanism that explains the reduction in collective protection and the shift towards employers is a new politics mechanism. New politics, as discussed in earlier chapters, refers to political strategies aimed at blame avoidance during welfare state reform (Pierson, 1996). As researchers such as Pierson (2001) have argued, reforms of well-embedded welfare state policies, such as disability, are unpopular and can cause political backlash among voters. To avoid or mediate the political consequences of reform, actors employ methods of blame avoidance to seek a broader basis of support for reform. This is referred to here as a new politics mechanism. This differs from ‘old’ politics, whereby welfare state expansion was driven by party politics, a reflection of class cleavages in society.With the new politics mechanism, all political actors, independent of party affiliation, recognise the need for welfare state reform but are concerned about the political consequences, such as electoral defeat (Pierson, 2001). Relating this to disability policy, the empirical evidence demonstrates that a mechanism of old politics, in which the actions of political parties can be understood in terms of underlying class differences (Huber et al, 1993; Korpi, 1983) is less salient. Rather, new politics, in combination with the WAO crisis and a corporatist mechanism, helps explain the decollectivisation of sickness and disability. A prime example of evidence supporting the existence of blame avoidance can be found in the last stage of disability reform. There was a great deal of pressure to battle the problem of disability policy effectively leading up to the 2006 WIA legislation. Because despite all attempts to reform disability and sickness policy during the 1990s, the volume of benefit recipients remained high. In 1999, 6.8% of the population were receiving a disability benefit (see Figure 3.1 earlier in this chapter; CBS, 2010). The percentage of disability benefit recipients had barely declined from 7.4% of the working population in 1995. In fact, the total number of benefit recipients had topped the 900,000 mark,5 reminding policy makers all too clearly of the same high numbers associated with the late 1980s and early 1990s. Disability insurance was still perceived to be too generous, requiring further decollectivisation. The governing ‘purple’ coalition of Social Democrats (PvdA), Conservatives (VVD)6 and Democratic Liberals (D66) decided to investigate further possibilities for reforming disability insurance.The Donner Commission, a committee set up in 1999 by the state to carry out this investigation, published their report in 2001.This report set the stage for increased cooperation between the state and the social partners in the reform of disability protection. Following the removal of social partner influence in benefit administration, the social partners were now an attractive partner in blame avoidance.The state responded positively to the suggestions made by the Donner Commission and was clearly getting ready to engage the social partners in further reform. 50

Sickness and disability reform in the Netherlands

The cabinet supports the views and analyses put forth in the advice provided by the Donner Commission in regards to the WAO. Prevention and returning to work need to be a priority for employers, employees and administrators – more than is currently the case. Eligibility for the WAO should be, to a great extent, reserved for those who truly have no alternative. In addition, the cabinet supports the ‘sense of urgency’ put forth by the Donner Commission. (MinSZW, 2001) One year later, the Christian Democratic Party (CDA) won the parliamentary elections, and formed a cabinet together with the Conservatives and the right-wing party LPF. Any further reform of disability policy would go against the political interests of the CDA because these policies (including generous transfer policies focused on income replacement) are traditionally set up to protect an important base of their electorate – the male breadwinner. But when the Christian Democrats entered office in 2002, they were also worried about the financial viability of the Dutch welfare state over the long term, as outlined in their inaugural statement (MinAZ, 2002) and felt a need to reform social security policies. In addition, the Christian Democrats were clear in their intent to restore faith in political cooperation, that is, between the state and the social partners (MinAZ, 2002). To achieve these goals, the party actively sought out the social partners to be involved in the reform of social security, including disability policy. They relied on advice given by the social partners in the SER both in 2002 and in 2004 (interview fragment I38, 2009) regarding the final reform of sickness and disability policy in 2006. The 2006 legislation is also largely based on a proposal made by CDA’s natural ally, Christian trade union confederation CNV, which recommended separate legislation for fully sick and disabled workers and partially sick and disabled workers (CNV, 2001), recommendations later embraced by the Donner Commission and the social partners. Through these changes and blame avoidance attempts, sickness and disability effectively became perceived to be an issue for which employers should initially shoulder primary responsibility, followed by the welfare state if disability is long term. By actively involving the social partners in reform in this manner, the Christian Democrats recognised the political costs associated with further reform (Baccaro and Simoni, 2008;Visser, 2007), in essence broadening their base of power for reforms (Korpi, 2001), lending credence to a new politics mechanism of blame avoidance. While blame avoidance can explain how the state increased benefit selectivity and shifted responsibility towards employers, it cannot explain how it happened that the social partners and employers in particular, accepted this increased responsibility. From a theoretical perspective, the continued involvement of the social partners in the reform of disability policy is intriguing. On the one hand, it is expected that collectively organised actors function as a means of blame avoidance for politically weak coalitions (Baccaro and Simoni, 2008;Visser, 2007). On the other hand, Ebbinghaus and Hassel (2000) contend that the social partners remain important players of the political game because they often maintain an 51

Transforming the Dutch welfare state

administrative function in social security policy and they have veto opportunities as well, through self-regulation. While the administrative function of the social partners is no longer present in disability policy, the social partners are important players within the Dutch corporatist institutional setting, providing wanted and sometimes unwanted advice from the SER and the Labour Foundation (StAr). Both of these institutions, the SER and the StAr, make important contributions to policy formation in the Netherlands and are integral to the Dutch ‘polder’ model. The ‘polder’ model is characterised by consensus building in socioeconomic policy making, facilitated by the presence of consultative bodies such as the SER and the StAr.The presence of consensus building makes blame avoidance particularly attractive in the Dutch context. Within this setting, a corporatist mechanism is also important in explaining the decollectivisation of sickness and disability benefits. Corporatism helps account for the political exchange between the state and the social partners. In particular, ‘responsive’ corporatism (see Hemerijck, 1996) was evident. If corporatism is defined by the state sharing its public-order function with collectively organised and centralised actors, such as trade unions and employers (Traxler, 1999), responsive corporatism is a particular type of corporatism defined not only by the willingness of the state to share its public-order function but the willingness of the social partners to accept this responsibility. Hemerijck argues that responsive corporatism centres on high ‘societal support’ and ‘institutional integration’.The latter is defined by the state’s willingness to involve collective actors in the policy process and its definition of relevant policy issues. Societal support, on the other hand, is defined by Hemerijck as the willingness and capacity of the social partners to take part in the corporatist exchange.‘Under these conditions, the institutional structure of corporatist governance contains a high degree of decisional capacity to encourage a coherent domestic strategy of flexible adjustment. […] In its responsive format, corporatist governance is largely self-enforcing’ (Hemerijck, 1996: 195). In the case of the decollectivisation of disability and sickness policy in the Netherlands, the responsiveness of the social partners creates an effective means of blame avoidance for the state. ‘Politically, pressure was growing and that started in 1991 with that report [from the Buurmeijer inquiry7, MY]. Something had to happen and even though political parties were horribly divided, something had to happen. And in the SER, recognition was growing throughout the 1990s with the understanding that if we [the social partners and crown members of the SER, MY] don’t figure it out together then the government [political parties, MY] will do something that none of us wants.’ (I5, former crown member of the SER) In short, by cooperating with each other, the social partners attempted to maintain their influence in policy making.

52

Sickness and disability reform in the Netherlands

The social partners created numerous advisory reports and recommendations on sickness and disability policy, for example advisory reports in 1991, 1995, 2002 and 2004 (SER, 1991, 1995, 2002, 2004), advisory letters related to legislative changes in 2000, 2004 and 2005 (StAr, 2000, 2004a, 2005) and others, further evidence of their participation in a political exchange and the presence of a corporatist mechanism. However, the social partners’ willingness to play a role in Dutch policy making is not only dependent upon the presence of strong corporatist institutions such as the SER and the Labour Foundation, it remains dependent upon the state’s willingness to share its regulatory capacity (Hemerijck, 1996). The state can be more or less willing to share regulatory capacity with the social partners, resulting in different forms of corporatism. The state’s removal of the social partners from benefit administration in the early 1990s can be seen as a ‘shadow of hierarchy’ (Scharpf, 1997), with the state in essence threatening a further reduction of shared regulatory capacity. This could have led to an ‘immobile’ form of corporatism (Hemerijck, 1996), whereby the state is unwilling to share regulatory capacity and the social partners are absent from a political exchange. This did not occur because the state was able to pressure the social partners into cooperating with the state on reforms – evidence of an interaction between new politics (blame avoidance) and corporatist political exchange. Within a strong, corporatist institutional setting such as the Netherlands, it is in the social partners’ best interest to cooperate and remain ‘responsive’ to state policy (Hemerijck, 1996). By focusing on a common interest – remaining in the political game – the social partners managed to compromise and suggest reforms, which led to employers and trade unions accepting increased responsibility and increased selectivity. In essence, without cooperation, the social partners would possibly face more far-reaching reforms from the state. ‘In theory you have the same interest: to help as many people as possible into employment. […] But it [the advisory report] didn’t happen without a struggle. We worked very hard on it and we knew that if we didn’t provide a unanimous advice then the government would intervene. I think that would have led to even larger interventions for employers and employees than what we thought were sensible. In fact, we were condemned to work together. That’s what led to us eventually reaching a unanimous advice. But sometimes it was really touch and go.’ (I34, former trade union official) Through their concern for extensive state reforms, the social partners were able to work together and compromise on difficult issues, introducing increased selectivity and increased financial responsibility for employers, for example. The unitary mobilisation of the social partners was a positive development for the state and simultaneously offered an effective means of blame avoidance. With the social partners agreeing on reform in such a difficult policy area, the base of support and power for implementing these reforms was broader (Baccaro and 53

Transforming the Dutch welfare state

Simoni, 2008;Visser, 2007). The social partners, on the other hand, were willing to take part in the reform trajectory to shape the state’s reform to their own hand, demonstrating the effect this social mechanism has on the interaction between the state and the social partners. ‘So we had some conflicts with employers but I think that in the end, everyone recognised the importance of…of developing an idea together [about disability, MY] and doing it in such a way that it made a serious chance in the political arena. Because employers, just like us, had very little trust in what the politicians would do with it, I think, and that’s something that was particularly true for the WAO more than other issues.’ (I2, trade union representative) The state, for its part, facilitated cooperation from employers by creating a relatively financially neutral extension of employer responsibility although financial neutrality did not guarantee employer acceptance, however, as this policy maker explains: The first argument was that the reduction in WAO premiums that would possibly follow – because of course the benefits being paid out [of the collective resources, MY] would be decreased by one year – those would be fully put towards employers. So from a macro perspective, it would be fully neutral [financially, MY]. Next came the emotional side of it because some employers said, “Sure, it can be financially neutral but I don’t notice that. I don’t notice that I’ll be paying fewer premiums but if I employ someone who gets sick, I have to pay for two years.” That was the emotional side of it. Our response to that was: that was your own [employers, MY] advice in the SER and we are implementing the SER advisory report in an integral manner.’ (I38, former cabinet member) In sum, both a mechanism of new politics and a corporatist mechanism worked to create an environment conducive to compromise and reform. Coupled with the WAO crisis, these mechanisms created new perceptions of sickness and disability. Sickness and disability were no longer perceived to be fully outside the responsibility of the individual. Employers and individuals were now perceived to be increasingly responsible for the protection of sickness and disability, allowing for a reduction in the collective protection of sickness and disability through increased selectivity. By offering employers a relatively financially neutral solution to disability policy, it created room for employers to accept the shift of responsibility from the collective to firms. Both employers and trade unions were willing to take part in reforms to maintain their position within the corporatist institutional structure and trade unions could compensate for some of the reforms in collective labour agreements.Trade unions were also pleased with the additional 54

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focus on prevention and the reintegration of sick and disabled workers. The social partners, particularly trade unions, felt that by creating mutual obligations for prevention and reintegration for employers and employees, there would be a balance between the new, sharpened criteria and the rights and responsibilities of individuals and employers. Extending employers’ financial responsibility from one to two years would strengthen both employers’ and employees’ interests in terms of prevention and reintegration policies (SER, 2002: 87). Lastly, both employers and trade unions spoke of an increased willingness to take the necessary measures, even financially painful ones, to do something about the high number of disability benefit recipients (interview fragment I2, 2009; interview fragment I6, 2009).

A new role for employers With an increase in financial responsibility for disability and sickness protection falling to employers, firms must now decide how to cover these costs as well as how to focus on the prevention of sickness and disability. Whether employers insure themselves via the public or private market is a complex financial issue, so this matter is left for further research. The development of this new role for employers in disability prevention, however, is very much of interest here. This development is best explained by a corporatist mechanism, again, in particular ‘responsive’ corporatism (Hemerijck, 1996). The increase in employer responsibility via improved prevention demonstrates an increased capacity and willingness of the social partners to accept responsibility for disability and sickness policy. In return, employers have the freedom to insure part of the disability risk in the private market. During the reforms of the 1990s, disability and sickness protection were increasingly perceived by the state and the social partners as a shared employer and employee responsibility, and prevention took on increased importance. First, prevention became indirectly related to disability premiums with the 1998 PEMBA legislation (Tweede Kamer der Staten Generaal, 1996: 4). PEMBA was meant to be a large stimulus for prevention – the fewer cases of sickness and disability, the lower the premiums. Premiums were differentiated between sectors, and within each sector, among employers (Tweede Kamer der Staten Generaal, 1996: 18). In this sense, the intention of the law was to reduce dependence on collective insurance in the long term (disability), by making it financially more attractive for employers to work on the prevention of sickness and disability.The PEMBA legislation was integral to both prevention and insurance. By introducing differentiation in disability premiums, the possibility of opting-out and marketdriven disability insurance, the state intended to privatise those parts of disability insurance that it considered part of an unnecessary national, collective insurance. ‘A social security system which centres on income protection should a risk arise, needs to be transformed into a social security system in which the starting point is the prevention of that loss and reversing that loss’ (Tweede Kamer der Staten Generaal, 1996: 1). PEMBA opened the market of disability insurance up to 55

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private insurers (Tweede Kamer der Staten Generaal, 1996: 4), with policy makers assuming that increased competition in insurance would lead to a greater focus on prevention, which, as discussed later, has taken place through collective bargaining. PEMBA was abolished in 2008, a result of talks between the state and the social partners in 2004 (StAr, 2004b, 2008), but premium differentiation remained as part of the WGA legislation. Under WGA financing, premium differentiation is carried out in both the public and private sector. Another major stimulus for prevention was provided by the 2002 Gatekeeper legislation. Intended to increase the reintegration chances of employees with longer-term disabilities or illnesses, the Gatekeeper law specifies timelines for reporting illness or disabilities, as well as timelines for the employer and the employee to draw up reintegration plans inside or outside the firm. Noncompliance with these rules can lead to sanctions for either employer or employee (MinSZW, 2006). The Gatekeeper legislation clearly stipulates when illness and disability shift from being a private responsibility of employers and employees to a public responsibility – when, after two years, reintegration efforts have failed or are no longer relevant (Tweede Kamer der Staten Generaal, 2001). The state now clearly perceives sickness and disability to be a risk that can be influenced by individual and employer behaviour, either through prevention or through reintegration efforts, rather than as a passive risk that overcomes an individual. By 2004, the Gatekeeper legislation was adjusted to require employers to pay at least 70% of an employee’s salary during the first two years of illness or disability, rather than one year. During the first year this amount must be equivalent to at least the minimum wage, but this requirement ceases for the second year. Both the PEMBA and Gatekeeper legislation are excellent examples of how the responsibility for the prevention of sickness and disability has shifted to employers. How employers have dealt with this increased responsibility in terms of prevention is explained by a corporatist mechanism. First, without the presence of strong, corporatist institutions, these reforms would likely cause more resistance. Second, inherent in the corporatist mechanism is some type of political exchange. As we can see with PEMBA, employers accept increased responsibility in exchange for the opportunity to enter the private insurance market, which can be beneficial to employers, dependent upon the average cost of disability within the company. Private insurance, even now under the WGA legislation, is particularly attractive to companies with relatively low disability costs. And the Gatekeeper legislation was in essence financially neutral for employers, with the excess in social security premiums being redistributed to employers. The corporatist mechanism is also evident through the willingness on the part of both employers and trade unions to work collectively on improving the prevention of sickness and disability through collective bargaining.There has been an increase in agreements on physical and organisational working conditions in Dutch collective bargaining since the mid-1990s (see Figure 3.2). There has also been a significant increase in agreements on stress at work and illness-related absence. The increase in these arrangements was minor during the 1990s, but 56

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in the past nine years these arrangements, meant to improve the prevention of sickness and disability, have been increasing steadily, demonstrating the increased willingness of the social partners and employers to accept responsibility within the political exchange. In particular, collective agreements increasingly include arrangements aimed at preventing sickness-related absence and improving physical working conditions. The share of these arrangements peaked following passage of the WIA legislation in 2006. Efforts at prevention in collective bargaining are greater than efforts at reintegration; the increase in agreements about the internal and external placement of sick or disabled employees has been considerably smaller. Even here, however, the data demonstrate an increase in arrangements over the past decade. Figure 3.2: Working conditions regulations and covenant agreements in Dutch collective agreements: 1995–2009

Source: Ducadam data, 1995–2009, author’s own calculations.

Collective bargaining agreements that include these measures on working conditions are an instrument for employers and trade unions to focus on prevention within existing corporatist institutions. A trade union official explains that the focus on sickness prevention, particularly on making it attractive for employers to do something about sickness prevention, made a difference in approaching the issue of sickness and disability. ‘It started in construction. […] They really started to understand… they really understood that when working conditions weren’t good, there was a lot of absence. That was about sickness-related absence, even there. In the metal industry it wasn’t any different. […] By taking 57

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a few measures you saw that you could reduce it. […] Someone who has a long-term absence because they have a burn out and such, the classic advice of ‘Go home, go rest and then you’ll be fine’. Of course that’s the wrong advice, we know that now, we’ve known it for years.’ ‘But when did that change?’ [MY] ‘Well, it changed when people started pointing the finger at each other saying: you have to pay the bill. That was the idea of “the polluter pays”.’ (I12, former trade union official) While the data show an overall increase in agreements related to the prevention of disability and illness or the reintegration of workers, some sectors are more focused on prevention than others. For example, as one collective bargaining manager in the healthcare sector explained, agreements on the placement or reintegration of workers either within or outside the company are of little use in the healthcare sector where most companies are large enough to solve these issues within the sector (interview fragment I43, 2009). Working conditions, in contrast, are very important in the healthcare sector, particularly because this sector has one of the highest rates of illness-related absence. Yet another example of a corporatist mechanism is evident in how the social partners created a new instrument within existing corporatist institutions to focus more on preventing sickness and disability. Introduced during the 1990s, the socalled arbo covenants set targets for health and safety regulations in relation to sickness absence.These covenants formed the implementation of central goals in reducing sickness absence at the decentralised, sector level. ‘It was also the time of the Arboconvenanten, in which you tried to approach certain risks at the sectoral level. So we said to the negotiators attached to MHP unions: look and see what is an important risk within the sector in which you’re negotiating, because of course we’ve always looked at what are the top five risks in this sector. And if that’s what it is, take a look and see what you can do about it, concretely, in that sector.’ (I7, former trade union representative) The arbo covenants of the 1990s have now given way to arbo catalogues.The newly developed health and safety catalogues offer a means of customising health and safety regulations to the practicalities of individual sectors in the labour market (interview fragment, I7, 2009). The need for customisation at both the sector and company level in the prevention of disability and illness, as well as in the reintegration of workers on disability benefits, was reiterated by representatives of both employees and employers. In sum, while employers expressed a need for customisation, it is clear that there is an overall increase in attention for prevention in collective bargaining. 58

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Corporatist structures, in place for decades, ensure that employers and trade unions work together to improve the prevention of sickness and disability, both at the centralised (national) level by working on policy reforms, as well as at the decentralised level by creating collective bargaining arrangements or creating new instruments such as arbo covenants and catalogues. Moreover, there is now a large financial incentive for employers within each sector to do more to prevent sickness and disability, namely the avoidance of paying higher premiums.

Compensating for welfare reform The decrease in collective protection in the welfare state has meant an increase in individual and employer responsibility for sickness and disability. But within the corporatist context of the Dutch welfare state, this shift does not translate into an unchecked decline in collective protection or an end to classic solidarity within the welfare state because the significant decollectivisation of disability protection has gone hand-in-hand with a recollectivisation of protection in collective bargaining. The explanation for this shift is a mechanism of increasing returns within the corporatist institutional structure. The well-established, cooperative relationship between the social partners allows them to determine a common interest in preventing sickness and disability in the first place, and an interest to pool resources collectively to provide income protection when needed. In essence, it is a matter of a corporatist exchange. Disability protection in collective labour agreements, a form of occupational welfare (Rein, 1982), is closely related to disability arrangements in the welfare state, particularly because ‘collectively negotiated benefits offer politicians a means of avoiding blame by creating a mechanism of compensation for unpopular cuts in public programmes’ (Trampusch, 2006: 124). As Rein (1982) argues, there is a ‘fuzzy’ distinction between the provision of fringe benefits by the firm (occupational welfare) and welfare provided for by the state. In the Netherlands, while the implementation of disability and sickness reforms have marked a serious shift in the protection of the disability risk, particularly by differentiating between various groups of eligible recipients and increasing individual and employer responsibility, disability policy can still be dealt with collectively through collective agreements. As one policy maker explains, the law may reflect a decollectivisation of disability but protection provided for in collective agreements can differ from the law. ‘With the WIA and with the disability arrangement in general, you really need to look at what is happening in reality. Because the law is one thing, but the way in which people are protected against a risk is another.’ (I21, former crown member of the SER) Due to pressures for reform and the WAO crisis, the collective solidarity present in the generous sickness and disability scheme of the 1970s and 1980s has shifted from the welfare state to the realm of collective bargaining. Therefore, while 59

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collective protection has declined in the public sphere and entitlement to benefits has been made more stringent, a share of collective protection has been taken up by collective bargaining.8 This recollectivisation is a form of corporatist exchange. First, the social partners were able to help shape reform efforts in exchange for being a partner in governmental blame avoidance. Knowing that they can compensate for cuts in public welfare makes it easier to take up the position of blame avoidance partner. Second, income protection provided for in collective bargaining is also directly related to efforts at reintegrating ill or disabled employees back into employment, a quid pro quo between employers and trade unions, which also explains compensation efforts. As discussed later, employers were willing to agree to supplement income protection in collective agreements on the condition that employees would exhaust all efforts to return to employment quickly. The data on secondary income benefits for disability provided for by collective bargaining show that by 2009, nearly 100% of collective agreements offer supplemental income for disability in both the first and second year of illness or disability (see Figure 3.3). Moreover, by 2009, 70% of all collective agreements that offer supplemental income in the second year of illness do this at a rate of 70% or more. In this manner, collective agreements compensate for cuts in public provision, confirming earlier findings by Trampusch (2006). The data show that during the mid-1990s, few collective agreements offered supplemental income protection for illness or disability. It was not until 2001, just prior to the implementation of the Gatekeeper legislation, that collective agreements included these benefits en masse. However, the number of collective agreements compensating beyond the 70% rate in the second year is levelling off.The number of collective agreements that offered a full 100% income supplement in the second year reached its peak in 2002 (49%) and has now declined to 26%, likely in response to government critique of compensation efforts.The perception among most policy makers, however, is that collective agreements continue to provide more than 70% protection during both years of illness or disability. State policy makers contend that the compensation of disability benefits in collective agreements explains why there was so little commotion surrounding these early reforms and the resulting decrease in benefits. ‘Looking back, it’s not strange that people were not in an uproar about it. I can remember that when the TBA legislation had just been implemented [back in the early 1990s, MY] that the central government was the first employer to repair the TBA-gap and Minister De Vries [Minister of Social Affairs and Employment at the time, MY] was furious. Smoke was coming out of his ears.’ (I44a, former governmental policy maker) The governmental policy makers quoted here is pointing to the fact that it’s easier for the social partners to acquiesce to reform if there is a possibility that they can compensate for these reforms in collective bargaining. This position 60

Sickness and disability reform in the Netherlands Figure 3.3: Supplemental income arrangements in Dutch collective agreements: 1995–2009

Source: Ducadam data, 1995–2009, author’s own calculations;Yerkes and Tijdens, 2010.

of the social partners is strengthened by certain limitations in state action. In particular, the reach of state power into collective bargaining is limited. With the WIA legislation in 2006, the state attempted to prevent the compensation of disability reforms in collective bargaining by passing legislation against it. The state wanted the social partners to agree to reforms, as blame avoidance partners. If the social partners subsequently compensated for these reforms in collective bargaining, the effectiveness of blame avoidance would be minimised. Known as the BALTZ legislation (Bovenwettelijke Aanvulling op de verplichte doorbetaling in het Tweede Ziektejaar), the law was intended to make it illegal for employers to supplement beyond 70% of an employee’s earnings during the second year of illness.9 ‘That was a very strict legislative proposal. It ended up not going through because of the Autumn Agreement of 2004 [between the social partners, MY] but the BALTZ was rescinded based on negotiations with the social partners. We didn’t develop any new measures. Moreover, that’s a very tricky terrain because ILO [International Labor Organisation, MY] treaties guarantee freedom of negotiation. So the government can’t say ‘We forbid supplemental payments [beyond the 70%, MY] because that would be in violation of…these are the basic treaties of the ILO.’ (I44b, governmental policy maker) The text of the Autumn Agreement mentioned here, while explicitly stating that collective agreements will not agree to supplements beyond a two-year 61

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total of 170% (100% in the first year plus 70% in the second year), also leaves room for interpretation at the decentralised level (StAr, 2004b). Both employers’ organisations and trade unions agreed that: Open negotiations will be held at the local level about supplementing the statutory payment of 70% of an employee’s wages during his or her first and second years of illness, in conjunction with the statements made in section 1.These negotiations will be geared to the effects on prevention, reintegration, participation and income protection. The total sum of sick pay issued to an employee will not exceed 170% of his or her last-earned wages calculated for the two years of illness taken together, without prejudice to the option of agreeing on additional, specific employment conditions aimed at stimulating accelerated reintegration and participation effects. Where necessary, existing employment conditions will be revised accordingly. (StAr, 2004b: 2) While the social partners agreed, at the central level, to not compensate beyond 170% in this two-year period, the implementation of central agreements is not mandated, and in many cases collective bargaining negotiators in different sectors or unions do what they can to circumvent these recommendations. Their goal is to obtain as many collective agreements as possible wherein 100% income protection is provided because many negotiators still perceive disability to be a collective responsibility (interview fragment I39, 2009). In that sense, there is a relatively strong concentration of power among trade unions at the decentralised level to obtain agreements from employers on providing continued protection in a different form. But even employers at the decentralised level are willing to compensate for welfare reform, in exchange for agreements on prevention and measures to be taken by employees to prevent sickness and disability because they bear more financial risk – again, a quid pro quo. Collective bargaining negotiators have found creative ways of compensating for changes in governmental disability legislation while staying within the boundaries of the law. When I spoke with a collective bargaining manager about the WIA legislation and how it is implemented in collective bargaining, this person explained how they managed to find a way around the two-year 170% restriction. ‘So another issue was, what can you agree to centrally and at some point that was all about: how much is it [the supplement to disability benefits, MY]? In answer to that we came up with the famous text: with active re-integration, you can go above that amount. We talked about that for a very long time. Goddammit, what a pain in the ass that was. Eventually, the agreement in most collective agreements was, and that’s in the text: in the second year [of illness, MY] you get 70 per cent and with active reintegration 90 or 100. That’s [this specific rule, MY] almost always there. […] And then I had to agree to what 62

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active reintegration was at [company name, MY].We agreed to a text and that was pretty much just meeting the Gatekeeper requirements.’ (I31, trade union collective bargaining administrator) By agreeing to only compensate beyond 70% during the second year if proper prevention and reintegration measures are followed, collective bargaining negotiations circumvent the intent of the law, yet contribute to the intent of the reform. Another example of creative solutions can be found in the agricultural sector, where an employees’ insurance was set up alongside employers’ insurance to supplement benefits to 100% (interview fragment I47, 2009). Compensation beyond 70% in the second year is not only done because social partners are unhappy with the effects of disability reform. As one collective bargaining negotiator explained, “This means of course that the employer will invest more in prevention because it’s so expensive when a sick employee receives a full income supplement – that he’ll try and prevent his employees from becoming sick” (interview fragment I39, 2009). In other words, social partners agree with the intent of the reform, going along with the chosen path of privatisation and increased responsibility for employers and employees, but they often prefer collective solutions within the existing strong corporatist institutional context and can do so in a quid pro quo exchange of compensation in return for prevention. If the state was truly against this compensation in collective bargaining, it could choose not to carry out general extension practices, whereby collective bargaining agreements are extended to all companies within an entire sector. Despite threatening to do so in 2004, the state did not follow through on this threat.The reason for this is that on the one hand, compensation in collective agreements has levelled off in the past two years, and on the other hand, the compensation provided for by the social partners is an exchange for their participation in the reform of disability policy within the welfare state. As Trampusch (2006: 126) succinctly states,‘All in all, the collectively negotiated benefits satisfy the interest of all three actors: state interest in retrenchment, and unions’ and employers’ interest in stabilising their own organisations against the potentially destabilising effects of the decentralisation of the collective bargaining system’. This institutionalised corporatist exchange evident in the interaction between Dutch welfare state and industrial relations actors, provides positive feedback effects, or increasing returns, satisfying all actors involved.

The administration of benefits As discussed earlier, prior to the reforms of the 1990s, the social partners were in charge of administering sickness and disability benefits. This shift in the administration of disability insurance has already been analysed in detail (Bannink, 2004) and is therefore only discussed here in terms of the presence of a corporatist mechanism and its relevance for explaining subsequent, underlying power distributions among the state and the social partners. ‘While 63

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decision-making on benefits was, as it had always been, a consensual process that resulted in a broadly shared preference, administrative reform remained a strongly conflict-ridden process with opposite results’ (Bannink, 2004: 194).The conflictridden reform of benefit administration and the relatively less conflict-filled reform of benefits up until the late 1990s both reflect underlying power distributions, as power is manifested both within and outside conflict (Korpi, 2001). In the end, the administration of disability benefits shifted to the public sphere, taking away the social partners’ direct influence in benefit administration, which affected not only the distribution of power between the state and the social partners but also the willingness of the social partners to work together on later reforms. The issue of administration came back to the forefront during the final stages of reform in 2004.While the government based the majority of the WIA legislation on the SER advisory reports of 2002 and 2004, more so than recommendations made in the Donner report (interview fragment I38, 2009; Tweede Kamer der Staten Generaal, 2005), the administration did not accept the social partners’ plan as a whole and deviated from it with the implementation of the legislation in 2006. These differences included: public administration of the WGA rather than private administration as advised by the SER; setting the benefit level for fully sick and disabled individuals at 70% rather than 75%; and maintaining the PEMBA legislation (SER, 2002, 2004;Tweede Kamer der Staten Generaal, 2005). The latter two issues, the level of IVA benefits and the PEMBA legislation, would be put in line with the SER advice retroactively10 if the annual inflow into the IVA was less than 25,000 individuals in 2006 and if collective agreements did not supplement beyond 70% in the second year of illness, in accordance with the Autumn Agreement from the Labour Foundation (Tweede Kamer der Staten Generaal, 2005: 22).The private administration of the WGA, however, was a point of contention for the social partners. ‘The SER’s philosophy at the time was: the IVA, that deals with the most vulnerable cases of people who really can’t work anymore – that’s a government responsibility. All the rest, that’s where we give our all for activation, for mobilising the remaining labour capacity – and to do that, you need to put the onus of responsibility where the effort takes place. So in labour organisations, in companies. In other words, administration at a lower level and privately insurable. Particularly because, at least that’s something I’ve always thought, particularly because… naturally, illness-related absence and mandated payment of salary in that period is insured privately, re-integration is a private matter, occupational health and safety services is a private matter.These things are all related. So when people have something wrong with them, or partially something wrong, then they have to deal with all these types of things. Well, then it’s very unpleasant if you have to go to a private office for one part, prevention and reintegration, and a public office for the other part, income supplement or whatever else 64

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for the WGA.You need to make that whole, that was our philosophy.’ (I19, former crown member of the SER) The cabinet chose not to go along with private administration of the WGA at the time, but the centre-left cabinet agreed to private administration of the WGA in its coalition agreement of 2007 (MinAZ, 2007: 26). The deviation from the SER’s advice demonstrates a limitation to the social partners’ power within the corporatist institutional setting. ‘[…] Being involved in the administration of benefits contributes to these actors’ ability to organise the loyalties of their members or workers and control their behaviour. To have public agencies take the place of bipartite ones in administration nullifies labour’s and employers’ organisations’ capacity to do so’ (Bannink, 2004: 183). In essence, by placing the administration of disability insurance in the public sphere and by reiterating this again in 2006 with the administration of the WGA insurance, the state increased its control of the policy spheres influenced by the social partners. In this sense, the state disengaged the social partners in the corporatist exchange. In contrast to theoretical expectations (Hemerijck, 1996), however, this development is not due to a mechanism of immobile corporatism, whereby the state is no longer willing to share regulatory capacity with the social partners. Rather, the state has managed to maintain a high degree of willingness to involve collectively organised actors in other policy areas, while limiting the influence of the social partners in the area of disability benefit administration, suggesting that in this new relationship of blame avoidance and corporatist exchange, the state has found a means of compelling the social partners to cooperate (Ebbinghaus and Hassel, 2000).

Public support of disability reforms One of the major developments resulting from the reform of disability and sickness policy has been the increase in individual responsibility.Workers who become ill or disabled are now confronted with stricter entitlement rules and are expected to shoulder some of the responsibility for prevention in order to be eligible for benefits. Furthermore, with the decrease in benefit levels, individuals can also choose to insure themselves against a loss of income to cover the gap between benefit levels and their own income level should they become sick or disabled. This chapter does not attempt to explain individual perceptions of disability policy or welfare reform in this area, as this is beyond the scope of this research.11 It is possible, however, to consider whether individual perceptions, aggregated in public opinion, have shown an acceptance of these changes in entitlement rules and an acceptance of the increase in individual responsibility and how that affects the formation of state or social partner interests and their subsequent interaction. As discussed earlier in this book, research has shown public support to vary across different risk forms based on perceptions of deservingness and institutionalised ideas of reciprocal fairness (Mau, 2003; van Oorschot, 2006). Studies attempting 65

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to explain the continued legitimacy of welfare states have shown that citizens continue to support welfare state policies out of self-interest (De Beer, 2007) and that welfare state legitimacy depends on how welfare states meet the economic needs and interests of its citizens (Achterberg et al, 2010: 9–25; Korpi and Palme, 1998). Contrary to new social risks, where a mechanism of public support can help push for protection, in the case of old social risks public opinion will either approve or disapprove of existing, old social risk policies. The data here do not conclusively demonstrate the presence of a public support mechanism, either in the form of public support for or public disapproval of disability reform and more research will be needed to determine the effect of public opinion on these reform efforts. Looking at Dutch public opinion data on welfare state spending, there are a number of trends visible.The trend in public support of welfare state expenditures (see Figure 3.4), where a higher score represents more support for public expenditures, shows that support was at a low point during the 1980s, but that there has been an increase in public support of welfare state expenditures and this finding is not surprising. Research from Achterberg and colleagues (2010) has shown that as the welfare state retrenches its policies, the public increasingly supports increased expenditures. In addition, in regards to disability expenditures, while there has been a decline in public support in recent years, the overall trend is positive (see Figure 3.5).With the WAO crisis of the early 1990s and extensive reform of disability and sickness policy, this decline in public support in recent years is also not surprising. The decline in support first occurs in the early 1990s during the WAO crisis and again at the start of the 21st century when it turned out that reforms of disability policy had done little to affect the number of benefit recipients.While more research would be needed to determine the causes of the change in public opinion, it is feasible that, given the extremely high numbers of benefit recipients, public support of disability expenditures declined because of perceived misuse. Throughout the 1990s, an increasing number of people felt that social security arrangements were being misused in the Netherlands (see Figure 3.6; Becker, 2000). Despite perceived misuse from the public, support for disability arrangements remains positive. Moreover, social unrest leading up to the reforms of 2006 points to the complex nature of understanding public support in relation to policy development. In 2004, following numerous proposals for the reform of welfare state arrangements, most importantly the intended reforms of pension and early retirement (see Wiekenkamp, 2011, forthcoming) but also the proposal of the WIA legislation to be introduced in 2006, Dutch trade unions successfully organised a number of strikes and protests. In September of 2004, roughly 30,000 people gathered on the Coolsingel (a main shopping street) in the city of Rotterdam and one month later, between 200,000 and 300,000 people gathered on Amsterdam’s Museumplein (Museum Square) in October of 2004 to protest the state’s plans for pension (and disability) reforms.These protests clearly left an impression on policy makers at the time (interview fragment I45, 2009). But the overall effect of public 66

Sickness and disability reform in the Netherlands Figure 3.4:Trend in public support for welfare state expenditures, 1980–2004

Source: Becker, Nauta & SCP, 1985; Becker & SCP, 1995; Becker & SCP, 2000; SCP, 2004; author’s own calculations.

Figure 3.5:Trend in public support of disability benefits, 1980–2004

Source: Becker, Nauta & SCP, 1985; Becker & SCP, 1995; Becker & SCP, 2000; SCP, 2004; author’s own calculations.

67

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opinion on the reform process is likely limited. Employers and trade unions are more focused on representing the interests of their members; and well-established state policy has been found to be rather unaffected by public opinion (Raven et al, 2011). More research is needed in this area, for example to determine the effect of public opinion on the policy process in times of social stability versus social unrest, as was the case with the protests in 2004. Figure 3.6:Trend in public perception of misuse of social security arrangements, 1980–2004

Source: Becker, Nauta & SCP, 1985; Becker & SCP, 1995; Becker & SCP, 2000; SCP, 2004; author’s own calculations.

Conclusions This chapter demonstrates that the perception and management of sickness and disability has greatly changed in the Netherlands. Originally intended as a passive, full income support scheme of benefits provided by the welfare state, sickness and disability policy underwent serious changes to policy goals. From a generous welfare state policy providing passive, collective income support, disability has been dismantled and significantly decollectivised, with a focus on activation and restrictive collective benefits in the welfare state as well as increased responsibility for employers and individuals. This change can be traced to five important developments: a reduction in collective protection offered by the welfare state, an increase in employer responsibility, an increase in compensation through collective bargaining, a shift in the administration of benefits towards the public sector and an increase in individual responsibility.

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Sickness and disability reform in the Netherlands

Originally perceived as a collective social risk, disability is now perceived to be selectively collective and primarily the responsibility of employers and individuals. At the same time, there has been a recollectivisation of sickness and disability benefits in collective agreements. In that sense, the case of sickness and disability policy provides an excellent illustration of the interaction of welfare state and industrial relations actors within the corporatist institutional structure.With strong collective bargaining structures, the social partners were able to compensate for the continued decollectivisation of protection within the welfare state, thereby maintaining the collective nature of disability protection. The interaction of the state and the social partners was also essential to the overall process of reform, in that the state could engage the social partners in blame avoidance, and the social partners could influence the reform process by remaining in the political game. What made this all possible? As this chapter has shown, numerous social mechanisms are behind these changes. But one of the most important explanations is the overarching WAO crisis. An endogenous shock such as the WAO crisis creates opportunities for actors to search for solutions within existing institutions. Alongside the WAO crisis, many of the social mechanisms discussed here are related to the process of interaction between these actors in the corporatist welfare state: interactions of varying distributions of power, interactions based on the willingness of the different actors to take part in a political exchange – these interactions are driving the process of reform and change. In that sense, this chapter supports the use of an actor-centred institutionalist framework. Salient mechanisms are found both at the level of actors and institutions, as well as their interaction – the process through which risk protection is developed. Not all of the expectations outlined in the previous chapter have been supported by this study, however. For example, ‘old’ politics, whereby class struggles take shape in party politics, are not driving the reform process, in line with findings from Pierson (2001). A mechanism of increasing returns in the welfare state is also absent, as the WAO crisis created a context in which actors gradually needed to move away from path-dependent policy options. Despite the far-reaching reforms of the past 15 years, a number of challenges remain. One of the most pressing issues is the WAJONG benefit, which provides disability benefits to young workers between the ages of 17 and 30 years old. A recent explosion of WAJONG recipients prompted politicians to speak of a new WAO debacle (interview fragment I33, 2009). New legislation passed in 2010 is intended to reduce the number of WAJONG claimants, but whether this will achieve the desired effect remains to be seen. Moreover, both political actors and the social partners have expressed concerns about the group of individuals who are not eligible for disability benefits under the current law, the so-called 35-min group.While the intention of the 2006 WIA legislation is that the social partners will work together to provide alternative employment, in reality, this group is often difficult to place in alternative employment and this can lead to precarious employment or benefit situations. Lastly, while the issue seems to have subsided recently, it was mentioned in almost every interview and is at the centre of 69

Transforming the Dutch welfare state

disability policy – whether to continue to treat disability as a risque social versus a risque professionel.The intention of disability benefits to cover disability as a social risk, rather than in a more narrow definition of a labour risk, is a fundamental part of the Dutch welfare state. Whether this broad definition of a social risk will be maintained is an issue that will likely continue to be debated in future discussions of the welfare state. Notes  Author’s own calculations based on benefit statistics and the total annual working population aged 15–64. Benefit recipients include benefits under the old system (WAO) but also WAJONG (young disabled workers), self-employed disability benefit recipients (WAZ) and later recipients under the new system (WIA). 1

 The data for this chapter are discussed in the Appendix.

2

 The English translation of these arrangements is taken from the Ministry of Social Affairs and Employment website: www.minszw.nl.The translated titles do not convey the important change in discourse, however. Previously referred to as occupational disability, the new law refers to occupation ability. 3

  An overview of these legislative changes can be found in Table 3.1, presented later in this chapter. Although formally outside the scope of this study, which starts in 1995, the reforms of the three years prior to 1995 are included in this table as they provide an important context for understanding other legislative measures which build on these initial reforms. It should also be noted that more reforms to disability arrangements are planned for the coming years, up through and including 2012. 4

  There are some inconsistencies in the data. Statistics Netherlands (CBS) reports 925,900 benefit recipients in 1999, but the archival data reports a total of 855,000 for 1999 (CBS, 2010). According to CBS, this smaller number is due to a revision of the data carried out at a later stage. The revised data are used in the calculations here. 5

  The Conservative Party, the VVD, is referred to as the Liberal Party in earlier discussions of the Dutch welfare state (see, for example,Visser and Hemerijck, 1997).While this party is referred to as ‘the liberals’ in Dutch, to use the word liberal here would be confusing as it suggests a left-sided political affiliation. This is not the case with the VVD, as they are situated on the right-hand side of the political spectrum in the Netherlands. To avoid confusion with different interpretations of the word ‘liberal’, they are referred to throughout this book as the Conservative Party. 6

 The Buurmeijer inquiry was a parliamentary inquiry into the WAO crisis in 1993.

7

  It must be noted, however, that while the coverage of collective bargaining is high in the Netherlands, with nearly 80% of employees covered by a collective labour agreement, 20% of employees are not covered, including a growing group of self-employed workers (single person firms without employees). 8

70

Sickness and disability reform in the Netherlands   The issue of compensation in collective bargaining was also brought up in 2000, when a report issued by the Scientific Council for Government Policy advised that compensation in collective bargaining was reducing the financial stimulus for employers and employees to work on the reform of disability policy (WRR, 2000).Trade union organisation CNV responded vehemently to the suggestion that ill or disabled workers would receive only 70% of their previous earnings (CNV, 2000) and vowed to protest against any attempt by the government to change this. The government did not follow the advice of the WRR at that time. 9

  Both issues were resolved in the years that followed. Benefit levels were increased retroactively to December 2006 (from 70 to 75%) in July of 2007 (MinSZW, 2007) and PEMBA legislation was rescinded in 2008 (StAr, 2008). 10

  For more detailed discussions on individual perceptions of welfare development, see Achterberg et al, (2010). 11

References Achterberg, P., Van der Veen, R. and Raven, J. (2010) Omstreden Solidariteit, Amsterdam: Aksant Publishers. Baccaro, L. and Simoni, M. (2008) ‘Policy Concertation in Europe: Understanding Government Choice’, Comparative Political Studies, 41 (10): 1323–48. Bannink, D. (2004) The Reform of Dutch Disability Insurance, Twente: University of Twente. Becker, J. W. and SCP (1995) ‘Culturele Veranderingen in Nederland 1995 –CV 1995 [computerfile] (Cultural Changes in the Netherlands)’, Amsterdam: Steinmetz Archives. Becker, J. W. and SCP (2000) ‘Culturele Veranderingen in Nederland 2000 – CV 2000 [computerfile] (Cultural Changes in the Netherlands)’, Amsterdam: Steinmetz Archives. Becker, J.W., Nauta,A. N. and SCP (1985) ‘CultureleVeranderingen in Nederland 1985 – CV 1985 [computerfile] (Cultural Changes in the Netherlands)’, Amsterdam: Steinmetz Archives. Becker, U. (2001) ‘A “Dutch Model”: Employment Growth by Corporatist Consensus and Wage Restraint? A Critical Account of an Idyllic View’, New Political Economy, 6 (1): 19–43. CBS (2010) ‘CBS Statline’, Centraal Bureau voor de Statistiek (Statistics Netherlands) 7 January 2010. CNV (2000) ‘CNV “Voorstel WRR absoluut onbespreekbaar”’: CNV. CNV (2001) ‘CNV onderschrijft Donner op hoofdlijnen’: CNV. De Beer, P. (2007) ‘Het profijt van de middenklasse’, S&D, 64: 26–34. Ebbinghaus, B. and Hassel,A. (2000) ‘Striking deals: concertation in the reform of continental European welfare states’, Journal of European Public Policy, 7 (1): 44–63. Geertz, C. (1973) The Interpretation of Cultures; Selected Essays, New York: Basic Books.

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Goslinga, H. (2001) ‘Donner kiest voor calvinistische aanpak van WAO-kwestie’, Amsterdam: De Persgroep Nederland. Hall, P. A. (1993) ‘Policy Paradigms, Social Learning, and the State: The Case of Economic Policymaking in Britain’, Comparative Politics, 25 (3): 275–96. Hemerijck, A. (1996) Corporatist immobility in the Netherlands, in C. Crouch and F. Traxler (eds) Organized Industrial Relations in Europe: What Future?, pp 183–226. Avebury: Aldershot. Huber, E., Ragin, C. and Stephens, J. D. (1993) ‘Social Democracy, Christian Democracy, Constitutional Structure, and the Welfare State’, The American Journal of Sociology, 99 (3): 711–49. Korpi, W. (1983) The Democratic Class Struggle, London and Boston: Routledge and K. Paul. Korpi,W. (2001) ‘Contentious Institutions’, Rationality and Society, 13 (2): 235–83. Korpi, W. and Palme, J. (1998) ‘The Paradox of Redistribution and Strategies of Equality: Welfare State Institutions, Inequality, and Poverty in the Western Countries’, American Sociological Review, 63 (5): 661–87. Mau, S. (2003) The Moral Economy of Welfare States: Britain and Germany Compared, London and New York: Routledge. MinAZ (2002) ‘Regeringsverklaring 2002 (Government Inaugural Statement)’, The Hague: Ministerie van Algemene Zaken (Ministry of General Affairs). MinAZ (2007) ‘Regeerakkoord (Coalition Accord)’, Den Haag: Ministerie van Algemene Zaken. MinSZW (2001) ‘Kabinet vraagt SER advies over WAO voorstel commissie Donner’, Den Haag: Ministry of Social Affairs and Employment. MinSZW (2006) ‘Wet Verbetering Poortwachter’, Den Haag: Ministry of Social Affairs and Employment. MinSZW (2007) ‘Uitkering volledig arbeidsongeschikte WAO`er op 1 juli 2007 van 70 naar 75 procent’, Den Haag: Ministry of Social Affairs and Employment. Pierson, P. (1996) ‘The new politics of the welfare state’, World Politics, 48 (2): 143–79. Pierson, P. (2001) The New Politics of the Welfare State, Oxford and New York: Oxford University Press. Raven, J., Achterberg, P., van der Veen, R. and Yerkes, M. (2011) ‘An Institutional Embeddedness of Welfare Opinions? The Link between Public Opinion and Social Policy in the Netherlands (1970–2004)’, Journal of Social Policy, 40 (2): 369–86. Rein, M. (1982) ‘The Social Policy of the Firm’, Policy Sciences, 14 (2): 117–35. Scharpf, F. (1997) Games Real Actors Play: Actor-Centred Institutionalism in Policy Research, Boulder: Westview Press. Scharpf, F.W. (2000) ‘The viability of advanced welfare states in the international economy: vulnerabilities and options’, Journal of European Public Policy, 7 (2): 190–228.

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SCP (2004) ‘Culturele Veranderingen in Nederland 2004 – CV 2004 [computerfile] (Cultural Changes in the Netherlands)’, Amsterdam: Sociaal Cultureel Planbureau, Steinmetz Archives. SCP (2004) ‘Sociaal en Cultureel Rapport 2004’, Den Haag: Sociaal Cultureel Planbureau. SER (1991) ‘Advies Ziekteverzuim en Arbeidsongeschiktheid’, Den Haag: Sociaal Economische Raad. SER (1995) ‘Advies Kabinetsvoornemens WAO’, Den Haag: Sociaal Economische Raad. SER (2002) ‘Werken aan arbeidsongeschiktheid’, Den Haag: Sociaal Economische Raad. SER (2004) ‘WAO Advies’, Den Haag: Sociaal Economische Raad. StAr (2000) ‘Briefadvies WAO’, Den Haag, Stichting van de Arbeid (Labour Foundation). StAr (2004a) ‘Briefadvies WAO’, Den Haag, Stichting van de Arbeid (Labour Foundation). StAr (2004b) ‘Najaarsakkoord (Autumn Agreement)’, Den Haag, Stichting van de Arbeid (Labour Foundation). StAr (2005) ‘Briefadvies Hervorming WIA’, Den Haag, Stichting van de Arbeid (Labour Foundation). StAr (2008) ‘Evaluatie Participatietop’, Den Haag, Stichting van de Arbeid (Labour Foundation). Trampusch, C. (2006) ‘Industrial relations and welfare states: the different dynamics of retrenchment in Germany and the Netherlands’, Journal of European Social Policy, 16 (2): 121–13. Traxler, F. (1999) ‘The state in industrial relations: A cross-national analysis of developments and socioeconomic effects’, European Journal of Political Research, 36 (1): 55–85. Tweede Kamer der Staten Generaal (1996) ‘Memorie van Toelichting PEMBA’, Den Haag: Tweede Kamer der Staten Generaal. Tweede Kamer der Staten Generaal (2001) ‘Memorie van Toelichting Poortwachter’, Den Haag: Tweede Kamer der Staten Generaal. Tweede Kamer der Staten Generaal (2005) ‘Memorie van Toelichting WIA’, Den Haag: Tweede Kamer der Staten Generaal. Van derVeen, R. (2001) L’Histoire Se Repete? Honderd jaar uitvoeringsorganisatie sociale verzekeringen, in A. P. C. M. Jaspers, F. M. Noordam,W. J. H.V. Oorschot and F. J. L. Pennings (eds) ‘De Gemeenschap is Aansprakelijk...’ Honderd jaar sociale verzkering 1901–2001, pp 67–87. Den Haag: Koninklijke Vermande. Van Oorschot, W. (2000) ‘The Battle against Numbers: Disability Policies in the Netherlands’, European Journal of Social Security, 2 (4): 343–61. Van Oorschot, W. (2006) ‘Making the difference in social Europe: deservingness perceptions among citizens of European welfare states’, Journal of European Social Policy, 16 (23): 23–42.

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Visser, J. (2007) ‘De wankele evenwichten van het corporatisme’, Beleid en Maatschappij, 34 (1): 6–22. Visser, J. and Hemerijck, A. (1997) A Dutch Miracle: Job Growth,Welfare Reform and Corporatism in the Netherlands, Amsterdam: Amsterdam University Press. Wiekenkamp, N. (2011, forthcoming) ‘Omkering van beleid. Beleidsleren van overheid en sociale partners in de hervorming van vervroegde uittredinsgregelingen in Nederland’, Amsterdam: University of Amsterdam. WRR (2000) ‘Doorgroei van Arbeidsparticipatie’, Den Haag: Sdu. Yerkes, M. and van der Veen, R. (2011) ‘Crisis and Welfare State Change in the Netherlands’, Social Policy and Administration, 45 (4): 430–44. Yerkes, M. and Tijdens, K. (2010) ‘Social risk protection in collective agreements: Evidence from the Netherlands’, European Journal of Industrial Relations, 16 (4): 369–83.

74

FOUR

Collective childcare protection: the new workfare Issues such as caring and family policy have received increased attention within the welfare state literature during the past decades (Daly and Rake, 2003; Lewis, 2001; Orloff, 1993; Saraceno, 2011). As sociocultural and economic changes have taken place, in particular the spectacular rise in women’s labour market participation, welfare state expenditures in family policy and welfare state approaches to care responsibilities in particular, have become the focus of research. From a welfare regime perspective, variation in childcare policies across countries has been explained in line with the delineation of social rights and protection evident in different regime types or the extent to which welfare states take up familial care responsibilities (Esping-Andersen, 1999; Lister, 1997; Saraceno and Keck, 2010). Subsequently, more detailed comparative analyses of care policies emerged (see, for example Gornick et al, 1996; Plantenga and Remery, 2005;Yerkes, 2006). Only recently has childcare received attention as a ‘new’ social risk (Esping-Andersen, 1999, 2009; Taylor-Gooby, 2004). As family structures have become increasingly complex and women’s labour market participation continues to increase, welfare states increasingly concern themselves with the question of responsibility for social risks in relation to the family. In particular these changes have ‘undermined assumptions about the best mix of public and private responsibility for care’ (Jenson, 2006: 28). From a welfare state perspective, the Dutch approach to childcare is intriguing. With a strong male breadwinner legacy, the Dutch welfare state historically maintained low levels of childcare provision (Knijn, 1994a; Lewis, 1992). The lack of childcare was directly related to a cultural and policy preference of having the care of children take place within the home, preferably done by mothers (Knijn, 1994b;Yerkes and Visser, 2006). More recently, childcare policy has shifted dramatically in the Netherlands as perceptions of childcare as a social risk have changed, leading to the semicollectivisation1 of childcare. This chapter explores this remarkable development, examining how childcare is perceived by welfare state actors and the social partners and how these perceptions have changed across time, giving shape to a new form of welfare.

The development of childcare policy in the Dutch welfare state Until the 1990s, Dutch childcare policy could best be described as underdeveloped (Tijdens and Lieon, 1993). As Figure 4.1 shows, childcare supply was low (CBS, 75

Transforming the Dutch welfare state

2010); in addition, there were poor public perceptions of childcare and the institutional structure supported informal over formal care options (Portegijs et al, 2006a). The current picture of childcare in the Netherlands has changed significantly, with childcare supply having more than tripled during the past 15 years. However, taken in the context of an initially very low level in 1995, this growth seems less impressive. As we can see in Figure 4.1, this near tripling of childcare places in the Netherlands is primarily attributable to an expansion of company places – childcare places bought by employers. The increase in company childcare places has been in both wraparound and out-of-school care (CBS, 2007). Subsidised childcare places, offered by municipalities, were common during the initial development of childcare policy but were made obsolete by legislation passed in recent years, a point discussed later. In contrast, childcare places subsidised by the Ministry of Social Affairs and Employment (SAE places) remained relatively stable up until the point of new legislation as well. Following legislation in 2005, childcare places are no longer divided among different types of childcare, which explains why Figure 4.1 no longer shows a distinction in childcare places after 2005. The care of children is historically anchored within the familial sphere in the Netherlands (Knijn and Kremer, 1997). Studies from the Netherlands Institute for Social Research (SCP) and others have consistently shown that the majority of households prefer to have care take place within the home (generally by the mother), at least some number of days each week and otherwise informal care is preferred over Figure 4.1: Aggregate childcare supply in the Netherlands in absolute numbers, excluding half day care (1995–2008)

Source: CBS, 2007, 2009. Disaggregated childcare statistics are only available from 1996 through 2004.

76

Collective childcare protection: the new workfare

formal childcare (Knijn and van Oorschot, 2008; Portegijs et al, 2006a; Portegijs et al, 2006b).Yet the financing of formal childcare has become increasingly important during the past decades. Three important developments have taken place. First, with the diversification of family structures, changing structures of employment as well as demographic and European-level pressures, there has been increased attention for childcare protection by welfare state actors and the social partners in the Netherlands. Second, throughout the 1990s and through the mid-2000s, childcare protection increased substantially through collective bargaining in the Netherlands. This form of protection was advocated by the welfare state as well as the social partners. The third and final development is related to legislative changes. By 2005, new legislation was introduced, the Childcare Act (Wet kinderopvang), which effectively condensed a previously three-tiered childcare system (municipal and employersubsidised places as well as private places) into one scheme. Parents pay childcare costs upfront, receiving fiscal compensation for one-third of the costs from the state and one-third from employers.The latter were previously based on voluntary subsidies arranged in collective labour agreements but these subsidies became legally mandated in 2007. After passage of the Childcare Act, the state argued that if the social partners could not effectuate collective bargaining coverage for 90% of all employees, the state would mandate employer subsidies. Consequently, the number of childcare arrangements continued to increase, nearly reaching the 90% target, but the issue of free-riding behaviour among employers arose, which led to the passage of new tax legislation in 2007.This required employers to subsidise childcare and effectively removed childcare from collective bargaining, and creating a semicollective form of new social risk protection in the Dutch welfare state. In sum, three theoretically and empirically interesting developments have taken place in childcare policy in the Netherlands since the early 1990s: the perception of childcare has changed and is now viewed as needing protection from the welfare state or other actors; there has been a relatively rapid and significant expansion of childcare coverage in collective bargaining throughout the 1990s continuing through 2006 and, most recently, semicollective childcare protection developed in the welfare state.

Changing perceptions of childcare In the Netherlands, childcare traditionally took place within the family, with mothers taking on the primary responsibility for the care of children. Even with the shift away from many male breadwinner policies, childcare has remained firmly anchored within the familial sphere. But with the increased complexity of modern families, changing structures of employment, the mobilisation of the feminist movement as well as demographic and European-level pressures, there has been increased attention to childcare by policy actors in the Netherlands – with a firm relationship perceived to exist between childcare and women’s labour market participation. 77

Transforming the Dutch welfare state

Esping-Andersen (1999) has argued that there is no need for the collective protection of a risk unless it is perceived to be a social risk.Yet according to policy makers interviewed here, childcare is not seen as a social risk. Despite this fact, childcare protection is still created. This is because, rather than being seen as a social risk, childcare is seen by the social partners, as well as political actors, as a barrier to primarily women’s employment, creating a dominant discourse among the social partners and the state, which affected the development of childcare policy.2 Trade unions and employer organisations, as well as the state, each had their own subjective interests with regards to childcare policy based on shared norms and interests within these organisations (Scharpf, 1997). But a basic agreement developed, or a common actor orientation, perceiving childcare to be a barrier to women’s employment. As one employers’ organisation representative explained, childcare was needed to promote employment, particularly women’s employment. ‘I think that the Netherlands is a country with relatively welldeveloped childcare, at this point. Of course a lot has happened in the last fifteen years. It’s really like a developing market.There’s a need for childcare because women work, men work, the economy demands people, there are no more ideas that women shouldn’t be working – except in some small parts of society. […] We’ve always been positive about this, always cooperated on this issue, we never said: well, we shouldn’t do that.We look at it from a business perspective and think: childcare is just like a pension or healthcare insurance.You need it so people can function [in their job, MY].’ (I36, employers’ organisation representative) This dominant actor orientation evident among the social partners is confirmed by joint social partner documents in the Labour Foundation and the Social and Economic Council (SER). In an advisory report created in 1998, entitled ‘Work, Care and Economic Independence’, the SER clearly sees childcare as an integral part of any policy on work and care, noticeably linking childcare to employment. ‘From the Council’s outlook, childcare – as part of a policy on work, care and economic independence – is first and foremost a labour market instrument. An adequate childcare arrangement in both the quantitative and qualitative sense is, consequently, an essential prerequisite for the combination of work and care’ (SER, 1998: 12).The council’s perception of childcare as a labour market instrument led them to advise the state to shift the administration of state childcare policy from the Ministry of Health, Welfare and Sport to the Ministry of Social Affairs and Employment in 2002, an issue returned to later. It must be noted, however, that although the state shifted childcare policy to the responsibility of the Ministry of Social Affairs and Employment, it did not do so from a perspective of seeing childcare as a social risk.

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Collective childcare protection: the new workfare

‘With childcare and education and the like […] well, naturally if you don’t have childcare or training, you can still eat and you still have a roof over your head. It’s of a very different sort. It’s really a luxury. That’s one way of looking at it. And the only reason the government stepped in […] is because of the relationship with the labour market.’ (I17, governmental policy maker) While childcare may be seen to be a luxury and not a necessity, by relating it to women’s labour market participation policy makers are implicitly viewing it as a social risk – the absence of childcare has a collective consequence of reducing women’s labour market participation. Whether the cause–effect hypothesis assumed here by policy makers (increased childcare leads to increased female employment) is empirically correct does not matter (Scharpf, 1997) as childcare is perceived to be a barrier to women’s employment. The state clearly oriented itself to seeing childcare as a barrier to women’s employment and, given both governmental and political goals to increase women’s labour market participation, increased financial state involvement was logical. ‘If you look at the 1990s, the most important policy goal of the government was… [...] It was increasing labour market participation. The golden conclusion was always: there are three groups where your attention should be focused on.The labour market participation of older workers, how to get people off social benefits and back into employment, and the third group was women’s labour market participation.’ (I45b, governmental policy maker) By the end of the 1990s, the Dutch labour market, which had been functioning exceptionally well in terms of job growth, productivity and low unemployment (Visser and Hemerijck, 1997) was becoming increasingly flexible, with a demand for part-time workers, roles often fulfilled by female workers in the Netherlands (SCP, 2008;Visser, 2002;Yerkes, 2009). Moreover, the labour market was exhibiting signs of mismatch between labour supply and demand. Labour shortages were arising, in particular in the healthcare and education sectors, sectors typically overrepresented by female workers.These labour market developments, together with concerns about perceived future labour market shortages due to an ageing labour force help explain the focus on childcare policy. ‘Eventually there came a time, naturally because of the huge labour market shortages – we can’t forget about that, so it was a bit of an egotistical reason from a number of political parties who thought, gee, soon we’ll be dealing with all these labour market shortages and we’re going to need all these women participating in the labour market – that won’t happen on it’s own, so we better start thinking about ways of combining work and care.’ (I28, Green Party MP) 79

Transforming the Dutch welfare state

The changing perception of childcare as a labour market instrument was strengthened as well by the European Union’s Lisbon Strategy. Signed in 1997, the Lisbon Strategy contained explicit goals for achieving increased economic growth, competitiveness and social inclusion within the EU, including a goal of increasing women’s labour market participation to 60% by 2010 (Kok, 2004; Plantenga et al, 2007).3 The development of a shared interest in childcare policy is likely driven by shifting social norms as well. There was a lack of public support for childcare policy during the 1980s and early 1990s, but changing public perceptions of childcare can place increased pressure on policy makers to effectuate improved childcare policy. According to public opinion data (SCP, 2004), only 36% of the Dutch population recommended that women with school-aged children should work outside the home in 1995 (see Table 4.1). This percentage, however, does reflect an increase of more than 20% since 1985. 46% did not consider the paid employment of mothers with school-aged children to be problematic, and 17% explicitly objected to these women working outside the home. The objection to the paid employment of women with young children was much stronger, however. In 1995, 40% of the respondents who were asked if it was problematic that mothers with young children would take part in paid employment, meaning these children would have to go to a crèche, considered this to be a problem. Therefore, by the mid-1990s and the start of the analysis, public opinion was still divided over the acceptability of employment for mothers, particularly those with young children. Childcare protection was still considered to be largely a family responsibility at this time. During the second cabinet period of the so-called ‘purple’ political coalition of Labour, Conservatives and Democrats66 from 1998 to 2002, perceptions of childcare were changing politically but public perceptions had not changed as much. In fact, public opinion had become marginally less approving of mothers of school-aged children working outside the home between 1995 and 2000.The percentage of people who considered it problematic if women with school-aged children worked outside the home increased by 1% between 1995 and 2000. In contrast, the number of people who would recommend that women with schoolaged children work outside the home decreased by 3% during this period. At the same time, social support for mothers with young children working outside the home was increasing. In comparison to 1995, 47% of respondents did not consider it problematic if mothers with young children worked outside the home, requiring the use of formal childcare (an increase of 4%). By 2004, just fewer than 31% of the respondents consider the paid employment of mothers with young children to be problematic. Public opinion data now show that a clear majority of respondents support the employment of women with either school-aged children or young children, demonstrating increased social support for the possible need or use of formal childcare. However, while public opinion may be supportive of childcare, this is a complex issue. For example, Knijn and van Oorschot (2008: 1532) find that in terms of financial support, 80

Collective childcare protection: the new workfare Table 4.1: Social support for mothers taking part in paid employment (in percentages): 1985–2004 1985 Mothers of school-aged children Mothers with young children, crèche needed 1995 Mothers of school-aged children Mothers with young children, crèche needed 2000 Mothers of school-aged children Mothers with young children, crèche needed 2004 Mothers of school-aged children Mothers with young children, crèche needed

Recommend

Not problematic

Problematic

15.7

53.6

30.6

7.3

39.1

53.6

36.3

46.3

17.4

16.8

43.3

39.9

33.0

48.5

18.5

16.7

47.4

35.8

33.1

53.0

13.9

17.0

52.3

30.7

Source: Becker, Nauta and SCP, 1985; Becker and SCP, 1995; Becker and SCP, 2000; SCP, 2004; Yerkes, 2010.

‘Dutch people put a stronger emphasis on the responsibility of parents than on that of government when it comes to child-related schemes and services’. They conclude, based on a 2005 survey carried out in the Netherlands, that public support for investments in childcare is not overwhelming and that the population remains divided on the issue. Further consideration must also be given to the relationship between support and policy. While most studies are unsure about the effect of public opinion on policy and whether policy is driven by public opinion or vice versa, Sharp (1999) finds evidence for a relationship between the two and a more recent study by Raven and colleagues (2011) suggests that, particularly in the case of new policy areas such as active labour market policies, policy is influenced by public opinion. The evidence here suggests, then, that a public support mechanism may have created endogenous pressure for governmental policy makers and politicians to become more involved in childcare policy. However, the evidence is only suggestive of this relationship and more research is needed to determine if this is a causal relationship. In sum, at the start of the analysis in 1995, it is relatively safe to say that childcare policy was slowly developing but in essence nearly non-existent in the Netherlands. This fact makes the rapid expansion of childcare policy within collective bargaining even more remarkable.What allows this initial expansion to 81

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occur is the development of a dominant discourse among policy actors, a common actor orientation mechanism, in which childcare is perceived to be a barrier to employment, in particular women’s employment. Labour market flexibilisation, perceived (future) concerns about a mismatch between labour market supply and demand, the EU’s Lisbon Strategy and changing public opinion – each of these factors contributed to childcare being perceived as a barrier to women’s employment and the creation of a common actor perspective. The development of this shared perception required a policy response and the preference went out to expanding childcare within existing institutional structures: Dutch collective bargaining.

The expansion of childcare in Dutch collective bargaining The expansion of childcare in collective bargaining is due to the common actor orientation mechanism described earlier as well as a preference for collective bargaining, explained by an institutional mechanism of increasing returns. This institutional mechanism is salient in explaining both the state’s choice for regulated self-regulation of childcare as well as the social partners’ choice to develop childcare protection within collective labour agreements. State involvement in childcare policy in the mid-1990s was primarily aimed at increasing childcare supply. Between 1990 and 2003, the state implemented so-called childcare stimuli (stimuleringsmaatregelen), meant to expand the number of childcare places through combined public and private financing.A close analysis of government documents in this period demonstrates that the state had only begun to perceive childcare as a policy area requiring more attention during the 1990s, following the recognition of a need for improved work and care combinations created under the third Christian Democratic-led cabinet from 1988 to 1992. ‘The policy of childcare expansion [from the third Lubbers cabinet, MY] will be continued. We shall consult with the social partners about an increase in the number of company childcare places’ (MinAZ, 1994). This approach led to the development of both private childcare places and employer-led childcare places alongside state subsidised childcare places. Primarily, however, the social partners were responsible for responding to the issue of childcare, which was now developing within collective bargaining. In 1995, 31% of all collective labour agreements contained childcare subsidies for all employees (see Figure 4.2).The number of collectively bargained childcare arrangements remained low until the late 1990s. In the following years, the number of available childcare subsidies expanded rapidly, growing approximately 10% each year, reaching a share of 62% by 2002. At its peak in 2005, 77% (534 of the 698 agreements concluded that year) contained financial childcare provisions for all employees. In the years after new legislation was created, childcare coverage decreased and is now being phased out of collective bargaining as a result of mandatory employer subsidies, introduced in 2007.

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Collective childcare protection: the new workfare Figure 4.2: Share of childcare provision in Dutch collective labour agreements (concluded annually, 1995–2009)

Source: Ducadam, 2009.

The expansion of childcare in collective bargaining is driven by the common actor orientation mechanism, or shared interest of employers and trade unions, to create childcare and improve (women’s) labour market participation. As one trade union representative explains, ‘When I had just started working at the industrial union in 1990, none of the larger sectors, except the graphics sector, had one [a childcare arrangement in collective bargaining, MY].And I remember, [colleague’s name, MY] was a policy advisor at [company name] and she came up with this idea:“We’ll levy a percentage of earnings, put that in a fund and the fund pays out.That was the breakthrough in childcare.” […] Then we started working with sector levies. In 1992, when [colleague’s name] was working on the collective labour agreement in the Metal and Technics sector. The men working there thought, “Aw, God, she wants 0.01 [levied on earnings, MY] or something.” So MetalElectric had a childcare arrangement using a sector levy but only women working in that sector could use it. Not men.That didn’t change until 1995 or 1996. I’m not sure, but it happened during the time that I had just become administrator of the industrial union.That’s how childcare places were created in the Netherlands and that sector 83

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[childcare, MY] started to grow, as a result of those sector levies.’ (I39, trade union representative) While trade unions enthusiastically worked to create childcare subsidies through collective bargaining, employers were not always receptive to these ideas in the beginning. A dominant perception among employers was, ‘Who has to pay for it, huh? And in those days, our reasoning in the 1980s was: well, the women should pay for it themselves, fiscally supported by the government.We’re not going to pay for all of that, as employers; what do we have to do with it?’ (I6, employers’ organisation representative) The attitude of employers changed as women’s labour market participation continued to increase throughout the 1990s. ‘But OK, back then during the 1990s, it became more serious, childcare was really becoming an issue and that’s when financing became an issue because the government is always shouting about all kinds of stuff but when it comes down to paying for it, they always look to us. That’s always great. But anyway, of course we really started to see that good childcare was in our own best interest.’ (I6, employers’ organisation representative) Annual labour conditions memoranda from peak trade union organisation FNV demonstrate that one of the main concerns during this period was the increase of company childcare places. As the agenda for upcoming collective bargaining rounds in 1997 shows, the FNV was focused on childcare as a means of achieving labour participation goals.‘These include:Agreements on (company) childcare, also during inconvenient [working] hours. Childcare arrangements must be available for both men and women’ (FNV, 1998: emphasis in the original). Employers’ organisation VNO-NCW, while having been consistently aware of childcare policy developments, clearly felt at the time that childcare was a means to assist only female employees, and they were not as quick as FNV to recommend an expansion of childcare places (VNO-NCW, 1995, 1996). In 1995 and 1996, childcare was discussed in VNO-NCW documents as an advantage to the promotion of part-time work, assisting in the combination of work and care. By 1997, childcare gained some attention within VNO-NCW memoranda. There is explicit mention of trade union recommendations and joint discussions in the Labour Foundation on the issue, and by 1998,VNO-NCW states,‘the realisation of good quality and affordable childcare is important’ (VNO-NCW, 1998). As one employers’ organisation representative explained, it was obvious employers should become involved in childcare once women’s labour market participation started increasing. 84

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‘So what you’re saying is that the change in employers’ thinking was mostly due to the fact that an increasing number of women were taking part in employment.’ [MY] ‘Yes, of course, that’s how it always works. When there weren’t any ethnic minorities working yet, we didn’t discuss it, but at some point there are ethnic minorities and it becomes a question. Now we want older workers to continue working longer, so you start to think about that. It’s always a question of when some issue arises – there’s nothing odd about that, you just need to come up with solutions and before that, it’s all just hypothetical.’ (I6, employers’ organisation representative) Both employers and trade union representatives maintain that after this initial period of difficulties during the 1980s and early-to-mid-1990s, childcare was not a thorny subject. In fact, in comparison to many other subjects on the negotiating table, childcare was relatively easy to agree upon, leading to a continued expansion of childcare arrangements in collective labour agreements as outlined in Figure 4.2. Childcare was, in that manner, a success story for both sides. ‘Childcare was something of a success story and indeed, as FNV we could say to young parents: see, these are the negotiations and this is what we managed to get for young parents. Because the employer contributes to childcare, and on the other hand, employers had the same thing really: employment conditions, this is a way I can distinguish myself and look, I’m a good employer in terms of work and care.’ (I1, trade union representative) The common actor perspective evident among the social partners and driving an expansion of childcare in collective bargaining is also demonstrated by joint recommendations made in the Labour Foundation in 1997 and later in 1999 (StAr, 1997, 1999). Explicit joint recommendations on childcare did not appear until 1999. In 1997, the Labour Foundation created a number of recommendations on childcare, but only as a part of recommendations on the broader topic of the combination of work and care. The childcare recommendations within this context focus on supporting the expansion of company places for childcare and an increase of childcare provision in collective labour agreements. The Labour Foundation argued it was not problematic if a rearrangement of secondary labour benefits were necessary to fulfil the recommendation, as long as it did not impede responsible wage developments (StAr, 1997).Two years later, in October of 1999, the Labour Foundation recommended that an expansion of the existing childcare supply was necessary to facilitate improved labour market participation among young parents (StAr, 1999). During this time, the social partners desired more financial state involvement. In particular, the social partners were now focused on getting the state more 85

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uniformly involved in childcare by promoting a tripartite system of childcare financing. ‘The trick the social partners were trying to realise was: how do I get the government to the point that I can involve them, because even though it’s an employer-employee responsibility – maybe; in any case, if there’s nothing else then you have to do it together. But society, and the government is the owner of that, it’s in society’s interest.’ (I12, trade union director) This question of public financing for childcare is a fundamental question in risk protection. As one interviewee explained, ‘And then came the very classical, very basic question: who’s going to pay? And eventually comes the question, whose financial responsibility is it? Parents? The employee? The employer? The government? Whereby, if the government is involved, the question is: Is there a public interest at hand that legitimises a financial arrangement based on general funds?’ (I4, representative in consultative organisation) 1 January 2005 marked the start of the Childcare Act (Wet kinderopvang), which effectively condensed the previously three-tiered childcare system (municipal and employer-subsidised places as well as private places) into one scheme. Parents pay childcare costs upfront, receiving fiscal compensation for one-third of the costs from the state and one-third from employers, based on voluntary subsidies arranged in collective labour agreements.The development of the Childcare Act is a direct consequence of the common discourse among the social partners as well as state policy makers that there should be a shared financial responsibility for childcare given the perceived relationship with employment. Alongside this common actor orientation mechanism, the social partners were given an extra incentive to continue creating childcare protection in collective bargaining. If the social partners could not effectuate childcare coverage for 90% of all employees, the state would mandate employer subsidies. But while the number of childcare arrangements increased exponentially in collective labour agreements, the issue of free-riding behaviour among employers arose. ‘Because both parents, at any given point, could be eligible for the [collectively agreed upon subsidy, MY]… and oftentimes, in reality it was apparent that one employer, and often the father’s employer, said: “Yeah, I’m not paying that.” So women who were working, they got the costs covered by their employer but the intent was that men would get reimbursed as well and that generally didn’t happen. So that created a lot of problems.’ (I20, former representative in consultative organisation) 86

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This free-riding behaviour led to the passage of new tax legislation in 2007, requiring employers to subsidise childcare and effectively removing childcare from collective bargaining.This shift to state involvement, and the failure of selfregulation that triggers state involvement, is discussed later. But initially, childcare evolved in collective bargaining as compensation for a lack of state policy (Plantenga, 2002; Yerkes and Tijdens, 2010). To understand the preference for collective bargaining, we need to account for the importance of strong, corporatist institutions. A mechanism of increasing returns is evident, in which positive feedback effects in other areas of secondary labour market conditions, such as pensions and disability policy, made collective bargaining the natural choice for the social partners when looking to resolve the issue of childcare. Historically the state provided little childcare protection due to the focus on having childcare take place by mothers within the home.The alternative was to organise childcare protection in companies or in collective agreements. Throughout the 1980s and into the 1990s, trade union representatives fought for childcare protection to be included in collective bargaining agreements. ‘As I said before, [colleague’s name, MY], one of the pioneers in this area who said: “If the government won’t arrange it than we’ll have to arrange it ourselves.” So we arranged a crèche by ING and KLM and from there we tried to say: listen, if its possible by ING and KLM, why isn’t it possible by the Bijenkorf and the Albert Heijn?’ [a department store and grocery store chain, respectively; MY] (I18, trade union official) Although alternative options were possible and even evident during the early stages of childcare policy, with a small number of large firms such as ING and KLM having in-company childcare, this was not the norm. As one trade union representative explains, ‘Even in [colleague’s name, MY]’s time, we were fighting everywhere for childcare. Back then we were booed out sometimes. Except for large companies like KLM and Martinair, they had something in place, but a lot of companies thought: “What kind of nonsense is this? They [employees, MY] have to take care of it themselves, that’s a private matter.”’ (I39, trade union representative) Initial childcare coverage was split between in-company childcare and childcare subsidies in collective bargaining. Quite quickly, the preference for arranging employee benefits in collective bargaining dominated, and in-company childcare was abandoned (interview fragment I39, 2009). It was necessary in the eyes of trade unions to create childcare subsidies in collective labour agreements given the relatively high costs of childcare.

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The Dutch approach to childcare policy was clearly influenced by the presence of strong industrial relations institutions and a pattern of self-regulation through collective bargaining. Self-regulation by the social partners was a dominant mode of governance; having worked in the past it was relatively simple to apply to childcare policy. In other words, self-regulation showed significant increasing returns (Pierson, 2000). As expectations in regards to women’s employment developed, and a lack of childcare was perceived to be a barrier to labour market participation, it seemed preferable to provide childcare subsidies within the realm of collective bargaining. By the late 1990s, childcare was increasingly becoming a shared policy domain between the state and the social partners, and while the social partners did not object to financial involvement from the state they wanted to maintain the right to develop childcare through collective bargaining. ‘What we were afraid of was that if the state were to do it […] that you would end up with a state crèche, you know, that would cost an infinite amount of money. Huh, of course in the end we would all end up paying for that through taxes, and employers would have to pay that way. […] We weren’t in favour of that so out of other considerations we said, well, let’s go ahead and help pay for it, tripartite, and then we’re involved a little bit and it won’t become some gigantic arrangement, and well, that’s how the system started to develop I guess.’ (I6 employers’ organisation representative) In essence, collective bargaining was adequate for addressing the childcare risk but as the link between childcare and labour market participation became more explicit, and the social partners felt the state should take responsibility for at least part, if not all, of childcare costs, extensive discussions on the division of responsibility began to take place, as this quote from a trade union representative demonstrates. ‘We had a number of discussions here regarding work and care. To what extent should the government create regulations or should you leave this to the social partners. At first it was the social partners but then the government came with a number of legislative regulations, for example regarding women’s position in the labour market, whether or not someone is eligible for social assistance, mandatory job seeking requirements. But OK, think of a number of issues around that. And then you say: government – if you’re going to make demands then you need to be involved in a number of other things and that’s how we came to the issue of childcare. At first, childcare was, from our perspective, an issue for the social partners and others involved. Along the way we said, “Government, you have a responsibility there too – because you say to people: you have an obligation to be employed,

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een werkplicht.” But you have to take care of some things first before people can fulfil their duty.’ (I46b, former trade union representative) Summing up, the presence of positive feedback effects on regulated self-regulation via the social partners shaped a preference for allowing the social partners to expand childcare through collective labour agreements. Supported by a shared perception of childcare as a barrier to female employment, trade unions and employers were able to expand childcare significantly in collective agreements – in Scharpf ’s (1997) terms, there was a common actor orientation. This mechanism explains how this relatively new policy area developed so quickly. But as childcare policy developed, the state increasingly involved itself in discussions of welfare responsibility, pulling more and more responsibility to the welfare state and eventually creating semicollective childcare protection.

The semicollective protection of childcare in the Netherlands With the passage of the Childcare Act in 2005 and the new tax legislation in 2007, the state developed semicollective childcare protection, providing citizens with a new form of welfare. Prior to these legislative changes, state financial involvement in childcare policy was fragmented and much of financial responsibility for childcare was in the hands of the social partners. So why did the Dutch government take on increased responsibility for childcare policy? And why did the social partners accept this shift in protection from collective bargaining to the welfare state? The state’s perception of childcare as a barrier to female employment is once again integral to understanding the development of childcare policy. Political cleavages do affect this process, however, demonstrating that a modified ‘old’ politics mechanism (Pierson, 1996) is also involved, in which political cleavages can be found along the traditional political spectrum – social democrats (Labour) supporting an expansion of the welfare state, secular-right parties supporting individual, market-driven policies and Christian democrats focused on the traditional male breadwinner. But the shift of childcare policy from collective bargaining to the welfare state is also attributable to the failure of self-regulation in childcare policy, showing that a corporatist mechanism is at play, with a politically strong government demonstrating its inherent right to take back its regulatory capacity from collectively organised actors.Together, these three social mechanisms: an actor orientation mechanism, an ‘old’ politics mechanism and a corporatist mechanism are what explain how childcare policy becomes an example of ‘new’ social risk protection in the Dutch welfare state. The first, an actor orientation mechanism, explains how the perception of childcare as a barrier to women’s labour market participation shaped the development of government policy. As noted earlier, in 1995, political and governmental involvement in childcare was minimal, which resulted in a fragmented approach to childcare. For example, until 2002, childcare policy fell under the domain of the Ministry of Health,Welfare and Sport.The exception to 89

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this was childcare arrangements that were considered to be related to policy areas that fell under the auspices of the Ministry of Social Affairs and Employment, such as social assistance. Childcare policy was divided among the ministries, and separate policies were created, for example, for lone mothers on social assistance. Yet in the late 1990s, two events occurred, which are integral to our understanding of the changing perception and management of childcare in the Dutch welfare state influencing the course of childcare policy. First, a report from the Ministry of Economic Affairs entitled ‘Marketisation, Deregulation and Legislative Qualities’ (Marktwerking, Deregulering en Wetgevingskwaliteiten; MDW), was released in the spring of 1998, just prior to national elections. The MDW project, carried out during the ‘purple’ political coalitions of social democrats (Labour) and conservatives between 1994 and 2002, marked a trend towards increased marketisation in various policy fields, including childcare. ‘And it was a move towards increased marketisation because in the past, we had municipal childcare establishments and private childcare establishments. […] So the idea was: we’ll make a whole new system, all at once, which will create more marketisation, more choice and where possible, a system which will better meet the needs and wishes of parents and employers, insofar as they’re involved.’ (I17, governmental policy maker) Earlier attempts at creating more market-driven childcare were not successful. One governmental policy maker who was working at the Ministry of Social Affairs and Employment at the time, who later became involved with childcare policy at the Ministry of Health, Welfare and Sport4, explained that during the mid1990s, a move towards market-driven childcare was discussed but not accepted. ‘Then came the story:VWS [Ministry of Health,Welfare and Support, MY] is going to make a law, a new childcare law, and they don’t want it to be in the hands of the municipalities anymore, but they want… even the temporary subsidy we were creating [for lone parents, MY] was going to be set up so that parents would directly receive the subsidy. Demand financing. That was one step too far at that point in time. Subsidised childcare policy originated at the municipal level, municipalities gave the money to childcare centres and to change that or switch to giving money to parents – that was appealing, but didn’t work at that point.’ (I45a, former governmental policy maker) Legislation to achieve market-driven childcare was not developed until the second cabinet of Prime Minister Wim Kok during the late 1990s, although the legislation was not implemented until 2005. To develop this legislation, the state requested an advisory report from the SER. Part of a larger advisory report on work and

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care, the report confirmed the desire for a move towards more market-driven childcare (SER, 1998). ‘I think that one of the most important starting points was in 1998 – there was a SER report on Work, Care and Economic Independence, and that’s where the whole fiscal idea came that the government needs to invest more money in it through the demand side.’ (I8, former trade union representative) The SER report also confirms that the social partners and crown members of the SER, politically appointed independent advisors, agreed to managing childcare within the existing institutional structure of the Dutch welfare state: ‘Eventually they [the SER, MY] ended up with a deal, a generous deal that was worded in the most abstract of terms and not given a concrete interpretation but one that still determines childcare policy, even today: one-third, one-third, one-third. And in that sense, the report was very effective. It created a breakthrough, even though it didn’t get much media attention back then. But the idea was such that the parents, that is, employees, the employer and the government would each be responsible for one-third of formal childcare costs.’ (I4, representative in consultative organisation) Following the SER’s advisory report, policy makers worked to create new legislation to realise increased marketisation that should, in their eyes, stimulate childcare demand and lead to an increase in childcare supply. Discussions took place involving politicians from the Labour Party and Ministerial policy makers, as well as employers’ organisations and trade unions. As one governmental policy maker explains, ‘We made a memorandum outlining the basic ideas [underlining the proposed legislation, MY]. It took us three-fourths of a year to account for all the various perspectives and all the loose ends that needed to be researched at a later point. One part of the legislation that existed in an earlier version was a mandatory employers’ subsidy.There was a meeting between [Labour Party MP, MY], the unions and the umbrella organisations and it wasn’t accepted. Employers wouldn’t accept it.’ (I45a, former governmental policy maker) While the cabinet agreed to the outline of a new childcare law in 2001, parliament had yet to pass the legislation into law. It would take a second development, a shift in Ministerial focus, alongside the report from Economic Affairs, before market-driven, demand-driven childcare was realised. Following the elections in 2002, childcare was moved from the Ministry of Health, Welfare and Sport 91

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to the Ministry of Social Affairs and Employment. “This dossier needed an enormous impulse – to improve labour market participation – and that’s why it went from VWS [Health, Welfare and Sport, MY] to SZW [Social Affairs and Employment, MY],” (I45, Governmental policy maker). The new centre-right cabinet’s decision to move childcare from the Ministry of Health, Welfare and Sport to the Ministry of Social Affairs and Employment is indicative of two things. First of all, it demonstrates that the state was making a clear link between childcare and employment, rather than seeing childcare as part of health and welfare. Secondly, this shift in ministerial responsibility denotes a continued role for the social partners in creating and regulating childcare policy. ‘I remember when I took over the childcare dossier from [name of colleague, MY] that he literally said to me:“I brought this whole thing over [childcare, MY] from VWS, take a look at it. The reason why it’s here, is the social partners.” At that point in time, some very initial discussions were taking place regarding a mandatory employers’ subsidy and in a conversation about my transition into the job he said to me: “If you administer a mandatory employers’ subsidy, then the question is what you’re even doing [with this issue, MY] at SZW.” And that’s true. And that was felt politically as well.’ (I45b, governmental policy maker) By bringing childcare under the auspices of the Ministry of Social Affairs and Employment, the state could maintain an open dialogue with the social partners on this topic. Childcare could now be discussed within the Regiegroep, a now formalised informal setting for Ministerial policy makers, employers’ organisations and trade union officials to discuss current and long-term policy strategies. Moreover, the shift of childcare to a different ministry is indicative of the choice of how to manage the childcare risk at that time, through regulated self-regulation vis-à-vis the social partners. The Ministry of Social Affairs and Employment monitors all developments in collective labour agreements and regulates selfregulated areas managed by the social partners – moving the childcare dossier to this Ministry signals the state’s intent to maintain this institutional approach to managing childcare, as explained by the interview fragment noted earlier. Alongside this actor-based explanation of a shared interest among political, social and economic actors, it is apparent that the development of childcare policy is explained by an ‘old’ politics mechanism, discussed in the first two chapters (Hicks and Misra, 1993; Huber et al, 1993; 2000). With this mechanism, and dependent upon the ruling majority within the coalition government, it was expected that a Christian democratic majority would focus on the collective protection of old social risks via large transfer payments to male breadwinners. Social democratic parties, in contrast, were likely to focus on public sector solutions to the childcare risk. Lastly, secular-right parties were expected to focus on individual, marketdriven solutions. The empirical evidence outlined in this chapter shows support for a nuanced old politics argument. Childcare policy was distinctly shaped during 92

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the two ‘purple’ coalitions from 1994 to 2002; the ideals of the Labour Party and Conservative Party are both evident in childcare policy. On the one hand, as the old politics mechanism suggests, the Labour Party attempted to improve childcare to increase equality for all citizens, whereas the Conservatives were more concerned with creating market-driven childcare.As one government interviewee explained, ‘Well, this really is something from the ‘purple’ cabinet, you know. […] At that time they said: “We’ll just make a whole new system, so that you have greater marketisation, much more freedom and you can cater to the wishes of parents and employers, for as much as they are involved.” That was the philosophy behind it and that was simply implemented.’ (I17, governmental policy maker) Most interviewees expressed that these two political perspectives, greater equality in childcare policy (Labour Party) and market-driven childcare (Conservative Party), were essential to the formation of contemporary childcare policy in the Netherlands. In other words, an ‘old’ politics mechanism is still relevant today (Kittel and Obinger, 2003), at least in the management of new social risks. Contrary to theoretical expectations, however, a Labour Party-ruled coalition did not lead to fully financed, public sector delivery of childcare in the Netherlands. Rather, the influence of the Conservatives’ market-driven ideology combined with goals of equality from the Labour Party to create a demand-driven form of childcare. ‘That was the compromise of the “purple” coalition: the “purple” coalition, that meant marketisation, that was the Conservative’s toy; and something social, childcare, that was the Labour Party’s toy. All those lines came together at the same time and that produced… particularly if you look at surrounding countries – all these other countries had it [childcare, MY]. In those days, something big needed to happen.’ (I45b governmental policy maker) The fact that the Conservative Party agreed to semicollective childcare, albeit in a market-driven form, is due to the perceived relationship between childcare and employment. ‘That’s a great conservative, well, dilemma is not quite the right word, but an assessment, that of course we want to make it possible for everyone to work. If we do that with social benefits then you also have to do that with childcare. […] How far do you become involved in that and to what extent do you need government to do it? But in general, ensuring that people can work is a neoliberal conservative interest and there’s also a financial interest.’ (I29, Conservative Party MP)

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Interestingly enough, while much of what is now contemporary childcare legislation was shaped during the second ‘purple’ cabinet, it was not implemented until a Christian Democratic-led coalition ruled Parliament from 2002 onwards. The inclusion of semicollective childcare legislation would at first glance seem to go against an ‘old’ politics argument. Yet the shape given to childcare policy in the Netherlands is also distinctly formed by a more conservative approach to care, in line with its historical male breadwinner tradition. ‘You have children for a reason and the idea is that you… I mean if you work part-time in relationship to caring for children, because if you don’t have kids it’s fine that women work five days [a week, MY], then of course, that’s not an issue. But if you have care responsibilities for children then we think, it’s also in our election campaign: that both parents are responsible for the care of their children and then the most ideal model would be that both parents work four days. The child can go to formal childcare three days a week, and the rest can be arranged with one day of care for the child at home by each parent.’ (I23, CDA MP) A member of parliament from the Green Party, in the opposition, explained how they perceived political values of childcare in the Netherlands: ‘The VVD [Conservative Party, MY] is always doing a great job when it comes to childcare. Strangely enough, we always do well together with the Conservatives when it comes down to issues like emancipation, economic independence, childcare, work and care combinations.There’s always a discussion of who’s going to pay for it, but that probably doesn’t surprise you. But the idea, we share a similar idea – but it’s not easy to take these more radical steps [to get rid of a certain tax subsidy, MY], to find a parliamentary majority for that in the Netherlands because there is still a quite strong conservative opposition, I would say.’ (I28, Green Party MP) Conservative views of childcare not only stem from Christian parties on the right, but from parties on the left as well. ‘Childcare is a condition for being able to participate [in the labour market, MY] but we always try and put the interest of the child first and we don’t say: for the sake of improving labour market participation, so many children need to go to childcare. No – that differs per situation, per family, even per child.We also think that you should still have the opportunity to choose to, in any case, be home temporarily for a little while when you have young children. That is not taboo in our party.’ (I30b, Socialist Party MP) 94

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These views on childcare demonstrate that although childcare policy was shaped by the perceived link with labour market participation, politicians are still struggling with the content of contemporary childcare policy because of differing political views of women, care and the choice to perform paid work, care or some combination of both. ‘The election campaign [from 2006, MY] states:“Little time is left for parents to raise children on their own and to enjoy being with them because parents have to work to pay the bills.” […] Maybe you could tell me some more about this?’ [MY] ‘What we state is that we think parents should have the freedom to choose in this regard. They can choose if they want to raise their children themselves or that they want to bring them to the crèche or whichever option.What we’ve noticed recently, is that a lot of emphasis is being placed on working outside the home and that money is going towards that, while we believe that there is also an added social value if people stay at home to care for their children, et cetera.’ (I42, ChristianUnion MP) While policy makers often refer to care in gender-neutral terms, the reality of childcare in the Netherlands is far from gender neutral, with mothers continuing to take on the majority of care responsibilities (Knijn and Kremer, 1997). The final piece of legislation passed in 2007, guaranteeing a mandatory employers’ subsidy and subsidising informal care represents a combination of conservative political values but also political values focused on individual rights and equality. ‘The cabinet came to Parliament with the idea: there doesn’t need to be a mandatory employers’ subsidy, this is something for the social partners to take care of. A typical CDA [Christian Democratic Party, MY] outlook. At the same time, the Parliament, in particular D66 and those kinds of parties that argue on behalf of individual citizens’ rights said, yeah, but how does each citizen know that he or she can really receive this subsidy?’ (I45b governmental policy maker) The influence of party politics on the perceived relationship between childcare and women’s labour market participation is clear.The social democratic party (Labour) prefers public funding of childcare. On the other hand, Christian democrats are in favour of some public funding as long as informal care is included and the secular right also favours some public funding, but only in combination with marketdriven demand and supply.These results are expected under a mechanism of ‘old’ politics, particularly once gender is accounted for.A study by Huber and Stephens (2000), which looks at the effect of gender in relation to public spending and public delivery of welfare services, confirms that a Christian democratic majority 95

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is likely to lead to public funding of welfare services but not public delivery of services (that is, childcare expansion through the public sector). However, the results presented here also nuance the quantitative results presented by Huber and Stephens. In researching the effect of female labour market participation and social democratic incumbency, the authors find that: The interactive effect on public delivery of social services suggests that the interests of working women in the expansion of public welfare state services parallel the interests of social democratic parties, and that the alliance between working women and social democratic incumbents is particularly effective in translating these interests into policy. (Huber and Stephens, 2000: 335, emphasis added, MY) The presence of social democratic (Labour) incumbency in the Dutch case was helpful in bringing about state involvement in the public funding of childcare but did not result in the public delivery of childcare services. Party politics play a key role in explaining the management of childcare policy in the Netherlands. But the importance of political coalitions in Dutch politics means combinations of political views are evident, rather than clear-cut partisan views in policy outcomes, as suggested by the literature. Clearly, party politics and a common actor perspective help explain the state’s initial approach to childcare policy. But they cannot explain what triggered the final step in collectivising childcare within the welfare state, removing childcare from collective bargaining. Institutionally, self-regulation had been the chosen method for dealing with childcare – self-regulation created increasing returns. But when the self-regulation of childcare failed, a corporatist mechanism, whereby the Dutch government reassumed its regulatory capacity, came into play. During the debates on impending childcare legislation in 1999 and 2000, the state agreed to refrain from seeking a mandatory employers’ subsidy; in exchange, the state created a target of 90% coverage in collective labour agreements. The cabinet trusts the efforts by the social partners to increase the number of concrete childcare agreements in collective labour agreements and company agreements in accordance with recommendations from the Labour Foundation in 1999. […] As a point of orientation, the cabinet strives to have concrete childcare agreements in 90% of collective labour agreements and company agreements in the long term. (Tweede Kamer der Staten Generaal, 2000) In interviews with the social partners and the state on this subject, most believed this 90% target was created by the social partners within the Labour Foundation, in either the 1999 or 2004 childcare recommendations. However, neither set of recommendations mentions an explicit target of 90%. Rather, recommendations focus on a general increase in childcare arrangements in collective agreements – 96

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no explicit target is mentioned (Labour Foundation, 1999, 2004). Independent of the origin of this target, the state confronted the social partners in 2006 with statistics that showed this target was not being met (Tweede Kamer der Staten Generaal, 2006). ‘In that sense, we confronted them with their own plan and we said: the recommendation that you’ve formulated, for yourself as social partners… if you can implement that, then it’s OK. It was balancing on the edge…[…] The idea, and that’s how we discussed it with Balkenende [the Prime Minister, MY] at the beginning, was that the whole domain of social security, wherever the social partners were financially involved – has to collect premiums – it’s important that they get the space to implement that and also to co-determine the content of it [the particular policy issue, MY].’ (I38, former cabinet member) The target of 90% coverage of childcare in collective labour agreements became a sword of Damocles – if this could not be reached, childcare protection would shift from collective bargaining to legislation. Despite the strong development of childcare policy in collective bargaining, eventually self-regulation via the social partners failed. ‘I was there for the discussions in 2002 about the voluntary employers’ subsidy. At that point it was pretty much: zo de waard is, zo vertrouwt hij zijn gasten.5 The employers’ subsidy was going to be there, but there were few clauses [childcare arrangements in collective agreements, MY] and eventually you saw a number of retreating developments.’ ‘Such as?’ [MY] ‘Such as: some employers didn’t pay, or trying to put a maximum on it [the childcare subsidy, MY], different ways of getting out of it. On this issue, the idea of self-regulation failed I guess, and looking back you think despite the fact that you’re a champion of self-regulation… maybe we made a mistake here, with each other [the social partners, MY] and we should have let it go to legislation right away.’ (I46b, former trade union representative) The increasingly perceived demand for growing employment (in both hours and volume), combined with the inability to provide childcare protection for all employees in collective agreements, led to state intervention when the Dutch government made good on its threat, passing legislation in 2007.6 The reason why the government has chosen to formally arrange the employer subsidy of childcare in legislation is because the current 97

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collective labour negotiations climate and the development thereof, is such that it is not realistic to expect that 90% of employees will have access to a full contribution from the employer by 2008. (MinFin, 2007) This development can be seen as a ‘shadow of hierarchy’ (Scharpf, 1997), where the state takes back shared regulatory capacity from the social partners. In contrast to the theoretical expectations in Chapter Two, however, that a shadow of hierarchy would occur as a response to an immobile form of corporatism, with a lack of cooperation between social partners and the state (Hemerijck, 1996), the shadow of hierarchy occurred despite evidence of cooperation between the social partners and the state. State intervention after the failure of self-regulation has occurred in other policy fields in the Netherlands as well, such as smoking regulations (Weyers, 2010).7 Despite expected advantages to self-regulation, such as increased flexibility and effectiveness, state legislation proved to be more effective at regulating smoking bans than self-regulation within the sector. In fact, the failed regulation of childcare policy followed by state intervention is exemplary of a broader government trend towards self-regulation in combination with the use of performance norms (Mackor, 2010), which is often demanded from organisations that serve a public interest. By relating childcare to labour market participation, the social partners were indirectly serving the public interest by providing childcare subsidies to employees. After failing to meet the 90% coverage rate demanded by the state (a rather explicit performance norm, which differs from more implicit duty of care norms often imposed by the state), the state intervened as a matter of public interest. State intervention in childcare policy is related to two things. First, what led up to this shift was the presence of a free-rider problem – even though an increasing number of employers offered childcare subsidies through collective bargaining, employer subsidies were not universal, undermining the tripartite financing of childcare and increasing labour market insecurity and immobility. Second, the answer lies in an institutional understanding of corporatism. Childcare was a relatively new policy area, with care previously taking place by mothers within the home, in a society favouring informal rather than formal care options. Choosing to develop childcare along the trusted route of self-regulation via the social partners was a more obvious choice – a matter of path-dependent, increasing returns (Pierson, 2000).Why the state then decided in 2006 to enforce the performance norm of 90% in a very strict sense is a more difficult question to answer. When this topic was discussed in the interviews, the answer given was that the state was concerned about childcare in relation to women’s labour market participation and concerned about equal access to childcare. Although the state had been concerned about childcare in relation to women’s labour market participation before 2006, increased concern about labour market mobility, the free-rider problem and EU benchmarking made childcare a more prominent issue. Moreover, at this point in time, participation was increasingly becoming a 98

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dominant theme in political discourse. The newly appointed CDA/CU/PvdA cabinet created a commission to investigate possible means of improving labour market participation, the Bakker Commission. The Commission reiterated the need for improved childcare to increase women’s labour market participation (Commissie Arbeidsparticipatie, 2006). In addition, the Bakker Commission and its installation reflects the intention of the centre-left cabinet to focus on activation and improving labour market participation. In conclusion, then, although initial state policy was driven by a shared interest in facilitating childcare to improve women’s employment, shaped by social democratic (Labour) and conservative political views to improve childcare but in a market-driven fashion (Knijn, 2004), the failure of self-regulation thus resulted in state intervention and the development of semicollective protection for childcare.

Conclusions This chapter examined whether childcare was perceived to be a collective social risk or an individual social risk, how that risk was managed and why. Childcare was originally perceived to be an individual (family) risk, leading to an absence of risk protection within the welfare state. Rather, protection was created through collective agreements arranged by the social partners.This approach to childcare in the Dutch welfare state has changed, however. Given the perceived relationship with labour market participation, childcare developed into a collective action problem, thus becoming an issue of public interest. This perception developed due to the continued flexibilisation of the labour market, perceived future labour market shortages and pressure to meet the labour market participation goals outlined in the EU’s Lisbon Strategy (Plantenga et al, 2007). In particular, the continued flexibilisation of the labour market has meant a steady demand for part-time workers, a role most often fulfilled by women in the Netherlands (Visser, 2002). At the same time, political actors are concerned about the effect of changing demographic patterns on future labour market supply. Supported by the desire to meet the EU’s 2010 goal of 60% female labour market participation, policy makers, politicians and the social partners perceived childcare to be a barrier to women’s employment, eventually leading to semicollective protection. The explanation for this development is in part due to a shared perception among all actors involved – meaning a common actor orientation was evident. Initially, the solution to improving childcare was dealt with through collective bargaining, shaped by path dependency. Regulated self-regulation via the social partners was the preferred solution for this relatively new policy area. With a common perception that childcare formed a barrier to women’s employment, trade unions and employers increasingly were able to agree upon childcare arrangements within collective bargaining. However, the desire to increase women’s labour market participation led to a greater focus on childcare as a public interest, classifying it as a collective action and redistribution problem, emphasising the need for state intervention when self-regulation by the social partners failed.The 99

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result has been the development of a semicollective protection of childcare, an expansion of welfare for a ‘new’ social risk, in the Dutch welfare state. This final phase in protection is explained in part by the failure of self-regulation as well as the common perspective among policy makers and politicians that childcare is a panacea to improving women’s employment. In contrast to the previous chapter, party politics have played an important role in the development of childcare policy, with social democrats (Labour) attempting to achieve greater equality through childcare provision and the Conservatives pushing for an increase in market-driven childcare.As some of the interview fragments demonstrate, these political views continue to shape the debate on the future of childcare policy in the Netherlands as well.True to explanations put forth by Huber and colleagues (1993), that social democratic parties, as champions of the welfare state, can be expected to work together with trade unions to create public provision, the Dutch Labour Party and the largest of the three trade union confederations, FNV, are hoping to arrange universal childcare provision in the long term. ‘It’s not only that you’re saying that parents who are actively employed should have childcare but that it also often helps if your child goes to childcare… for certain groups… to make that transition to the labour market easier. So, women can educate themselves or start to orient themselves towards the labour market because their children are in childcare a number of days anyway.’ (I1, trade union representative) The Christian Democratic Party does not share this view, but rather, in line with old politics reasoning, favours income transfers.The varying political views on the subject can lead to conflict among the political parties, and means that the parties involved in the coalition have more influence in shaping policy than parties in the opposition. “It’s all so politically sensitive, the childcare dossier. It’s really not possible to talk to the coalition parties at all about it” (I30b, Socialist Party MP). Whether childcare policy in the long-term will develop along these political lines remains an empirical question. Other theoretical explanations outlined in Chapter Two, such as a sequencing mechanism at the level of institutions or power distributions among industrial relations actors, are not relevant in explaining the perception and management of childcare policy. Sequencing, which refers to the ability of welfare states to respond to new social risks due to the timing of post-industrialisation, is less salient in explaining either the state’s response to childcare or the response by the social partners, as the Dutch welfare state has been able to create protection for a ‘new’ social risk. In addition, childcare was seen to be a win–win situation for the social partners, meaning underlying power differences between employers and trade unions were often insignificant. It should also be mentioned that a mechanism of new politics, or blame avoidance, salient in explaining developments in sickness and disability protection, cannot explain childcare development. The relative newness of childcare policy has led to an expansion of childcare funding and 100

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coverage, rather than a decline. However, given current political debates on the subject, blame avoidance is likely to play a larger role in future policy processes, particularly as pressure mounts to shift from traditional welfare policies to policies that emphasise the importance of increased employment, including pressures from the EU, while childcare costs continue to rise. At the start of 2011, the first efforts to curb government spending on childcare and address the expected deficit of 230 million Euros was realised through a 5% increase in the share of costs paid by parents.The government plans to cut a further 310 million Euros in childcare costs in 2012 (Rijksoverheid, 2011). This chapter brings us one step closer to answering the question posed at the start of this research in terms of which risks are perceived to be collective social risks and which risks are perceived to be individual social risks, and whether this varies across risk forms. Although both disability, an ‘old’ social risk, and childcare, a ‘new’ social risk, are perceived to be (partially) collective social risks, these perceptions are dynamic and have led comparatively to a variation in risk management. Shifting perceptions of sickness and disability have led to a decollectivisation in public welfare but a recollectivisation (increase in collective protection) in occupational welfare, whereas shifting perceptions of childcare have led contrastingly to a collectivisation in public welfare, effectively removing childcare from occupational welfare.While disability policy is primarily explained through interactive mechanisms, such as corporatism and the politics of blame avoidance, childcare is primarily explained by actor-level and institutional-level mechanisms, including a common actor orientation and path-dependent increasing returns. Both cases advocate the use of an actor-centred institutionalist framework for unravelling the complex interests of the actors involved in welfare provision within the Dutch institutional context. In particular, this type of framework has shown how it is possible that the same actors have worked within existing institutional structures to create a decollectivisation of public welfare on the one hand (disability) and a collectivisation of welfare (childcare) on the other hand. Moreover, the findings presented in this chapter suggest that the welfare state is capable of managing ‘new’ social risks, even while dealing with the reform of ‘old’ social risks. Both cases suggest that the Dutch welfare state has been successful in transforming itself to deal with changing social risks. The evidence presented in the next chapter confirms this view. Notes   Semicollectivisation refers to the fact that the provision of childcare subsidies is partially covered through public means and partially covered through mandatory employer subsidies. Most parents are still financially responsible for a portion of childcare costs, therefore there has not been a full collectivisation of childcare. 1

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Transforming the Dutch welfare state   In the Netherlands, childcare is not often perceived to be an issue related to child wellbeing, despite evidence that ‘if external care is of high quality, its effect on children’s school outcomes is clearly positive, especially for less privileged children. What is more, the positive effects persist beyond schooling into adulthood’ (Esping-Andersen, 2009: 142). Interestingly, demographic research shows that while parents’ employment has increased over the years, this has not led to a decrease in time spent with children. On the contrary, parents nowadays invest more time in children than 40 years ago (Gauthier et al, 2004). 2

  By 2009, the labour market participation of women aged 15–64 had reached 65.8% in the EU-15 and 60.2% for Europe as a whole (OECD, 2011). As a statistic, however, this says very little about the structure of women’s employment (in particular, part-time versus full-time), labour market segregation or other issues, such as the gender wage gap. 3

  Childcare policy got its start within the Ministry of Health,Welfare and Sport primarily due to the organisation of playgroups (peuterspeelzalen), which was seen as part of child welfare policy. Targeted childcare policies were also created at the Ministry of Social Affairs and Employment, for example in relation to social assistance benefits or lone mothers. These policies were separate from childcare policy at the Ministry of Health, Welfare and Sport. 4

  This Dutch saying, which does not have an English equivalent, means roughly, ‘It takes one to know one’. The saying here refers to an internal discussion at one of the trade union confederations. In essence, the interviewee is saying that the mistrust towards employers expressed by certain trade union representatives also says something about the trade union confederation itself. 5

  While there was a great deal of debate prior to the legislation, employers’ organisations responded rather mildly to it following its implementation. “It’s a bit of politics because the result was roughly the same, it wouldn’t have mattered [the mandatory subsidy, MY]. Back then… politicians always call for legislation because that’s a politician’s instrument and collective labour agreements are the instrument of the social partners. It never happens fast enough in collective labour agreements or it’s never enough. […] At some point, the deal is made and they say: ‘We’re going to arrange it through the tax premiums.’ So be it. It really makes little difference” (I36, employers’ organisation director). The interviewee is referring to the fact that whether the money is financed through collective labour agreements or through tax premiums paid to the state, the perceived financial difference to employers is marginal. In fact, for many employers, the new legislation in 2007 was seen as simplifying an increasingly complex issue. 6

  Another recent example is the universal old age pension in the Netherlands (AOW). In the spring of 2009, the social partners were given seven months to find an alternative solution to the government’s preference for raising the age of retirement and old age pension eligibility from 65 to 67 years of age. When the social partners failed to come up with an alternative, the government planned to intervene with legislation. However, following the fall of the cabinet in February 2010, the legislation was tabled. In the summer of 2010, the social partners reached an agreement about the eligible pension age. 7

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Collective childcare protection: the new workfare The in 2010 newly elected cabinet used this agreement to outline goals for increasing the eligible pension age in the coming years (Rijksoverheid, 2010).

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Taylor-Gooby, P. (2004) New Risks and Social Change, in P. Taylor-Gooby (ed) New Risks, New Welfare:The Transformation of the European Welfare State, pp 1–28. Oxford: Oxford University Press. Tijdens, K. G. and Lieon, S. (1993) Kinderopvang in Nederland: Organisatie en Financiering, Utrecht: Jan van Arkel. Tweede Kamer der Staten Generaal (2000) ‘TK 26 587’, Lower House of Parliament: The Hague. Tweede Kamer der Staten Generaal (2006) ‘TK 28 447’, Lower House of Parliament: The Hague. Visser, J. (2002) ‘The first part-time economy in the world: a model to be followed?’ Journal of European Social Policy, 12 (1): 23–42. Visser, J. and Hemerijck, A. (1997) A Dutch Miracle: Job Growth,Welfare Reform and Corporatism in the Netherlands, Amsterdam: Amsterdam University Press. VNO-NCW (1998) ‘Arbeidsvoorwaardenoverleg 1998 (Employment Conditions Memorandum)’, The Hague:Vereniging VNO-NCW Weyers, H. (2010) ‘Smoking Bans in the Netherlands: A Mix of Self-Regulation and Regulation by Government’, Legisprudence, 4 (3): 342–7. Yerkes, M. (2006) ‘What Women Want: Individual Preferences, Heterogeneous Patterns?’, Amsterdam: University of Amsterdam, Doctoral Dissertation. Yerkes, M. (2009) ‘Part-time Work in the Dutch Welfare State: the ideal combination of work and care?’, Policy and Politics, 37 (4): 535–52. Yerkes, M. (2010) Childcare as a Social Risk in the Netherlands, in P. Kemp (ed) Social Protection for a Post-Industrial World, pp 77–92. Oxford: Intersentia. Yerkes, M. and Tijdens, K. (2010) ‘Social risk protection in collective agreements: Evidence from the Netherlands’, European Journal of Industrial Relations, 16 (4): 369–83. Yerkes, M. and Visser, J. (2006) Women’s Preferences or Delineated Policies? The Development of part-time work in the Netherlands, the UK and Germany, in J.Y. Boulin, M. Lallement, J. Messenger and F. Michon (eds) Decent Working Time, New Trends, New Issues, pp 235–62. Geneva: ILO.

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Employability: lack of clarity, lack of protection with Pascal Derogee and Hans Pruijt Welfare state analyses of the last decade have argued that a shift is taking place from the welfare state to a social investment state (Esping-Andersen, 2000), or in Gilbert’s terms, an ‘enabling state’ (2005). In the social investment state, the focus is on human capital investment through improved training and education across the life course. Empirical evidence for this shift is sought in the presence of activation or active labour market policies implemented by welfare states in an attempt to reduce dependence on social protection programmes and to increase labour market participation. A recent article by Hudson and Kühner (2009), in contrast, argues that there is little quantitative evidence to suggest that a shift from social protection to social investment is taking place. But the authors rely on OECD data, which details government expenditures, thereby missing a significant proportion of investment in education and training provided for outside the welfare state by employers or collective agreements. As this chapter will show, the Dutch case makes it clear that protection of a new social risk – insufficient employability – is possible even without the creation of collective welfare state protection, namely through collective bargaining. Employability policy can be related to a number of social risks, but the social risk being looked at here is insufficient employability, expressed in a lack of schooling or training, which complicates labour market mobility or can lead to a labour market exit.As noted in an earlier chapter, the shift to lengthier educational trajectories and an increased emphasis on individual responsibility in obtaining skills and training places low-educated individuals or individuals with outdated skills in an increasingly precarious position (Elchardus et al, 2003).At the same time, increased labour market flexibility places more demands on individual workers to be adaptable, flexible and mobile. Individuals with insufficient employability are likely to have a greater risk of not only unemployment, but also decreased job mobility or difficulty in returning to employment following a labour market absence. Insufficient employability, then, is a broad, diffuse risk that has gained increased attention as a ‘new’ social risk. The concept of employability developed as a business concept in the US during the 1990s and gained popularity in the Netherlands in the mid-1990s. During this same period, the risk associated with a lack of proper schooling or training also began to gain recognition. In the Netherlands, varying perceptions of insufficient employability have allowed a common foundation for employability policy to take 107

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shape within collective bargaining. In contrast to disability or childcare policy, however, no traditional collective welfare state arrangement was developed to deal with the risk of insufficient employability. Employability is not perceived to be the collective responsibility of the welfare state due to its diffuse definition, the diffuse interests involved and due to the absence of a clear relationship with improved employment opportunities. However, the lack of collective protection from the welfare state does not imply an absence of collective protection, nor does it imply a lack of state involvement.The next section provides a description of four major developments in employability policy in the Netherlands. In the sections that follow, each of these developments is looked at in turn, considering what theoretical questions are raised by these developments and how they can be explained. Finally, the concluding section relates these developments to the previous cases of disability and childcare protection.

Employability policy in the Dutch welfare state There are four important developments in employability policy in the Dutch welfare state that are of theoretical interest. First, the concept of employability takes root but is defined differently by different groups of actors. Second, the state became substantially involved in employability policy.Third, there has been a continual avoidance of developing collective protection of employability within the welfare state. Lastly, employability protection has developed significantly within collective bargaining. The first major development in employability policy deals with how the concept of employability takes root in the Netherlands and how it is defined. It is both empirically and theoretically interesting to understand why a concept originally constructed in US management terms (Kanter, 1989, 1991) not only becomes popular in another country but is adapted into collective bargaining and welfare state policy as well. In the Netherlands, speaking about employability policy became fashionable during the late 1990s. Dutch management consultants borrowed the concept from US human resources management thinkers such as R. M. Kanter (Pruijt and Derogee, 2010). In the early 1990s, the leading Dutch consultancy firm Berenschot began promoting the concept to human resource management professionals and labour market specialists. And by 1993, the word ‘employability’ appeared for the first time in a Dutch newspaper when Joep Bolweg, consultant and managing director at Berenschot Social Management Group, voiced his opinion about standardised career tracks:‘Extremely dangerous, because they create false expectations. The organisation of the near future is unknown, as are the positions in it that have to be filled.There is no resort other than increasing the versatility and employability of employees’ (Meijnen, 1993: 23).Two years later, Heleen Mes (1995), also from Berenschot Social Management Group, published the first Dutch article on employability.Why did employability take root in this context, moving from a human resource management concept to a dominant concept within collective bargaining and the welfare state? And how do various actors define this concept? 108

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The second important development in employability policy is the substantial involvement of the state. Starting in the mid-1990s, Dutch governmental policy makers concerned themselves with the concept of employability. The main role of the state in employability policy has been the role of facilitator, with the state choosing to leave the creation and implementation of employability policy in the hands of the social partners. The state has facilitated employability policy in numerous ways, for instance by making agreements with the social partners on developing employability policy in collective bargaining as well as facilitating ‘think tanks’ to consider how employability policy can be implemented more usefully. This role has changed slightly with the onset of the financial crisis in 2007–08. For example, the state is currently financing a retraining subsidy to improve intersectoral training and mobility (omscholingssubsidie). Under this temporary arrangement, the state finances half of retraining costs, up to a maximum of 2500 Euros, to make employees threatened with dismissal in one sector more attractive to employers in other sectors (MinSZW, 2009), in that manner facilitating jobto-job mobility. Such measures, although temporary, are possibly indicative of gradual, institutional change, to be discussed later. Thirdly, with the welfare state’s role principally limited to facilitator and with the regulation of employability policy taking place within collective bargaining, no public collective protection developed within the Dutch welfare state for insufficient employability. Despite its acceptance and diffusion as a concept by both collectively organised actors and welfare state actors, employability is still seen to be an issue primarily dealt with in collective bargaining – a shared responsibility of employers and employees.Why is this seen as an issue for self-regulation by the social partners? Why do trade unions and individuals accept the emphasis placed on individual responsibility? In turn, why do employers accept the responsibility placed on their shoulders? The answers to these questions provide important insight into how the risk of insufficient employability is perceived and managed in the Dutch welfare state. The final major development in employability policy is the increase in employability coverage in collective bargaining in the Netherlands during the past two decades.A substantial share of collective agreements offers some employability arrangements in the form of schooling or training. The overall increase in collective bargaining coverage has not always led to increased protection against insufficient employability, however.As evidence in a later section will demonstrate, the implementation of employability arrangements is highly dependent upon the actions of line managers and can be difficult for small and medium enterprises, as well as different sectors of the labour market. Of interest here is how this emphasis on employability in collective bargaining develops and how to explain employers’ and trade unions’ interests in implementing employability arrangements.

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The acceptance and diffusion of the employability concept Employability in the Netherlands has developed from a management concept to a fully fledged policy area during the past two decades. Given the relative stability of welfare states and welfare state policy (Pierson, 2001), the acceptance and diffusion of not only the term employability but employability as a policy concept needs to be explained. From an industrial relations perspective as well, the broadening of collective bargaining topics from the more narrow focus on wages and pensions to areas such as employability policy and work-life are also of theoretical interest. How has employability taken root within this institutional context and what mechanisms explain its acceptance and diffusion? Within the Dutch institutional context, the concept of employability is accepted because it offers actors a possible means of addressing the risks associated with a lack of employability.The explanation for its subsequent diffusion is connected to an actor orientation mechanism. Simply put, this mechanism predicts that composite actors, with the exception of the state, will have their own shared norms and identities. The state comprises a number of smaller composite actors – relevant political parties. Each of these groups will act on behalf of their members, be influenced by their own policy experts and interpret the concept of employability in terms of their own subjective interests and preferences (Scharpf, 1997) – they create an actor orientation. As argued in this chapter, it is precisely these different interpretations of the employability concept that allow the state and the social partners to coordinate with each other, creating a coordinated employability policy (see also Pruijt and Derogee, 2010). How is employability defined? From a purely academic standpoint, employability can be seen as employee empowerment, providing employees the ability to manage their own career. Or as Gazier notes, employability is that which makes ‘each worker a more aware and more independent organizer of the succession of activities and commitments that, combined, constitute his/her working life’ (Gazier, 2001: 23).This definition is close to the initial definition of Kanter, who created the concept during the 1980s. Kanter (1993), in particular, emphasises the freedom employability gives employees to shape their own future within a socially innovative organisation. In that sense, employability can be understood as increasing employee desirability (Pruijt, 2007), in essence improving individuals’ ability to have and maintain employment (De Grip, 2001). Employability can also be seen in terms of both supply and demand, being representative of not only employees’ need for increased labour market mobility and task differentiation but also employers’ need for increased flexibility and task differentiation (De Grip et al, 1999). In other words, employability is defined in terms of adaptability, flexibility and mobility. Luken (2002) notes some authors use the terms employability and flexibility almost interchangeably. Employability in this approach focuses on the ability and willingness of the employee to adapt to the wishes of the employer and the job 110

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requirements of this day and age. Especially the acceptance of being assigned to other activities, non standard working hours and different working places is crucial within this approach. (Luken, 2002: 8) Research from the Dutch Institute for Labour Studies (Brouwer, 2001) defines employability as consisting of four components: schooling, quantitative flexibility, qualitative flexibility and geographical mobility. First of all, employability is defined by the willingness and ability of individuals to be trained and schooled, which results in improved labour market opportunities. Second, employability entails a degree of quantitative flexibility, the willingness and ability to adapt to different working hours or to work at peak hours. The third component is qualitative flexibility, the willingness and ability to perform multiple tasks and functions. And finally, employability concerns geographical flexibility, the willingness to commute or relocate for a job (OSA, 2001). The first, third and forth components are also the building blocks of the employability concept used by De Grip and colleagues (1999).The various ways researchers give shape to and construct the concept of employability show that adaptability, flexibility and mobility play an important role within this concept.The terms adaptability, flexibility and mobility also play an important role in Dutch policy makers’ conceptualisation of employability. As noted earlier, the concept of employability was adopted from US human resources management principles into the Dutch business world in the early 1990s. But what caused employability’s advance onto the Dutch political and economic agenda? Current thinking on the risks associated with the development of the economy suggests that it may be seen as a collective approach towards the risk that employees run of becoming insufficiently employable at some point in their careers, a risk much broader than unemployment alone. This risk tends to become universal due to an increasing pattern of ‘creative destruction’, whereby technological and economic changes cause old industries to decline, freeing up resources for new combinations. One line of thinking that points in this direction is US management thinking. Kanter (1991) suggests that the adaptation of an organisation to creative destruction entails the disappearance of job security. Companies need to be agile and flexible, which involves moving into territories where the existing workforce may not be able to follow.Therefore, employers can no longer promise job security; job security is obsolete (Ghoshal, 1999; Herriot, 1996) and long-term secure employment is a thing of the past (Kanter, 1993).The solution to the problem of creative destruction is enhanced employability (Kanter, 1989). Risk society theorists also suggest that risks are becoming increasingly inescapable (Giddens, 1999). Because of this, it would not be illogical for the state or other actors involved in the provision of welfare to assume responsibility for investments in employability. More specifically related to the Dutch institutional context, the mid-1990s was a period in which both welfare state and industrial relations actors were struggling with the question of how to increase flexibility within the labour market without 111

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sacrificing employees’ job security. In 1996, with a so-called ‘purple’ coalition in power, referring to the mix of ‘red’ social democrats (Labour) and ‘blue’ conservatives, Prime Minister Wim Kok gave the social partners three months to respond to the growing conflicts concerning labour market flexibilisation (interview fragment I22; StAr, 1996a).The social partners came up with a solution to this conflict by creating what would become the 1999 Flexibility and Security Act (Wet Flex en Zekerheid). Although the act was not implemented until 1999, the conflict surrounding increased labour market flexibility and how to approach the issue had already manifested itself by 1996. ‘Subsequently there was a conflict between employers and employees about the flexibilisation of the labour market. That had to do with a number of things: it was about labour contracts, it was about dismissal laws, it was about temp agencies. And then an interesting mechanism came into play:VNO-NCW lobbied like crazy with the Minister of Economic Affairs, Weijers, to create as much flexibility as possible, and we [trade union FNV, MY] lobbied for the opposite with Ad Melkert [Minister of Social Affairs and Employment, MY]. And this led to conflict within the cabinet each time. And at that time we had the advantage that Wim Kok [then Prime Minister, MY] used to be a trade union director because he saw that happening, he saw what the lobbies were doing and subsequently proposed to the cabinet: let’s give employers and employees [trade unions, MY] three months. If they can come up with a unitary proposal, we’ll make it into law, and then I’m free of all that nonsense in the cabinet.’ (I22, former trade union official) Within this political and economic context, the concept of employability took hold. Following the introduction of the concept in business circles, the concept of employability was adopted by key Dutch labour market and economic institutions, such as the Labour Foundation (Stichting van de Arbeid; StAr) and the Social and Economic Council (Sociaal Economische Raad; SER). Policy documents from this period refer to the two seminal Dutch texts that are, in turn, based on American work (Pruijt and Derogee, 2010). In late 1996, the Dutch Labour Foundation produced a policy document on employee training (StAr, 1996b). Referring to a book by Gaspersz and Ott (1996), the authors used the perspective of ‘employability’, noting there is no Dutch equivalent for the term. The concept of employability was also being adopted in political institutions as well. In 1997, the Ministry of Economic Affairs organised an ‘Employability Conference’ and then Prime Minister Wim Kok spoke about the topic.The SER and the Central Planning Bureau followed with policy documents that applied the concept to the Dutch context (CPB, 1999; SER, 1998). While the concept of employability took hold, it was not defined or approached in the same manner by all actors involved. Rather, each composite actor – the 112

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state, employers and trade unions – interpreted employability based on their own shared norms and interests – their own actor orientations. This mechanism helps to explain how varying definitions of employability exist within the Dutch institutional context and explains the interests of these actors in defining employability as they do. These different definitions of employability coincide with group interests, which in turn have consequences for the way in which employability investments are translated into policy instruments. It is clear that trade unions in the Netherlands tend to focus on employability as defined in terms of employee empowerment and employee interests. They feel that employability should provide new opportunities for employees as well as security against job dismissal. As one trade union representative explains, employability can be defined as “[…] the intrinsic power that drives people themselves to be able to make certain choices in the labour market and to cope with threats and opportunities that may come their way” (interview fragment I3, 2009). A representative from a different trade union explains employability in terms of usability/availability1 and employees’ mobility. ‘How do you define employability?’ [MY] ‘Well, to be brief, it’s that people are usable/available and stay that way in their current job and possibly in their future employment as well. […] It’s not only focused precisely on what you need for this job but it’s also aimed at keeping up to date in a broader sense so that you can move easily into a different job, even to a different sector.’ (I7, former trade union representative) Other key terms used by trade union representatives are individual tenability or empowerment. ‘Employability should add to the individual tenability of employees. So employees should be able to take their future and career into their own hands.They shouldn’t depend on opportunities within the company that happen by chance. […] Employability is the way to keep people in employment longer. Give people opportunities. Of course, some people will take care of themselves and other people will need help. If you invest as much as possible, some people will see the light.’ (Interview with a trade union representative (taken from Pruijt and Derogee, 2010)) In sum, trade unions view employability in terms of strengthening the position of employees.They focus on empowerment, creating individual control in terms of career development, making employees more resilient to labour market demands, increasing job security and opening employees up to new opportunities. Trade unions, as can be expected, show a dominant actor orientation towards the 113

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interests of their members, defining employability in terms of the shared norms and identity of employee representation. In contrast, employers define employability in terms of adaptability, flexibility and mobility. ‘Crudely speaking it’s about broader usability/availability and that can take on different forms. It can be usability/availability within a company or the labour market, in other words that you’re prepared for a different usability/availability outside the company or outside the sector.’ (I35, employers’ organisation representative) In this sense, employers relate employability both to the firm as well as the employees within the firm.As one employers’ organisation representative explains, ‘It mainly has to do with the usability/availability of the employee.And that usability/availability is first and foremost for the organisation itself. That is naturally your first priority as an employer. But subsequently it’s also important that the employee work on his/her employability so that he/she can make a transition at some point, and that aspect is starting to develop more now.’ (I10, employers’ organisation representative) The interviewee goes on to state that transitioning into alternative employment is becoming increasingly important because few jobs remain challenging after five years or so, meaning employee satisfaction will subside. Moreover, employers and employees must be able to deal with the physical demands of jobs and the feasibility that employees will be able to continue in their current job indefinitely. In practical terms, this means employers are faced with a balancing act. On the one hand, it is important to increase employees’ employability; on the other hand they are worried about poaching. The interviewee uses the example of an employability policy at Amsterdam Schiphol Airport. Bag handlers are limited to the number of years they can carry out the manually intensive labour required by their job. To prevent employees from reaching that point, bag handlers can be retrained into security guards after a number of years; a seemingly win–win situation in which the employer saves money on eventual sickness or disability costs and the employee maintains a position within the company. While a dual focus on the employability of the company and the employee works well in this situation, not all types of jobs or organisations are suited to such an approach. ‘But of course there are a number of […] knowledge-intensive jobs where you’d have to say: Sure, it’s a great idea to invest in someone’s skills and training, but if he subsequently moves on to a competitor… well, what use is that to me? If I’m really unlucky, he’ll take some of my clients with him as well. That’s the other side of employability.’ (I10, employers organisation representative) 114

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The actor orientation mechanism, with employers focused on the flexibility and adaptability of their own organisation in relation to their employees, makes employers hesitant to invest blindly in generally usable skills due to a fear of poaching or limited returns on their investment. In essence, employers’ perception of employability becomes a collective action problem: it is more rational for a company to poach from competitors than to invest in general employee training. On the other hand, generally applicable skills provide improved job security for employees as well as new job opportunities. In this manner, employers’ and employees’ interests seemingly oppose each other.With different actor orientations, it is difficult to create a single shared norm or identity regarding employability.Yet these different interpretations do not impede the development of employability policy in collective bargaining in the Netherlands. It is precisely this mechanism of different interpretations of a single concept that explains how employability is successfully diffused throughout Dutch policy – each composite actor maintains their own working definition, definitions which allow these actors to find common ground. Yet another definition is maintained by the state. The Dutch government, despite its coalition structure in which generally no single political party has an absolute majority, displays a basic similarity in defining employability in terms of life-long learning. In general, it is in the interest of the Dutch government to have and maintain a highly educated, highly skilled and adaptive workforce. In the ‘Lifelong Learning’ programme of the European Union (Kok, 2004) continued skill investments in the national workforce are seen to be highly preferable and desirable. Skill investment is viewed as the chief means of achieving the 1997 Lisbon agreement goals of increasing economic growth, competitiveness and social inclusion within the European zone (Kok, 2004).2 Furthermore, a welleducated workforce will be more active in terms of labour market participation and higher labour market participation levels translate into positive effects on income tax revenues, which can help suppress welfare state spending. This ‘promise’ of employability has made it a popular concept within Dutch economic and social policy. Policy experts who advise the state have proposed employability measures, included in reports from both the SER (see, for example, SER, 2002, 2005), as well as the Scientific Council for Government Policy (WRR, 2007). A coalition of Christian Democrats, Social Democrats (Labour) and the ChristianUnion also stressed the importance of employability in the coalition agreement signed by these political parties in 2007. To increase participation ‘[…] the social security system will be developed in such a way that it stimulates acquiring new skills, employability and labour market qualifications’ (MinAZ, 2007: 25). Interviews with members of parliament confirm the state’s perception of employability being defined in terms of life-long learning. ‘It [employability, MY] is very clearly related to life-long learning, something which we are naturally focusing on a great deal – to think about how you can keep your knowledge and skills up-to-date during 115

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your career and how to develop them. How to shape your broader usability/availability. […] That’s something we’d like to facilitate even more.’ (I48, Christian Democratic MP) This definition of employability in terms of life-long learning is shared by other political parties as well. ‘It [employability, MY] is mostly life-long learning […] something that should be supported by companies.That’s what we put in our newest recommendations: companies should have to prove they invested in their employees because it is rather shocking to see that people are schooled and trained in companies until they’re 45 years old, but after that it really collapses.’ (I28, Green Party MP) In 2005, the state installed a temporary directorate aimed at improving life-long learning in terms of employability. As one policy maker explains, “life-long learning is something that everyone agrees is important – that’s half the battle. Sometimes it’s viewed from an ideological perspective, other times more from an employability perspective; that shifts throughout time” (interview fragment I32, 2009).The interviewee expresses the general political understanding that life-long learning or employability is needed to address changing individual social risks as well as why this approach is in the interest of the state. ‘Your initial education is no longer sufficient to continue functioning socially throughout the rest of your life and employment and work are naturally a significant part of that. A) we have to make sure that many people in the Netherlands work and keep working because otherwise we can’t keep society functioning and B) work also contributes to your own development and identity.’ (I32, governmental policy maker) The various interpretations of trade unions, employers’ organisations and the state are clearly visible – employability is defined in terms of each actor’s self-interest. These current definitions have changed little throughout the years. An analysis of annual labour conditions memoranda from trade union confederation FNV and employers’ organisation VNO-NCW, as well as annual Autumn Agreement texts signed by the social partners and the state, demonstrates that these definitions of employability have been very stable since they were first mentioned in these documents in 1996 (see Table 5.1). Each of these documents has been examined to determine where the word employability is discussed and to indicate how it is being defined. Trade union confederation FNV initially treated the term with reservations. Subsequently the term became associated with training, which led up to their complete acceptance of the concept as empowerment by 2006. Employers’ organisation VNO-NCW has consistently maintained the same definition, viewing employability as a tool 116

No definition, keeps the term at arm’s length by putting it in inverted commas Term does not occur

Term does not occur

Associated with training

Term does not occur

Term does not occur

Term does not occur

Associated with training

Term does not occur

“Employability is the right to personal development.”

1997

1999

2000

2001

2002

2003

2004

2005

2006

Qualification, training beyond actual job requirements. Usability, physical and intellectual mobility, flexible attitude Usability, physical and intellectual mobility, flexible attitude Usability, physical and intellectual mobility, flexible attitude Usability, physical and intellectual mobility, flexible attitude Usability, physical and intellectual mobility, flexible attitude Usability, physical and intellectual mobility, flexible attitude Usability, physical and intellectual mobility, flexible attitude Usability, physical and intellectual mobility, flexible attitude Usability, physical and intellectual mobility, flexible attitude Usability, physical and intellectual mobility, flexible attitude

Employer’s association VNO-NCW Term does not occur

Enhanced usability, schooling, EVC* development plans, career policy Enhanced usability, schooling, EVC development plans, career policy Enhanced usability, schooling, EVC development plans, career policy Enhanced usability, schooling, EVC development plans, career policy Enhanced usability, schooling, EVC development plans, career policy Enhanced usability, schooling, EVC development plans, career policy

Enhanced usability, general and job-specific schooling, create adaptability (Enhanced) usability, general and job-specific schooling Term does not occur

Enhanced usability, general and job-specific schooling, create adaptability

Government Term does not occur

Source: FNV annual labour conditions memoranda;VNO-NCW annual labour conditions memoranda; annual Autumn Agreement texts, 1995–2006.

*EVC stands for Erkenning van Verworven Competenties, or the Recognition of Obtained Skills. It is also called a Certificate of Experience (Ervaringscertificaat).

1998

Trade union FNV Term does not occur

YEAR 1996

Table 5.1: T   extual definitions of employability: FNV,VNO/NCW and the Dutch government, 1995–2006

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for creating a more multifunctional, flexible, adaptable workforce. Lastly, the state has continued to focus on enhanced usability. Overall, there was an initial emphasis on stimulating general and job-specific schooling in order to create an adaptable, multifunctional workforce. In 1999, this adaptability became part of the context rather than part of the definition: ‘…the necessity to be able to react to changes in the environment, mergers, downsizing, shrinking employment and age-conscious management policies’ (StAr, 1999). In 2001, the emphasis shifted again slightly, from focusing on both types of schooling to schooling, stimulating the creation of company and individual development plans and career policy. In sum, the interviews and document analysis show that the concept of employability is perceived in different ways. An actor orientation mechanism, in which composite actors were able to define employability in their own way, facilitated a subsequent focus on their shared norms and identities and explains how and why these different definitions take root and coexist.While employers are primarily focused on flexibility, mobility and adaptability, trade unions are more focused on employee empowerment and increased job security. The state views employability primarily in terms of life-long learning. These varying definitions are not mutually exclusive – that which increases flexibility for the firm can also increase employee empowerment, for example.These different interpretations of employability are evident in the remaining three developments of employability policy: in state involvement, the consistent avoidance of collective protection in the welfare state and the expansion of employability policy in collective bargaining. For example, the state’s definition of employability is evident in its role as facilitator of employability policy just as competing visions of flexibility and empowerment are evident in the social partners’ approach to employability in collective bargaining. In that manner, the actor orientation mechanism is essential in explaining how actors give meaning to and manage a new social risk. Its effect on the development of employability policy will continue to be evident throughout this chapter.

State involvement in employability Since the acceptance and diffusion of the employability concept starting in the mid-1990s, the Dutch government’s involvement in employability policy has increased. The involvement of the state needs to be seen first and foremost in terms of its role as facilitator of employability. In the past two years, with the onset of the economic recession, this role seems to be changing, although the state’s role remains primarily limited to that of facilitator. The role of the state can be attributed to two mechanisms: a path-dependent mechanism of increasing returns and a deadweight effect mechanism. In the latter, the state does not need to involve itself (financially) in a policy area that would otherwise be covered.The economic crisis, however, has spurred the state to become financially involved in a number of employability issues, and while the financial involvement of the state is temporary, to be discussed later, it could bring about institutional change in the 118

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long run.The former refers to the institutional context of the Dutch educational system, which is not designed to deal with the risk of insufficient employability. While social risks have shifted, the institutionalised division of responsibility for initial and post-initial schooling remains intact, making it difficult to adapt welfare state institutions to the new risk of insufficient employability. Collective bargaining structures provide more flexibility in this regard, a point returned to later in this chapter. The limited role of the government as facilitator is in part due to institutional constraints within the welfare state. With the exception of increased state responsibility during the recent recession, the Dutch state emphatically does not take responsibility for post-initial education, which is the core investment in employability. This principle of non-responsibility is firmly established, and supported by employers and trade unions as represented in the SER and the Labour Foundation. Employability entails primarily post-initial education trajectories, which is seen to be the responsibility of the social partners. The state’s responsibility is limited to initial educational trajectories and given this path-dependent mechanism, a change in these institutional structures is unlikely to occur. ‘Schooling of the working population is primarily the responsibility of employers and employees and not the government. The government has a stimulating role to A) get it started, a number of things and B) to help some groups of people who otherwise would not get around to it.’ (I32, governmental policy maker) In the absence of any exogenous or endogenous push to change this structure, the state is limited in its ability to respond to the changing context wherein sufficient education and training are becoming increasingly important (Elchardus et al, 2003). At the same time, the role of the state is explained by the presence of a deadweight mechanism, or windfall effect (West, 2000).A deadweight or windfall effect refers to subsidising activities that would happen without state subsidies anyhow (West, 2000). In other words, there is no push for the state to become financially involved in a policy area already subsidised by the social partners. But the deadweight effect does not preclude the state from being involved in employability policy as facilitator and information provider. While the state is constrained by existing institutional structures, it still must strive to ensure the prosperity of the population (Dryzek, 1996: 479) – in other words, the state has a functional imperative.The Lisbon Strategy as well as expected labour shortages in the near future bring this functional imperative to the fore. Based on the Lisbon Strategy, the Dutch government has formulated a number of targets, such as increasing the highly educated percentage of the workforce from 40% to 50%, and halving the number of school dropouts (from 70,000 to 35,000). But even prior to the Lisbon Strategy, the Dutch government attempted to facilitate the 119

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increased flexibility and mobility of its workforce. These concepts of flexibility and mobility fit well with overall welfare state goals of emphasising improved employment – facilitating the active involvement of the entire working population and increasing labour market mobility to ensure optimal levels of labour market participation. These goals, while not always termed ‘employability’, are evident throughout state documents (MinAZ, 2002; MinAZ, 2007). As one former governmental policy maker explains, employability had already become a topic of discussion in state policy during the mid-1990s. ‘And were you involved with the issue of schooling and employability? Was that term already being used?’ [MY] ‘Absolutely… of course! Def-i-nite-ly! Look, if you think labour market flexibility is important, then it’s important to provide people with the right tools to find a different job with a different employer. The worst thing that can happen is that you hire someone and let him sit there for 30 years and he learns nothing, and eventually he ends up without a job when he’s 50 years old, and then he still has 15, 17 years to go.’ (I37, former governmental policy maker) In the past five years, the state’s role as facilitator has become more explicit. One example is the creation of regional cooperative networks, sponsored through the Project Directorate Learning & Working, in which employers, municipalities, the UWV (Implementation Institute Employees’ Insurance, responsible for the distribution of social benefits) and educational institutions cooperate.There are 44 of these regional networks that organise combinations of working and learning to facilitate labour market re-entry. ‘Why is there an emphasis on a regional approach?’ [MY] ‘Our starting point was: that’s where people need to find each other. Here [at the national level, MY] is not where jobs are created, they’re created there.We don’t make job opportunities – those are somewhere out in the different regions. […] It all happens regionally. If I look at our department, quite concretely, we have to make sure that 90,000 dual or EVC trajectories are realised during this cabinet period. I always say, we [the government, MY] don’t do anything – we make sure that other people do it.’ (I32, governmental policy maker) As this example shows, while the state does not view itself as primarily responsible for employability policy, it is not absent from employability policy.3 As a consequence of the economic recession that began in 2008, the role of the state as facilitator has received a new impulse in the past two years. First, the state has attempted to facilitate more concrete agreements between the social 120

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partners during the economic crisis. These agreements are most often created within the Regiegroep, where the Ministry of Social Affairs and Employment facilitates meetings between the social partners and the state. ‘The last agreement, for example, and that’s quite concrete: youth who are unemployed for longer than three months are all offered an internship placement. It doesn’t get much more concrete than that and employers don’t agree to these terms that quickly but they see the importance of such a measure, and they were very worried that once again, another large group of young workers would end up outside the labour market and in the end, that doesn’t help them [employers, MY] either.’ (I3, governmental policy maker) Intriguing both empirically and theoretically is the increased financial responsibility taken on by the state during the crisis. To facilitate employability further, particularly in the form of mobility between employment sectors, the state began subsidising training that specifically targets employees at risk of losing their employability, the retraining or omscholingssubsidie mentioned earlier. As a governmental policy maker explains, this subsidy is financially interesting for the state because it helps limit unemployment costs. ‘If they [employees, MY] switch from a metal company to nursing then it’s different, then re-schooling is necessary – that’s what we have the re-schooling bonus for. And if you move from job to job you get the re-schooling bonus, then the WW [unemployment insurance, MY] falls away – you don’t end up in unemployment and the new employer knows he’s going to get the bonus to be able to train the worker. So it’s really intended to stimulate the whole ‘from job-to-job’ thinking.’ (I7, governmental policy maker) This subsidy is a crisis-related initiative in which the state doubles the money that sector funds allocate for training, allowing employees to move into a new line of work in another sector. ‘The bonus [schooling subsidy, MY] is not so special because it has to do with the crisis. But in general, schooling is becoming more important because of a continually changing economy but also because people will have to change jobs more often to be able to work longer, which requires re-schooling from time to time. So, you could say, we’ve been searching for quite some time as to how you ensure that schooling really becomes a priority and that employers really do something about it.’ (I7, governmental policy maker)

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As a result of the crisis, however, another measure has been taken that signals a possible shift in internal political barriers (Pierson, 1994), which, in the long run, can lead to gradual institutional change (Hacker, 2004). The state created a crisis-related initiative called part-time unemployment (Deeltijd Werkloosheidswet or Deeltijd WW). Under this arrangement, firms can temporarily reduce an employee’s working hours by a minimum of 20% and a maximum of 50%, making the employee eligible for a partial unemployment benefit.4 This arrangement is only available to otherwise healthy firms who are in financial trouble as a result of the financial crisis and is intended to help keep skilled workers at that firm. The retraining subsidy and part-time unemployment are clearly employability arrangements with direct financing from the state. Temporary in nature, they do not change the presence of a deadweight effect. However, these arrangements help diminish internal barriers to reform, which, in combination with a change in the external political environment, could lead to gradual institutional change over the long term (Hacker, 2004). The success of state involvement in employability, temporary as it might be, makes it difficult for the social partners to oppose future changes to employability policy. How the state’s involvement continues to develop will be of continued interest in the coming years. In sum, shaped by path-dependent and deadweight mechanisms, state involvement in employability policy is substantial but clearly defined – working to facilitate increased training and schooling of the working population without being financially responsible. The state has a functional imperative for being involved as facilitator in order to create a well-educated workforce. But with an institutional setup focused on state involvement restricted to initial schooling, and a clearly defined role for the social partners as responsible for post-initial schooling, the state is limited in its approach.

Employability and a lack of collective protection Related to the state’s role as facilitator is the overall lack of collective protection within the welfare state. When compared to other social risk forms, it is clear that a lack of employability is not perceived to be a public collective social risk; rather, there is a focus on collective bargaining with an emphasis on employer and individual responsibility. But why do trade unions and the public accept the emphasis on individual responsibility? And why do employers accept shared responsibility? For that matter, why emphasise the protection of employability through collective bargaining and self-regulation by the social partners rather than the welfare state? To explain the development of a continual avoidance of collective welfare state protection for employability, it is important to understand the interests driving these developments within the institutional framework of the Dutch welfare state and industrial relations. The focus on self-regulation in employability policy is best understood by a mechanism of path dependency and a corporatist mechanism. A corporatist mechanism refers to the power of organised interests (trade unions and employers 122

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organisations) to interact with each other and the state on various policy issues. If a corporatist mechanism is present in its ‘responsive’ format (Hemerijck, 1996), with both the state and the social partners willing to participate in a political exchange, actors will work together to provide social risk protection. In terms of employability, the social partners are willing to accept responsibility for employability protection as part of this corporatist political exchange. The choice for self-regulation by the social partners is due to path-dependent, positive feedback effects. In other policy areas, such as childcare and disability policy but also pensions and other welfare state areas, the Dutch government has often shared its regulatory function with the social partners, creating a path-dependent means of addressing risk protection. Self-regulation, whereby the social partners are responsible for regulating the development of particular policies involving workers, is the most obvious choice when it comes to employability policy because of the dividing line between initial and post-initial schooling. Given the Dutch institutional structure and the absence of a clear public collective risk, choosing to be facilitator and leaving the development of employability policy in the capable hands of the social partners is easily understood. ‘We feel that as the government there is a responsibility… the basic idea has always been that the social partners are responsible for the schooling of employees and the government is responsible for the schooling of the unemployed, to get them ready for the labour market.’ (I13, governmental policy maker) The theoretical dividing line drawn between governmental responsibility and social partner responsibility is often problematic in reality. Whether the line is drawn between the schooling of the employed versus the unemployed, or initial versus post-initial schooling, the dividing line leaves many grey areas. ‘I know that the SER […] advised that the public responsibility should be for initial [education, MY] projects and that when someone leaves the initial project and goes to work, anything they learn beyond that is no longer the responsibility of the government. […] I protested against that. […] It’s not like that in reality. Roughly 30 per cent of all students in higher education, paid for by the government, are over 30 years of age. They’re adult, according to all reasonable measurements. They are being subsidised so a whole lot of public financing is going to adult education, through the regular payment system. Only we don’t make it visible, that’s what allows us to make such beautiful statements [about the division of responsibility, MY] because in reality it is very different.’ (I21, former crown member of the SER)

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It is precisely this grey area in the division of responsibility in employability policy and the relative newness of the topic that makes it attractive to rely on the social partners for self-regulation. Corporatist institutions provide positive feedback effects, and as long as the social partners are willing to approach employability policy through collective bargaining institutions because it is primarily perceived to be a risk that should be dealt with between employers and employees, then there is no incentive or pressure to deviate from this approach. Employers’ acceptance of this responsibility is also explained by a corporatist mechanism. Employability is perceived to be an issue for employers and employees, and thus an issue for collective bargaining between the social partners. Employers are more than willing to approach the subject of employability, particularly within the context of existing corporatist institutional structures, such as the Labour Foundation. ‘The idea of employability keeps coming up, also in the discussions of ‘from job to job’, like we had in the discussions this past autumn [Najaarsoverleg, MY] [...] So it comes up every time, not always under the same name but along the lines of: we need to try and keep someone from becoming unemployed, we need to keep people out of the WAO [disability benefits, MY] or if someone is in the WAO to get them involved once again in the labour market.’ (I4, representative in consultative organisation) Moreover, employers are responsive to the idea of employability because they can approach it from their own perspective, which emphasises flexibility and mobility. They accept the responsibility as long as the individual employee is willing to accept the responsibility for employability as well. ‘What’s being discussed now during the economic crisis is: from job to job [from work to work, MY].Yes, that’s great, but if someone hasn’t done anything about their employability in the past 20 years then it’s going to be difficult. Then you can say, of course, the employer should have done something about it but the employer has to ensure, in particular, that the employee can grow in their job. If it’s about making someone suitable for jobs outside the firm than of course an employer will say – “that’s great, but that’s an individual employee’s investment in themselves, so I expect that he will do something about that as well.”’ (I10, employers’ organisation representative) An important issue for employers, however, is whether they are willing to accept the financial responsibility of employability, in both time and money.Whether or not a firm can make use of sectoral funds (so-called O&O funds5), an employer is still faced with the costs associated with employability policy.

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‘There is a huge demand coming from the business end, in any case from organised business, the social partners, to put schooling into action. The cost of schooling, that’s not so bad, but it’s mainly the costs associated with a loss of time that are so high. In other words, when people don’t work for a few days; that costs a lot of money. Employees’ wages still need to be paid and production is idle. And at this point in time, we don’t have enough for that.’ (I3, former trade union representative) There is a willingness from the trade unions as well as employers’ organisations to cooperate with each other and address the issue of employability within collective bargaining – responsive corporatism is evident.The success of responsive corporatism helps negate the need for a collective welfare state response. Moreover, the absence of a public support mechanism, discussed below, helps explain why there is no further push to change this. Clearly policy makers perceive employability to be an issue at the level of individuals, which should be addressed in secondary labour conditions, not welfare state policy. ‘I wouldn’t know who else would be responsible for my employability other than myself. […] My employer is primarily responsible for his company. Not for me. And even more important, I think, is that if you focus too much on employability being between the employer and the employee, that in any case you miss all the people that don’t have an employer.’ (I27, governmental policy maker) This view was shared by most policy makers. However, a number of officials argued that individual responsibility needs to be facilitated by the state, particularly for groups most affected by a lack of employability, such as low-educated employees or individuals working at the lower end of the labour market. As one trade union representative explained, “Indeed, we feel that people have an individual responsibility, also when it comes to doing everything they can to stay employed and to get back into employment. But we find that not everyone is capable of doing so” (interview fragment I3, 2009). There is no push to change this situation. Unlike the ‘new’ social risk of childcare, where public opinion data demonstrate that citizens feel the state is in part responsible for providing childcare, data on public opinion show that there is no public support for the development of collective protection of employability within the welfare state. While a majority (56.3%) of Dutch citizens agreed or completely agreed with the statement that employees should have broader training than what they need for their job (see Table 5.2), 48.4% agree that training and education are the responsibility of the employer. 66.7% of all respondents agree or completely agree that employees are responsible for their own training and education. In contrast, only 16.1% of the respondents agree that the state is responsible for the training and education of employees.6 125

126

43.9 52.2 41.7 13.3

12.4 14.5 6.7 2.8

30.4

32.3

22.3

28.2

Neither agree nor disagree

Source: CentER data, author’s own calculations. Due to rounding, some totals may not equal 100%.

Employees should be trained more broadly than what they need for their job Employees are responsible for their own training/education Employers are responsible for employees’ training/education The government is responsible for employees’ training/education

Agree

Completely agree

36.6

15.0

8.6

11.7

Disagree

Table 5.2: Public opinion on responsibility for education and training, 2006 (in percentages)

14.3

2.9

0.8

1.3

Completely disagree

2.6

1.4

1.4

2.4

Don’t know

100.0

100.0

100.0

100.0

Total

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Employability: lack of clarity, lack of protection

These data demonstrate that there is no presence of a public support mechanism to push for the development of public collective protection for employability, as employability is perceived to be the responsibility of individuals and employers.

Increased protection in collective bargaining While collective protection of employability has not developed in the welfare state, there has been a substantial increase in protection in collective bargaining. Theoretically this increase in protection is puzzling – while responsive corporatism may be evident, why do the social partners focus on a newer, softer area of secondary labour conditions and how does this come about? They do this because they can each pursue their own interests while taking part in the corporatist political exchange. In other words, the actor orientation mechanism, discussed earlier, is salient in explaining these developments. The different interpretations of the employability concept allow both employers and trade unions to be self-interested and approach employability within the structural constraints evident in collective bargaining. Trade unions are willing to create employability arrangements because they believe it will improve individual empowerment. Employers, on the other hand, are willing to agree to employability arrangements in collective bargaining because it plays to the concept of increased flexibility. Each actor has their own, but not mutually exclusive, perspective. However, both sets of actors are constrained by the institutional context they operate in. While the social partners have managed to develop employability policy within sector-level and company-level collective agreements, the structure of Dutch collective bargaining hinders the formation of other arrangements, such as intersectoral employability arrangements in collective bargaining. Broadly speaking, collective labour agreements help to solve a collective action dilemma of attempting to protect against insufficient employability. Reaching an industry-wide binding agreement about conditions of employment makes poaching a less effective strategy (Soskice, 1991), provided that the agreement covers a sufficient number of employers in a given industry. Dutch collective agreements are, in most cases, generally binding to other firms within a sector given general extension practices (Algemeen Verbindend Verklaren; AVV). Industrywide enforcement of collective bargaining agreements prevents conflicts that can otherwise occur when unorganised employers are not bound to a collective labour agreement and hence are able to compete with each other on employment conditions (Rojer, 1996). A binding collective agreement will force organisations within the same sector to offer similar wages and conditions so that employment conditions within a sector will not deviate much between employers. The exception to this is the presence of company-level bargaining, which leads to increased differentiation in employment conditions. In the Netherlands, approximately two-thirds of collective agreements are currently concluded at the company level (Yerkes and Tijdens, 2010).

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Looking at employability arrangements in collective bargaining, we distinguish between two types of arrangements: job-specific schooling and general schooling. Job-specific schooling provides the skills needed to maintain satisfactory job performance in the current or future job. General schooling, in contrast, provides skills necessary to perform a different job, in essence to become multifunctional. The division between these two types of training is not clear. At times general training can provide important knowledge that enhances current job performance and at times job-specific training can provide knowledge that is usable within other jobs. In other words, the training offered in collectively bargained employability arrangements should be seen as a skills continuum.The surplus value of investing in employability is that it makes people better equipped in the labour market. However, this surplus value is also problematic as it suggests an increase not only in employee internal mobility, but in external mobility as well, making employees more attractive to other employers (Van Hoof, 1996). Data from the state’s monitoring of schooling arrangements in collective bargaining in the Najaarsakkoorden (Autumn Agreements), which has information on job-specific schooling and general schooling, show that the number of jobspecific schooling arrangements steadily increased to nearly 100% in 2004 before decreasing slightly, while arrangements for general training declined slightly from 21% in 1997 to 19% in 2007 (see Table 5.3).The results shown here seem to suggest that employability coverage is very high in collective agreements.The majority of the agreements cover job-specific training rather than general training. As noted earlier, however, the added value of job-specific training is not necessarily limited to job-specific tasks. It is also important to note that job-specific training is rather institutionalised in a number of sectors, such as health care, where employees must continually undergo training to maintain their licensure, for example. Such institutionalised arrangements may not always be included in collective agreements. Additional evidence on collective bargaining can be taken from the FNV-CAO databank Ducadam, which measures the availability of training not related to an individual’s job or function and the availability of individual education plans (POPs) in collective bargaining (see Table 5.4).The share of collective agreements offering these kinds of employability arrangements increased from 6% in 1995 to 31% in 2003, an impressive increase for a nine-year period.While career-oriented employability arrangements are not as prevalent as job-specific training, they are on the rise. The data suggest, however, that employers are hesitant to invest in general schooling for fear of losing their investment should employees move on to another company. As one former employers’ organisation representative explains: “They’re afraid that they will invest in an employee and that afterwards, he’s going to take his shiny, new diploma to the competitor where he can work for more money. That’s really an obstacle” (interview fragment I24, 2009). The type of schooling provided for by employability arrangements can also be hampered by the funding of these arrangements in the so-called O&O funds.

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Employability: lack of clarity, lack of protection Table 5.3: Share (in percentage) of schooling arrangements in Dutch collective agreements, 1997–2007

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Some sort of schooling arrangement present 92.0 96.2 99.2

Job-specific schooling arrangements

General schooling arrangements

Sample size of collective agreements

87.0 91.4 95.4

21.0 21.9 19.2

82.2 96.8 99.2 100.0 99.2 97.6 97.5

80.1 95.2 99.2 97.5 96.0 94.3 94.3

17.8 20.0 20.5 19.2 19.2 18.7 18.9

100 105 130 0 146 125 122 121 125 123 122

Source: Najaarsakkoorden, 1997–2007.

Table 5.4 Share (in percentage) of employability coverage in Dutch collective agreements, 1995–2003 Year 1995 1996 1997 1998 1999 2000 2001 2002 2003

No employability arrangement 94.3 96.1 96.6 93.1 90.1 81.9 73.4 70.4 68.6

Employability arrangement

Total

5.7 3.9 3.4 6.9 9.9 18.1 26.6 29.6 31.4

100 100 100 100 100 100 100 100 100

Source: FNV-CAO database Ducadam, 1995–2003.

‘If you decide to start an O&O fund, then that agreement is guaranteed in the collective agreement. Collective bargaining parties determine with each other: we want to provide schooling policy with some incentive. So that means for one of those three purposes […]: on-thejob training and re-training, the training of regular students, and the training of individuals looking for work; then there’s another important function, namely taking care of inflow policy. How do we ensure that enough people come to work in the sector?’ (I24, former employers’ organisation representative) 129

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While it is often assumed that the O&O funds available within a sector are ‘bottomless pits of money’ (interview fragments I26, I51, 2009) that can be used to facilitate employability, particularly intersectoral mobility, the institutional structure of O&O funds hinders any such development. They are, by definition, intended for sector-specific education and development. Even if the actors involved were inclined to focus on more career-oriented schooling, rather than job-specific training, it is highly unlikely that an O&O fund would be used to finance training or schooling that would be put to use outside the sector. ‘You would really need to start making agreements between O&O funds. That is a policy line that we have had for about five years now, and that is still a very difficult process, also because our members think it’s difficult – because the collective bargaining negotiator in one sector, and the collective bargaining negotiator in the other, they both think – “yeah, but that’s our money.”’ (I3, former trade union representative) The fact that employers and trade unions have been able to focus on their own interest in employability has facilitated the expansion of employability arrangements in collective bargaining. The creation of more expansive arrangements, such as intersectoral employability arrangements, is constrained by the institutional collective bargaining structure. It should be noted, however, that while the data point to an impressive increase in employability arrangements in collective bargaining, these data could also be an underrepresentation of employability arrangements. Institutionalised forms of education and training as well as training money set up in O&O funds are not always visible in collective bargaining. On the other hand, the data show a possible overrepresentation of employability protection, because in some instances employability arrangements can be little more than window dressing. In fact, this latter interpretation is one taken by some officials holding key positions in the field of Dutch labour relations.This pessimism is understandable given the difficult implementation of employability arrangements. Collective labour agreements are instruments only – they create a framework for cooperation, or a set of opportunities. The implementation of collective arrangements depends heavily on the firm. Moreover, a path-dependency mechanism can make the implementation of employability arrangements difficult. Bonoli (2007) has argued that due to the timing of post-industrialisation, most European welfare states are unable to respond adequately to new social risks – they are constrained by path-dependent institutions due to the sequencing or timing of certain events. In Chapter Two, this idea was extended to industrial relations, positing that the process of decentralisation towards industry-wide and company-level bargaining throughout the 1970s and 1980s has led to patterns of differentiation and customisation in collective bargaining (Nagelkerke and De Nijs, 2003). The institutionalisation of differentiation and customisation means that now, more than ever, collective agreements are instruments of secondary 130

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labour conditions – they create a framework and implementation of this framework is dependent upon further action by employers and/or employees, which can be difficult. On the one hand, differentiation and customisation create an assumption that employees will take individual steps towards using the employability arrangements available to them within collective bargaining, an untenable assumption for many employees. On the other hand, implementation difficulties arise because differentiation and customisation in collective bargaining create a dependence on HRM policy and line managers for implementing clauses agreed upon in collective labour agreements. ‘You might be assuming that if it’s in the collective agreement, then it’s successful or it works. Employability policy, or employability and instruments to improve it, that doesn’t have to be things you take care of in collective agreements. […] A collective labour agreement is really there to facilitate and of course, to set the value of exchange – in terms of individual budgets, their amounts, or the number of days available to an employee for job-specific or general schooling. But it’s definitely not a suitable instrument, the collective labour agreement, to put down on paper precisely what the obligations are and what has to happen etc. In contrast, that should be left to customisation [within the firm, MY].’ (I35, employers’ organisation representative) The differentiation of collective bargaining and push for customisation can also create a difference in implementation between large companies and small and medium enterprises. In comparison to smaller companies, large companies often have more money, time and manpower to carry out various employability policies, from individual training budgets to individual career guidance meetings with employees. Small and medium enterprises, on the other hand, often lack the time, money and manpower needed to effectively implement employability in the workplace (interview fragment I24, 2009). Implementation is also dependent upon the employee, and not all employees are excited by the prospect of continued schooling or training. As one employer explains, ‘It’s a completely theoretical exercise. We have everything. In my old job I always said: it’s forbidden to develop ‘any’ instrument. We really have everything. If you can imagine it, we have it.’ ‘What are some examples?’ [MY] ‘Just think of it. We have it all. We have career scans, we have health scans, we have career guidance, we have evening classes, we have training sessions…really, just name it. That’s not the problem. People don’t do it.That’s an issue and it’s an issue we can’t figure out. All these 131

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instruments […] the problem is not the instruments. If that was the problem then I would fix it straight away because that is the simplest part – putting together an instrument. But how do we convince people to use them?’ (I16, former collective bargaining manager in the transportation sector) Another employers’ organisation representative explained it by asking,“How many people are really just jumping to go back to school? It’s rather disappointing” (interview fragment I36, 2009). Employees’ lack of enthusiasm for employability was linked by policy makers not only to certain groups’ disdain of traditional schooling, but also to the implied association between employability and an impending reorganisation within the firm or dismissal. Or as one interviewee put it, “A large number of employees just want stability” (interview fragment I31, 2009). The dynamic associated with employability, the perceived mobility to move from job to job, is not equally attractive to all. The implementation of employability arrangements is not only dependent upon whether the line manager creates possibilities for it or whether an employee takes the initiative – employability is simply not always a priority within a given industry. ‘There’s a lot happening on paper. If you look at what’s actually happening in practice, then it’s disappointing. And if we confront the collective bargaining managers with it, […] Then they often say, “Yes, well, you know at this moment this or that is more important, the pension funds are of course more important.” Purchasing power, employment security, these are all things that are more important… and so every two years there’s some other issue that is more important, that takes up the collective bargaining manager’s time.’ (I3, former trade union representative) In essence, without a tradition of schooling – without an institutional context that supports employability – it simply does not translate well from theory into practice. In contrast, in sectors where education and on-the-job training are necessary and/or institutionalised, employees regularly receive schooling and education as part of their employment. Examples of this can be found in the health care sector, the restaurant/hotel industry, the metal sector and in construction (interview fragment I3, 2009). Concluding this section, then, there has been a large increase in the coverage of employability through collective bargaining.The majority of this coverage entails job-specific training but arrangements focused on general schooling or training are also on the rise. At the same time, implementation of these employability arrangements is not uniform, begging the question whether employability arrangements found in collective bargaining actually provide protection for insufficient employability or whether this is, as many policy makers felt, simply window dressing. The increase in collective bargaining coverage is driven by 132

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employers and trade unions being self-interested but also being able to find common ground, as the employer focus on flexibility and mobility does not necessarily impede the trade unions’ focus on employee empowerment. The lack of implementation can be attributed to path-dependent differentiation and customisation in collective bargaining, which leaves much of the implementation of arrangements in the hands of line managers and individual employees. In addition, in both cases actors are constrained in the broader sense by the institutional make-up of Dutch collective bargaining, with a focus on sectorspecific educational traditions and financing.

Conclusions This chapter looked at how employability is perceived and managed within the Dutch welfare state and industrial relations. This ‘new’ social risk of insufficient employability is perceived to be an individual risk because the concept is very broad – employability is related not only to the risk of unemployment but also to labour market mobility, labour market re-entry and more. Diffuse groups of people are affected by insufficient employability, including lower-educated workers, older workers, younger workers, women returning to the labour market following a period of care giving, and more. Insufficient employability is perceived to be an individual risk because it is not viewed as being beyond an individual’s control, as is the case with disability. Nor is there a clear relationship, real or perceived, between improved employability and improved labour market participation, as is the case with childcare. It is difficult to demonstrate that if an individual follows a training that this individual now has X times better chance at moving from job-to-job or remaining in employment, for example. While some studies show a positive effect of training on employment outcomes – through employment levels or individual earnings, for example (Dahl and Lorentzen, 2005) others suggest that the benefits of employability policies are sometimes exaggerated (Peck and Theodore, 2000). As a result, improving employability is seen to be the responsibility of individuals and employers in the Netherlands. Four major developments in employability policy can be observed: the remarkable acceptance and diffusion of the employability concept, substantial state involvement, a lack of collective coverage in the welfare state and an increase in collective bargaining coverage for employability. Each of these developments can be traced to the perception of a lack of employability as an individual risk, for which individuals and employers are primarily responsible. The initial diffusion and acceptance of the employability concept is driven by an actor orientation mechanism. In contrast to childcare, however, no common or shared perspective developed. Rather, trade unions, employers and the state each created their own working definition of employability, which helped the employability concept take root in the Netherlands.Actors could follow their own definition of employability, ranging from employee empowerment (trade unions) to flexibility and adaptability

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(employers) to life-long learning (the state) and work together within existing institutional structures to create some protection for this risk. That the state does not involve itself in providing collective protection for a lack of employability but limits itself to the role of facilitator is understood by looking at institutional mechanisms of a deadweight effect, path dependency and corporatism. Regulated self-regulation by the social partners was once again the preferred solution for dealing with a new social risk, given path-dependent positive feedback effects. Employers and trade unions have accepted the responsibility of dealing with this social risk in collective bargaining, evidence of a corporatist political exchange – making state financial involvement unnecessary because of a deadweight effect. Hindered by the existing division of responsibility between initial and post-initial schooling, there is no reason for the state to get involved financially in a policy area that can be self-regulated by the social partners. But this deadweight effect has not precluded the state from becoming significantly involved in employability policy as a facilitator, encouraging continued growth of employability policy in collective bargaining. In the past five years, the state’s role in employability policy has become more explicit, with the state facilitating employability through regional cooperative networks, for example. Since the economic crisis, however, the state has become explicitly involved financially, albeit temporarily. This increased involvement is affecting internal barriers to change, and could lead to gradual institutional change in the long run. Primarily though, employability protection has been developed through collective bargaining. Driven by their own self-interest, employers and trade unions have worked to increase the number of employability arrangements in collective labour agreements. Both job-specific and general training arrangements are on the rise in collective bargaining, offering individuals the opportunity to increase their employability.Yet while there has been significant growth in the collective protection of this risk in collective bargaining, this growth can be questioned due to partial implementation. Moreover, some individuals are reluctant to take part in schooling or training given poor past experiences with schooling or a fear of increased employability leading to their dismissal. These developments, as was the case with disability and childcare, are well explained by an actor-centred institutionalist approach.The management of social risks within the welfare state can be traced back to the perceptions the state and the social partners have of these risks. These perceptions, in turn, are driven by different interests and actor orientations, existing within the Dutch corporatist institutional structure. The interaction of actors and their interests within this institutional context shows once again that actors are capable of managing ‘new’ social risks within the welfare state, but that given the perception of insufficient employability as an individual risk, the management of this risk takes place within collective bargaining rather than the welfare state. In this case, corporatist institutions offer the flexibility to create social risk protection rather than creating a collective welfare state arrangement. Driven by a process of continued flexibilisation of the labour market, the corporatist bargaining structures in place 134

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allowed trade unions and employers to coordinate and focus simultaneously on employee empowerment or security and increased flexibility and adaptability. In this manner, the corporatist welfare state has facilitated protection of a new social risk without the creation of a public collective response. Yet there seems to be a limit to what can be achieved through collective bargaining, even with the facilitation of employability policy by the state. The solution, at least in the eyes of many policy makers, is to create a system of schooling rights and obligations, in which employees have a right to employability and employers have an obligation to provide it. In essence, the solution is to set up employability regulations within the law. As a consequence, employees would have an obligation to participate in schooling and training – if employees do not take part in available training, employers’ rights to dismiss employees would be strengthened. In turn, if training is not made available to employees, their rights within a dismissal process would be strengthened. Whether this system will be implemented and what that means for the protection of the employability risk is discussed in the final, concluding chapter. Notes   The Dutch often use the term inzetbaar to describe employability.The literal translation of inzetbaar is to be employable (Van Dale, 2006). An alternative translation is ‘usable’.The terms usable/available are used here to describe the intention of the word. 1

  Employability is also discussed at the European level as part of the European Employment Strategy (EES). 2

 Another example of employability policy, based on the functional state imperative, actually predates the introduction of the employability concept. The Dutch government funds professional schools and universities based on the number of students and diplomas granted, regardless of students’ ages. This practice has proven to be an incentive for educational institutions to offer part-time programmes. Employers can support employees who are taking part in these programmes by allocating some paid time for study or by helping to cover study costs. This is a way to obtain non-job-specific training relatively inexpensively. The bulk of the cost is taken care of by the state. 3

  The duration of this arrangement is dependent upon firms and the coverage they request (the percentage of working hours reduction and the number of employees covered). 4

 O&O funds are sector-level educational and development funds (Opleidings- en ontwikkelingsfondsen) that are created in collective bargaining agreements to finance schooling and training. 5

  Based on differences in the means. Also, no significant differences are found in these opinions between groups of employees who are covered by a collective labour agreement and employees who are not. For each statement, the results are: (1) F (3 DF) = 1.324; p=0.27; n=1188; (2) F (3 DF) = 0.311; p=0.82; n=1188; (3) F (3 DF) = 0.822; p=0.48; n=1188; (4) F (3 DF) = 2.927; p=0.03; n=1188. Although there is a small, significant 6

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Transforming the Dutch welfare state difference found for the last statement, this difference is not attributable to the difference between individuals covered by a collective labour agreement and those who are not, but to a higher score for the group who responded ‘don’t know’ when asked if they were covered by a collective labour agreement.

References Bonoli, G. (2007) ‘Time Matters: Postindustrialization, New Social Risks, and Welfare State Adaptation in Advanced Industrial Democracies’, Comparative Political Studies, 40 (5): 495–520. Brouwer, P., M.H.H. van Lin en W.S. Zwinkels (2001) Inzetten op Inzetbaarheid. Employability in Organisaties, Tilburg: OSA. CPB (1999) ‘Macro Economische Verkenningen. Speciale onderwerpen: employability’, Den Haag: Central Planning Office. Dahl, E. and Lorentzen,T. (2005) ‘What Works for Whom? An Analysis of Active Labour Market Programmes in Norway’, International Journal of Social Welfare, 14 (2): 86–98. De Grip, A. (2001) ‘Dynamiek op de arbeidsmarkt en de employability van werkenden’, Tijdschrift voor Arbeidsvraagstukken, 17 (3): 213–21. De Grip, A., van Loo, J. and Sanders, J. (1999) ‘Employability in Nederland’, Economisch Statistische Berichten, 84 (4189): 116–120. Dryzek, J. S. (1996) ‘Political Inclusion and the Dynamics of Democratization’, American Political Science Review, 90 (3): 475–87. Elchardus, M., Marx, I. and Pelleriaux, K. (2003) De nieuwe sociale kwestie: begripsverduidelijking en hypothesevorming, in B. Cantillon (ed.) De Nieuwe Sociale Kwesties, pp 11–30. Antwerp: Garant. Esping-Andersen, G. (2000) ‘A Welfare State for the 21st Century.Ageing societies, knowledge-based economies and the sustainability of European welfare states’, Background report for the Lisbon Summit, EU. Gaspersz, J. and Ott, M. (1996) Management van Employability: Nieuwe Kansen in Arbeidsrelaties, Assen:Van Gorcum. Gazier, B. (2001) Employability – The Complexity of a Policy Notion, in P. Weinert, Baukens, M., Bollerot, P., Pineschi-Gapenne, M. and Walwei, U. (eds) Employability: From Theory to Practice, pp 3–23. Somerset, NL: Transaction Publishers. Ghoshal, S., Bartlett, C. and Moran, P. (1999) ‘A new manifesto for management’, Sloan Management Review, 40: 9–20. Giddens, A. (1999) ‘Risk and Responsibility’, Modern Law Review, 62 (1): 1–10. Gilbert, N. (2005) ‘The “Enabling State?” From Public to Private Responsibility for Social Protection: Pathways and Pitfalls’, OECD Social, Employment and Migration Working Papers, Paris: OECD. Hacker, J. S. (2004) ‘Privatizing Risk without Privatizing the Welfare State: The Hidden Politics of Social Policy Retrenchment in the United States’, American Political Science Review, 98 (2): 243–60.

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Hemerijck, A. (1996) Corporatist immobility in the Netherlands, in C. Crouch and F. Traxler (eds) Organized Industrial Relations in Europe: What Future?, pp 183–226. Avebury: Aldershot. Herriot, P. a. P., C. (1996) ‘Contracting Careers’, Human Relations, 49: 757–90. Hudson, J. and Kühner, S. (2009) ‘Towards productive welfare? A comparative analysis of 23 OECD countries’, Journal of European Social Policy, 19 (1): 34–46. Kanter, R. M. (1989) ‘The new managerial work’, Harvard Business Review, 67 (6): 85–92. Kanter, R. M. (1991) ‘Globalism/Localism: A New Human Resources Agenda’, Harvard Business Review, 69 (2): 9–10. Kanter, R. M. (1993) Men and Women of the Corporation, New York: Basic Books. Kok, W. (2004) ‘Facing the Challenge: the Lisbon Strategy for Growth and Employment. Report from the High Level Group chaired by Wim Kok’, Brussels: European Union. Luken, T. (2002) ‘Employability, wat beweegt de werknemer? Rapportage deel 1’, Amsterdam: Luken Loopbaan Consult. Meijnen, J. (1993) ‘ “Ik repareer carrières voor mijn professie”;Vertrekbemiddeling is geen nieuw verschijnsel, maar personeelszaken maakt er steeds vaker gebruik van’, Rotterdam: De Persgroep Nederland. Mes, H. (1995) ‘Employability als nieuw medicijn’, Bedrijfskundig Vakblad, 7: 26–29. MinAZ (2002) ‘Regeerakkoord (Coalition Agreement)’, Den Haag: Ministerie van Algemene Zaken. MinAZ (2007) ‘Regeerakkoord (Coalition Accord)’, Den Haag: Ministerie van Algemene Zaken. MinSZW (2009) ‘Omscholingssubsidie van maximaal 2500 euro’, Den Haag: Ministry of Social Affairs and Employment. Nagelkerke, A. G. and De Nijs, W. F. (eds) (2003) Sturen in het Laagland, Delft: Eburon. Peck, J. and Theodore, N. (2000) ‘Beyond “employability’’’, Cambridge Journal of Economics, 24 (6): 729–49. Pierson, P. (1994) Dismantling the Welfare State?: Reagan, Thatcher, and the Politics of Retrenchment, Cambridge, UK and New York: Cambridge University Press. Pierson, P. (2001) The New Politics of the Welfare State, Oxford and New York: Oxford University Press. Pruijt, H. (2007) ‘The Sustainable Management of Working Life. Employability policy and software development work’, ISA Research Committee RC26, Lesvos, Greece: ISA. Pruijt, H. and Derogee, P. (2010) ‘Employability and job security, friends or foes? The paradoxical reception of employacurity in the Netherlands’, Socio-Economic Review, 8 (3): 437–60. Rojer, M. (1996) Cao-onderhandelingen: Een Voorspelbaar, Rationeel en Logisch Proces? Amsterdam: University of Amsterdam. Scharpf, F. (1997) Games Real Actors Play: Actor-Centred Institutionalism in Policy Research, Boulder: Westview Press. 137

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SER (1998) ‘Sociaal-Economisch Beleid 1998–2002’, Den Haag: Social and Economic Council. SER (2002) ‘Het Nieuwe Leren’, Den Haag: Social and Economic Council. SER (2005) ‘Actieplan Levenlang Leren’, Den Haag: Social and Economic Council. Soskice, D. (1991) The institutional infrastructure for international competitiveness: A comparative analysis of the UK and Germany, in A.B. Atkinson and Brunetta R. (eds) The Economics of the New Europe, pp 45–66. London: Macmillan. StAr (1996a) ‘Flexibiliteit en Zekerheid’, Den Haag: Labour Foundation. StAr (1996b) ‘ Werken aan je ‘werkkring’. Het belang van scholing en opleiding voor sector, bedrijf en werknemer’, Den Haag: Labour Foundation. StAr (1999) ‘Najaarsakkoord’, Den Haag: Labour Foundation. Van Hoof, J. (1996) ‘Organisatievernieuwing en scholingsdilemma’s’, Tijdschrift voor Arbeidsvraagstukken, 12 (4): 294–95. WRR (2007) ‘Investeren in Werkzekerheid’, Amsterdam: Amsterdam University Press. Yerkes, M. and Tijdens, K. (2010) ‘Social risk protection in collective agreements: Evidence from the Netherlands’, European Journal of Industrial Relations, 16 (4): 369–83.

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Transforming the Dutch welfare state This book has taken an in-depth look at social risk protection within the Dutch corporatist welfare state. The approach of this volume differs from previous studies because it has addressed the question of risk perception, relating risk perception to risk management within one welfare state. Consequently, this study has investigated within-country differences across different types of social risks, explaining changing risk perceptions and welfare state responses to different social risks. It has been assumed, in particular, that ‘new’ social risks are less likely to be treated as collective social risks in the modern welfare state as these same welfare states struggle to reform or retrench the collective protection of ‘old’ social risks. The question of why certain social risks are dealt with collectively and other social risks are not and how these perceptions change across time remained unanswered. Yet the issue of collective versus individual responsibility for social risks lies at the heart of the debate in modern welfare states. This study has analysed how both old and new social risks are perceived within the welfare state, demonstrating how these perceptions lead to variation in risk protection across different risk forms, thereby addressing the core of the debate regarding modern divisions of welfare responsibility. In doing so, it demonstrates the relative unique capacity of the Dutch welfare state to address changing and emerging social risks. This final chapter considers the implications of these findings for our understanding of old and new social risks, how they are analysed and the ability of modern welfare states to manage these risks. The findings presented in this book challenge ideas put forth in previous welfare state studies, for example, those that assume that new social risk protection is difficult to create given path dependent institutions or financial constraints related to the timing of post-industrialisation (Bonoli, 2007). Moreover, the findings show that collective protection for social risks varies – not because of the distinction between ‘old’ and ‘new’ social risks, but because the perceptions of social risks vary. Within the Dutch welfare state, social risk policies have varied from a decollectivisation of an old social risk, the semicollectivisation of a new social risk to a continued absence of collective welfare state protection for a new social risk. These differentiated policies are attributable to the perceptions of risk and perceived responsibility for these risks within the Dutch institutional context.This approach to risk protection is facilitated by the corporatist institutions evident in the Netherlands.The interaction between welfare state protection and protection offered by collective bargaining effectively offers two types of collective protection: public welfare and occupational welfare. For example, despite the decollectivisation 139

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of disability and sickness benefits in the welfare state, a recollectivisation has taken place within collective bargaining.Also, the semicollectivisation of childcare in the welfare state was preceded by a collectivisation process within collective bargaining. And while insufficient employability is not protected for collectively within the welfare state, significant collective coverage has developed in collective agreements. To understand these processes of social risk protection, this study looked at the most important developments in three cases of social risks: sickness and disability, childcare and insufficient employability. Recalling the case of disability and sickness protection, the study shows that protection was significantly decollectivised in the Netherlands, shifting from a passive, full income support scheme in the public sphere to a selective form of public benefits, with supplemental coverage offered in collective labour agreements. This shift is attributable to an overall reduction in collective welfare state protection, an increase in employer responsibility, an increase in compensation through collective bargaining, a shift in the administration of benefits towards the public sector and an increase in individual responsibility. These developments took place within the context of the disability (WAO) crisis, which helped shape the reform of this ‘old’ social risk. The development of childcare policy is opposite to disability and sickness protection. Childcare, a risk previously perceived to be an individual or familybased responsibility, was developing within collective bargaining but became a collective action and public interest issue because of the dominant perception among all actors that a lack of childcare was a barrier to women’s employment. Driven by exogenous and endogenous processes of flexibilisation, demographic changes and Europeanisation, policy makers, politicians and the social partners related childcare to women’s employment and worked to create solutions, first within existing collective bargaining institutions and later by expanding the welfare state. Initially, regulated self-regulation by the social partners was the preferred solution for this new policy area and in turn, the social partners relied on existing collective bargaining structures to address childcare. The increased attention for women’s labour market participation, however, created a collective action and redistribution problem.The social partners were unable to obtain the required 90% of childcare coverage in collective agreements demanded by the state, which was seen as a failure of self-regulation and led to state intervention and the semicollectivisation of childcare protection in the welfare state. Comparing this analysis to that of disability and sickness protection, it is evident that the collective protection of ‘old’ social risks does not exclude the possibility of collective protection developing for ‘new’ social risks. Lastly, the case of employability was presented, showing how social risk protection can vary yet again, with the continued avoidance of collective risk protection within the welfare state but significant protection within collective bargaining. The fact that the welfare state is expanded to cover the new social risk of childcare while this does not happen for insufficient employability is because insufficient employability is perceived to be an individual risk best mediated through collective agreements. Employability is a broad concept, with 140

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varying definitions representing different interests, affecting diverse groups of individuals. Insufficient employability is in reality a representation of numerous social risks, such as unemployment and decreased job mobility. But insufficient employability is not perceived to be beyond individual control in most cases and it is not perceived that an improvement in employability will lead directly to a clear increase in labour market participation.These perceptions of employability have resulted in the continued avoidance of collective welfare state protection and a preference for social partner self-regulation through collective bargaining.

The flexibility of corporatist institutions What explains the successful Dutch response to changing and newly emerging social risks? As noted in Chapter One, in the mid-to-late 1990s, the Netherlands was heralded internationally for the success of its so-called ‘polder’ model. Concertation between the social partners and the state was credited for the impressive economic performance of the Netherlands, including low unemployment and striking job growth, earning the Netherlands the title of a ‘Dutch miracle’ (Visser and Hemerijck, 1997). In essence, the flexibility of Dutch corporatist institutions facilitated the successful functioning of the labour market and the economy. Although not without its problems, the particular Dutch version of corporatism, with highly organised interaction between the state and centrally organised collective actors – the social partners – seems to have succeeded once again, this time in facilitating a welfare state response to changing and newly emerging social risks. In this regard, the particularly intensive and highly cooperative form of corporatism in the Netherlands offers a flexible means of achieving agreement on social risk protection, with an interaction between collective protection in the welfare state and protection offered in collective agreements.This Dutch form of corporatism, so successful in responding to changing and emerging social risks, differs from other corporatist responses to social risks (see, for example, TaylorGooby, 2004). In general, conservative European welfare states have demonstrated an inability to respond to new social risks (Bonoli, 2006). Conservative corporatist welfare states, in particular, score poorly because ‘the established compromises between social partners and government privilege the interests of core workers, and assumptions about gender roles delay the development of collective provision’ (Taylor-Gooby, 2004: 23). In contrast, in the Netherlands, intensive consultation between the social partners and the state has facilitated responses to social risks that do not always privilege the interests of core workers, as childcare protection has shown. The established compromises between trade unions and employers did not preclude the social partners from creating significant childcare arrangements in collective bargaining prior to the inclusion of semicollective childcare protection in the welfare state. Moreover, in the Netherlands, the continued political exchange between the social partners and the state has been affected by the state taking a stronger role in the political exchange. A stronger state role in the political 141

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exchange is considered characteristic of modern corporatism (Siegel, 2005), and in the Netherlands this stronger role of the state has led to the collective welfare state protection of a new social risk. The well-structured concertation between the social partners and the state has also enabled a political exchange between actors and has facilitated a politics of blame avoidance in welfare state reform. This exchange is arguably less unique because the presence of blame avoidance in welfare state reforms is common across all welfare states, not just corporatist ones (Pierson, 2001). It is true that the social partners provide an interesting partner in blame avoidance, but again, this is not unique to the Netherlands and can be found in many corporatist and some non-corporatist countries as well (Baccaro and Simoni, 2008;Visser, 2007). The difference in the Netherlands is the Dutch tradition of consensus-building among political, economic and social actors.Whether working in pursuit of their own interests, as in the case of employability, or in pursuit of a common interest, as in the case of childcare, actors are willing to seek compromise and find common ground, thereby succeeding in creating social risk protection within the welfare state and collective bargaining. The ability of the Dutch welfare state to address changing and newly emerging social risks points to the importance of understanding the role of collective bargaining institutions in welfare provision. There is a clear interaction between public welfare in the welfare state and occupational welfare in collective bargaining (seeYerkes and Tijdens, 2010). Occupational welfare that compensates for a decline in or lack of welfare provision could mean a changing role for trade unions.The decline of trade unions following welfare state expansion during the late 1970s and into the 1980s placed pressure on the role and legitimacy of trade unions throughout Western welfare states (Ebbinghaus and Visser, 1999). With evergrowing pressures to cut back welfare programmes and the difficulties many welfare states face in creating risk protection for ‘new’ social risks, trade unions, together with employers, could take up an increasingly important role in welfare provision through collective bargaining. The findings presented in this study challenge existing studies of risk protection within the welfare state as well.Welfare states are often analysed in terms of welfare regimes based on a triangle of welfare provision: the state, market and individuals (Esping-Andersen, 1990; 1999). More recently, there has been an increased emphasis on the role of other actors, including employers (Hacker, 2004) trade unions (Trampusch, 2007) and NGOs (Lacey and Ilcan, 2006) in welfare provision. This study confirms and expands the findings of these more recent studies, demonstrating the importance of collective agreements in welfare provision, in particular the interaction between the welfare state and collective bargaining. In contemporary studies of the welfare state, particularly those focused on reform or retrenchment, little attention is given to collective bargaining or other forms of protection outside the welfare state and the possibility of compensating for cuts in public welfare. Once the interaction between occupational and public welfare is taken into account, the assumption that the welfare state is unable to 142

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respond to new social risks cannot be maintained. Collective agreements provide various forms of coverage, even when the welfare state does not. Hence, a decline in welfare state coverage does not always mean a shift towards a more liberalised welfare state, in the style of Anglo-American welfare states. Future research would be well-directed to focus on the interaction between public and occupational welfare and any general or country-specific mixes of welfare arrangements this interaction may create.

Understanding social risk protection in the welfare state The intention of this analysis has been, in part, to look inside the black box of social risk protection, to better understand which social mechanisms explain how risks are perceived and managed within the welfare state. Processes of flexibilisation and post-industrialisation have changed and continue to change the structure of contemporary labour markets and families, creating a broader spectrum of social risks in the modern welfare state. On the one hand, welfare states are, to varying degrees, increasingly faced with an ageing population, in some cases declining fertility rates as well as rising healthcare and pension costs. On the other hand, demographic changes, changes in family structures (Crompton, 2006; Esping-Andersen, 2009) and changes to employment have considerably altered the life cycle of individuals, the risks they face and the ways in which states and organisations can help individuals negotiate these risks. As the current economic recession abates, these issues are likely to become even more pronounced. Cross-national studies have revealed that welfare states respond differently to these changing social risks, true to what we would expect given variation in welfare regimes (Esping-Andersen, 1990). While much attention has been paid to the various policy approaches to new and old social risks across welfare states, there has been considerably less attention for the theoretical perspective. Two influential studies in this regard are Bonoli’s study of the timing of new social risks (Bonoli, 2007) and Taylor-Gooby’s study of the challenges new social risks pose for welfare states (Taylor-Gooby, 2004). Both of these studies have informed the theoretical debate on social risks and welfare state responses in this quickly developing area, but each attributes the management of new social risks to different factors. On the one hand, the assumption is that welfare states will be unable to address new social risks due to the timing of post-industrialisation (Bonoli, 2007). Welfare states will be unable to expand in response to new social risks while simultaneously reforming or retrenching old social risk policies. On the other hand, there is an assumption that while welfare states may be able to develop policy responses to new social risks, the size of the groups affected by new social risks will limit the reach of these policies, with social policy primarily being applied to smaller groups of citizens and with fewer overall expenditures on new social risks (Taylor-Gooby, 2004). A further contribution to the theoretical approach of social risk protection in welfare states is the renewed interest in power resources theory developed by Korpi (1983) in the early 1980s. Based on the 143

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idea that individuals who amass enough power can influence policy outcomes, power resources theory was particularly prevalent in political explanations of welfare state expansion. In contemporary analyses, it is assumed that individuals and groups affected by new social risks are less capable of mobilising themselves to affect welfare state policy, leading to an absence in new social risk protection (see, for example, Kananen et al, 2006; Kitschelt and Rehm, 2006). These explanations have certainly informed our understanding of social risk protection in modern welfare states. Their focus on comparative welfare state analyses shows that welfare states vary in their ability to address new social risks, that this difficulty arises not only because welfare states face serious pressures for reform but because the groups affected by new social risks differ. Groups more affected by new social risks, such as women, migrants and low-educated individuals have more varied preferences and more difficulty mobilising and hence have less power to demand or realise new social risk protection. But the Dutch case challenges or modifies all three of these viewpoints: risk protection is not dependent upon the timing of post-industrialisation, nor is it dependent upon the power resources of the groups affected, nor is it always dependent upon the size of the group affected.

The timing of new social risks Bonoli (2006) makes an interesting claim about new social risks: that traditional theories or variables used to explain welfare state expansion are also valid for explaining new social risk protection, just in a different configuration.‘Old’ politics, power resources and institutional mechanisms can explain the policy responses to new social risks but are configured differently across welfare regimes. Each of these variables is shaped by processes of post-industrialisation and welfare state reform, and the timing of these processes is what determines whether welfare states are able to respond to new social risks or not (Bonoli, 2007).The evidence reviewed here supports the idea that mechanisms previously used to explain welfare state expansion are still salient in explaining new social risk protection but in different configurations. But the evidence does not support the idea that the ability of the Dutch welfare state to respond to new social risks is dependent upon the timing of processes such as post-industrialisation. If that were the case, variation in new social risk protection would not be evident.The Dutch welfare state faces pressure to reform, as do many other welfare states, and this pressure was evident during a period in which one new social risk became partially collectivised and one did not.While simultaneously reforming other welfare state policies, including disability and sickness policy, the Dutch welfare state expanded to offer semicollective protection of childcare. The explanation for this variation in new social risk protection is not found in mechanisms of old politics or in the power resources of the groups affected.The reason childcare receives collective protection while insufficient employability does not is because inadequate childcare is perceived to be a barrier to women’s 144

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employment. Daguerre (2006: 225) finds similar developments in Britain and Switzerland, whereby ‘the need for female labour in the context of a booming service economy opened a policy window for British and Swiss childcare advocates’. In contrast to Daguerre’s conclusions, however, the Dutch case goes beyond the shared policy goal of employers and coalitions of childcare advocates, such as trade unions. In the Netherlands, the welfare state explicitly becomes involved in childcare protection. The perception that childcare is a barrier to women’s employment is shared by political, social and economic actors, creating a common actor perspective. This mechanism creates opportunities for actors to affect change within existing institutions, even by expanding welfare state policies. Insufficient employability, in contrast, is not perceived to be a barrier to employment by all actors and is therefore not provided collective protection within the welfare state. As it stands, employability policy succeeds in collective bargaining in the Netherlands precisely because separate constellations of actors can maintain their own definition of employability; these varying definitions represent the self interests of each group.As a result, no common actor perspective develops and collective protection within the welfare state remains absent. The idea that welfare state responses vary across policies is not new. In his study of the politics of welfare state reform, Pierson (1996) finds support for the idea that variation within welfare states is likely to be greater than the variation between welfare states in terms of reform. This variation is also evident in the Dutch response to new social risks. Given the pressures welfare states face to reform, similar developments can be expected in welfare states outside the Netherlands. If a common perspective develops among various actors because social risks are seen to create a barrier to employment for specific groups, these actors consequently have more room to manoeuvre in searching for collective policy responses.

Power resources This study has not looked specifically at the power resources of the groups affected by old and new social risks. However, this research did investigate the political mechanisms behind welfare state policies for evidence of ‘old’ and ‘new’ politics mechanisms, an indicator of power resources. An old politics mechanism representative of class struggles expressed through the distribution of political power cannot explain the reform of existing welfare state policies (Pierson, 1996). The reform of entrenched welfare policies, like sickness and disability, is better explained by a political mechanism of blame avoidance, when political actors will seek out other actors to share the blame of reforming entrenched welfare state policies, in an attempt to avoid electoral consequences. In contrast, in the newly expanded area of childcare policy, the influence of political distributions of power is evident. The preferences of varying political actors have shaped the creation of childcare within the Dutch welfare state and are likely to shape future developments in childcare as well. However, given the lack of collective welfare state protection for a different ‘new’ social risk, insufficient employability, political 145

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preferences are not as influential as other mechanisms in explaining new social risks. Rather, it is likely that political preferences shape only those new social risks collectively managed within the welfare state.Arguably, the question remains whether the preferences of political actors are representative of the groups affected by new social risks.This is unlikely because ‘respondents with diverse attributes of new social risk groups also develop rather diverse political orientations’ (Kitschelt and Rehm, 2006: 77).This means that while political preferences shape the policy responses being developed, that we can question how representative these political preferences are in terms of the groups affected most by these policies (see Raven, 2011, forthcoming).

The size of groups affected by new social risks In his important contribution to the study of new social risks, Taylor-Gooby (2004) posits that policy change, arising from new social risk protection, is legitimated by new approaches to economic policy.The shift away from Keynesian policies and the increased importance attributed to market-driven processes could provide actors with opportunities to respond to new social risks. In Taylor-Gooby’s analysis, new social risk protection is not necessarily limited by the institutional context – selective targeted benefits or market-driven benefits provided for in the private sector could be used to protect against new social risks in the welfare state. The ability of welfare states to create new social risk policies is limited because of the differences between categories of groups affected by old and new social risks, in particular the size of the groups affected. Groups most affected by new social risks are women, individuals lacking relevant skills and younger workers (Taylor-Gooby, 2004: 8). The evidence presented here does not conflict with Taylor-Gooby’s assertion that there are significant differences between groups affected by old and new social risks. Insufficient employability especially demonstrates the diffuse nature of new social risks, affecting a variety of individuals and making it difficult, theoretically at least, to provide protection for individuals affected by a lack of employability. But the evidence does conflict with the assertion that new social risk protection is dependent upon the size of the group affected. As we have seen with childcare, the creation of collective welfare state protection for a new social risk can take place even when a significant group of individuals is affected. The group of individuals eligible for childcare subsidies in the Netherlands is significant and unlikely to decline greatly in the near future.1 Current attempts to cut back on childcare costs in the Dutch welfare state are not solely related to the number of individuals requesting childcare subsidies but are decidedly related to the cost associated with the formalisation of informal care. It is therefore plausible that continued social risk protection for these larger groups will require greater legitimacy efforts, such as demonstrated by the current debate in the Netherlands about relating childcare subsidies to working hours.

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In sum, the protection afforded individuals who face either new or old social risks is not singularly dependent upon the timing of post-industrialisation, the ability of groups to mobilise themselves or the size of the group affected. Rather, two mechanisms delineate social rights in the modern welfare state: workfare and welfare. As explained in Chapter One, the use of the term workfare here is meant to be broader than a neo-liberal context of welfare-to-work programmes or the obligations placed on social assistance recipients. It marks a shift to forms of welfare that emphasise recommodification and activation. In other words, workfare policies are those policies that are intended to transform the welfare state into a social investment state (Giddens, 1998;Taylor-Gooby, 1997).Welfare, in turn, refers to collective, passive, income protection as it was originally intended within the welfare state. Individuals are entitled to receive collective welfare if they are not held responsible for a social risk.Workfare differs from welfare because this form of collective protection is created to improve the employment of targeted groups within the welfare state. This dichotomy of social rights and citizenship has led to gradual institutional change and the transformation of the Dutch welfare state. An important consequence of this discussion is that the dominant analytical distinction made between ‘old’ and ‘new’ social risks remains questionable. This is not to say that the welfare state does not face new challenges arising from continued flexibilisation and globalisation. But the analytical dichotomy between old and new social risks masks the underlying issue of social rights and citizenship – who is perceived to deserve collective protection and in what form. Labour market activation drives policy makers to focus on those groups in society who are seen to be potential contributors to the welfare state through employment. The result is a division of responsibility for social risks along the lines of welfare and workfare. Risks that are seen to be beyond the responsibility of the individual (for example, long-term, fully incapacitating disability) receive collective welfare protection. Risks that are seen to pose a hindrance to labour market participation may also receive collective protection, but in the form of workfare – activating policies and often a combined format of public collective, individual and employer responsibility. In short, the dichotomy is not old versus new social risks, but welfare versus workfare.

Welfare state change The response of the Dutch welfare state to changing and newly emerging social risks has taken place within existing institutions, yet change is evident. In recent years, there has been increased attention in the literature for dynamic, rather than static, approaches to welfare states, in particular focusing on institutional change. Broadly speaking, some approaches focus on substantial institutional change, such as exogenous shocks, while other approaches emphasise both substantial and gradual institutional change. The seminal work by Streeck and Thelen (2005) on this topic, which builds on Hacker (2004), argues in favour of the latter. As discussed in Chapter Two, by ignoring gradual institutional change, 147

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we risk overlooking minor changes that, through a process of change, can lead to substantial institutional change in the long run.The empirical examples presented in this study are, in different ways, examples of the type of gradual institutional change recognised in Streeck and Thelen’s study. The gradual changes and reforms made to disability and sickness policy in the Netherlands demonstrate a combination of what Streeck and Thelen term institutional ‘exhaustion’ and ‘conversion’. On the one hand, ‘institutional exhaustion is a process in which behaviours invoked or allowed under existing rules operate to undermine these’ (Streeck and Thelen, 2005: 29). On the other hand, conversion applies when ‘existing institutions are adapted to serve new goals or fit the interests of new actors’ (Streeck and Thelen, 2005: 26). The evolution of sickness and disability protection in the Netherlands since 1995 is evidence of institutional change, the result of a combination of both institutional exhaustion and conversion. This change in sickness and disability policy is exemplary of more systemic change in the Dutch welfare state, where the focus is now on activating welfare state policies, which differs from previous welfare state policies that focused on passive income protection. While Streeck and Thelen argue that institutional exhaustion is a matter of institutional breakdown rather than institutional change, the process of Dutch sickness and disability reform shows that multiple forms of institutional change can take place within one policy area, and while institutional exhaustion has occurred to some extent, that this has not gone hand in hand with institutional breakdown. Disability policy, conceived at the start of the 20th century and expanded during the golden era of the Dutch welfare state, was intended to provide generous income support during a time of economic prosperity and welfare state boom. With the increase in unemployment and its attractiveness as a risque social rather than a risque professionelle, disability policy undermined itself, a core principle behind institutional exhaustion. But while the institution of disability protection as it was originally intended has changed, it has not disappeared completely; disability is still seen as a risque social and is compensated for collectively within collective bargaining. There is also evidence of institutional conversion, as disability policy has been directed to address new goals – activating and re-integrating ill and disabled workers into the workforce. As Streeck and Thelen (2005: 28) argue, institutional conversion occurs in part due to new opportunities arising across time. ‘Changes in the nature of the challenges actors face or in the balance of power allow for institutions created to serve certain interests to be redirected to very different and even diametrically opposed goals and ends’.The WAO crisis drove the Dutch government to seek new goals, moving away from a passive and generous income replacement scheme by decollectivising protection and increasing selectivity. This development can also be seen in terms of policy learning, ‘[...] a deliberate attempt to adjust the goals or techniques of policy in response to past experience and new information. Learning is indicated when policy changes as the result of such a process’ (Hall, 1993: 278). In this instance, policy learning has brought 148

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about institutional change. Slowly, and together with the social partners, disability and sickness policy was redirected to very different goals – minimised collective protection for a distinct group of individuals, with increased employer and individual responsibility.The social partners, operating within a strong corporatist institutional structure, were obvious partners for blame avoidance and with the removal of their influence in benefit administration, wanted to remain important players in the game.The reduced role for the welfare state left a gap for the social partners to step in, resolving the issue of disability protection within collective bargaining. All in all, these changes in disability and sickness policy point to institutional change along the lines of welfare and workfare – collective welfare directed at either (1) a selective group of individuals, whom are not perceived to be responsible for the risk; or (2) groups of individuals whose labour market participation is assumed to benefit directly from collective risk protection. In both cases, the focus of disability policy is to activate individuals, by increasing or improving their labour market participation. There is now a greater emphasis on preventing sickness and disability, but also on returning to employment as quickly as possible. Even the language has changed – policy makers now speak of occupational ability rather than occupational disability. The case of childcare is also indicative of institutional change. The expansion of the welfare state into childcare policy does not reflect a drastic shift in policy paradigm, a so-called ‘third-order’ change (Hall, 1993). Rather, the shift towards semicollective childcare protection is more nuanced and subtle. In Streeck and Thelen’s terms, what we have seen with childcare is a case of conversion, institutional change that arises as new actors, embracing new ideas and goals, work within existing institutional structures to meet these goals. The return of the Labour party to the political coalition in 2006 and the desire to achieve improved labour market participation (activation) within the existing Dutch welfare state led to a greater focus on childcare as a public interest, classifying it as a collective action and redistribution problem, emphasising the need for state intervention when self-regulation of childcare policy failed. Taken in the context of additional changes in the welfare state, such as those in disability policy, the change in childcare policy is evidence of a systemic shift (Pierson, 1994), whereby a modification of political institutions leads to a decrease in barriers to programmatic change. With the perceived relationship between childcare and women’s employment, the intervention of the state is legitimised. Childcare becomes an explicit means of activating a large proportion of the labour market. The implications of this approach are not always positive, however. First, a focus on childcare as the panacea for women’s employment ignores issues of child wellbeing and child development, issues that are becoming increasingly relevant in countries with more well-developed childcare policies (EspingAndersen, 2009). Moreover, the perceived relationship between childcare and employment has led to a debate on public childcare financing and the financial retrenchment of these subsidies. In particular, there have been attempts to link the use of childcare subsidies to working hours, in an attempt to increase the 149

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legitimacy of increased childcare spending. Various political parties have called for a working hours’ registration system, whereby families are only entitled to a proportion of childcare subsidies in direct relation to the number of hours worked. The reasoning behind this debate is the dramatic increase of childcare costs following the semicollectivisation of childcare in the welfare state, due in part to the formalisation of much informal care.The underlying assumption of a working hours’ registration system is that childcare subsidies will be linked to the hours worked by the mother, which points to an important issue – namely that the focus on women’s employment creates assumptions about gender equality in employment.Women’s overrepresentation in temporary and flexible work forms, such as part-time work (Yerkes, 2009), is disregarded in an attempt to focus on activation. Lewis and Giullari (2005) have critiqued similar approaches focusing on improved female employment within the European Union. While thus implicitly acknowledging the problem of the unequal division of care work in the family that impacts on women’s labour market position, the recommendations of this document [an EU discussion paper issued in 2001, MY] were confined to measures to promote female employment as part of the ‘engine of economic growth’. In the hierarchy of policy goals, adult labour-market participation, primarily as a means of promoting economic growth and competitiveness, comes first. (Lewis and Giullari, 2005: 82) Gender inequalities notwithstanding, in essence,‘the original meaning of activation – individual empowerment – is often reversed; it comes to signify a repressive workfare strategy’ (Schmid, 2009: 242). Schmid’s critique of contemporary activation policies in relation to risk management points to the limitations of activation policies and the need for a continued reassessment of policy goals. At first glance, employability policy seems to differ from disability and childcare policy, suggesting the presence of institutional stability rather than institutional change.The social partners and the state have worked within existing institutional structures to provide an answer to insufficient employability. The recent global financial crisis could, however, lead to institutional change in the long term. Increased financial involvement by the state changes existing political barriers, that is, political opposition to changing the status quo (Hacker, 2004). Currently, employability policy seems to have reached an impasse, in which the social partners and the state look to each other to take increased responsibility. One solution to this impasse, and an issue which has repeatedly come up in employability policy, would be indicative of the broader shift towards welfare and workfare – trading strict dismissal protection for a right to lifelong learning. Under Dutch law, employees are entitled to favourable financial compensation upon termination of their employment contract. The longer an individual has been employed with an organisation, the more financial compensation they receive. By relating employability to dismissal law, a training voucher system would be created, whereby 150

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employees are entitled to schooling and training from their employer. If at some point the employment contract is to be terminated, the courts can determine whether the employer has done enough to optimise the employee’s employability. If not, the employee may be entitled to more generous financial compensation.The flip side of this system is that the court can also decide that an individual employee has not done enough to optimise their own employability, thereby concluding that they do not have a right to dismissal compensation. Although this idea has repeatedly been discussed in different forms, it continues to be conflict-ridden. Discussions developed into an advanced stage in 2004–5, and because of the intended further shift to a knowledge economy and the need for highly educated workers, it seemed likely that the state would contribute a part of the necessary funding. Policy makers experienced this as a kind of revolution in thinking. In the classic welfare state, workers are decommodified and activation is minimal. The new idea is to give people more control over their lives and increase activation – to focus less on welfare and more on workfare and hence recommodification. Eventually, this initiative to link employability to dismissal protection failed because of political resistance. It is unlikely that the conflict surrounding any discussion about employability in terms of dismissal protection will be resolved in the near future, as trade unions are adamant about maintaining dismissal protection. ‘So the whole discussion about dismissal law, for example, which apparently would be an instrument to increase the employability of the working population – but that’s really looking at it from employers’ perspective. That’s something the government is keen to listen to. They’re really working on making it less strict. Well, we say, if you’re going to do that [emphasis in original, MY] then you’re taking away protection from a lot of people who simply can’t carry the individual responsibility.’ (I3, Former trade union representative) This possible future shift in employability policy, which could on the one hand lead to new policy initiatives, could just as easily lead to a stalemate in employability initiatives because of the association with dismissal protection. ‘During the past few years there have been, I think, a number of great moments in which we were able to achieve things politically but also some unpleasant moments. Look, the whole dismissal law discussion: if something like that comes up, that ruins it all again, the whole relationship.You finally think you have an agreement with the cabinet about something and then it suddenly comes back to the table, and then you have to deal with dependability and such.’ (I46b, Former trade union representative) A Dutch union leader states it succinctly: while employability is attractive in theory, a decade of discussions about employability has not brought impressive 151

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results (Kammer, 2007). How employability policy will continue to develop is only speculative, but it seems that even without the development of a collective welfare state policy, employability is developing in the direction of workfare, with a focus on activation and individual responsibility. In sum, each of these cases supports the view that gradual institutional change is important and leads, in the Netherlands, to overall systemic change and the transformation of the welfare state. Welfare state scholars have depicted trends towards activation in other welfare states (Esping-Andersen, 2002; Giddens, 1998; Gilbert, 2005;Taylor-Gooby, 1997) where there is a focus on active labour market policies and welfare-to-work policies (Dahl and Lorentzen, 2005; Dingeldey, 2007). A recent study by Hudson and Kühner (2009) challenges this perspective, suggesting that there is no empirical foundation for the supposed shift to a social investment state. Rather, the authors argue most welfare states maintain a social protection state. The Dutch case demonstrates, however, that it is not a question of either/or – social protection (welfare) and social investment (workfare) co-exist and interact.The actual division and possible interaction of welfare and workfare is likely to differ among welfare states and between welfare regimes. Nordic welfare states are more likely to combine more generous collective benefits with activation elements, whereas liberal welfare states are likely to focus more on few collective benefits and emphasising activation or welfare-to-work programmes. More research is needed to determine whether similar constellations of mechanisms found in the Dutch case, leading to a variety of social risk protection across risk forms, are also evident in other welfare states. All in all, the politics of social risk protection are now shaped by an underlying discussion of social rights and citizenship in the welfare state. Whether this leads to collective social risk protection will depend upon the perceived externality of social risks or the perceived relationship with employment. In the Dutch case, social risk protection, facilitated by corporatist institutions and the active participation of the social partners, has developed along the lines of welfare and workfare, leading to a transformation of the welfare state. Notes   According to statistics from the Netherlands Institute for Social Research (SCP), at least 80% of each successive generation of women born since the 1940s has had children and it is expected that this trend will continue through the generation of women born between 2010 and 2019 (SCP, 2006). 1

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Bonoli, G. (2006) New Social Risks and the Politics of Post-Industrial Social Policies, in K.Armingeon and G. Bonoli (eds) The Politics of Post-Industrial Welfare States: Adapting Post-War Social Policies to New Social Risks, pp 3–26. Oxon and New York: Routledge. Bonoli, G. (2007) ‘Time Matters: Postindustrialization, New Social Risks, and Welfare State Adaptation in Advanced Industrial Democracies’, Comparative Political Studies, 40 (5): 495–520. Crompton, R. (2006) Employment and the Family: The Reconfiguration of Work and Family Life in Contemporary Societies, Cambridge and New York: Cambridge University Press. Daguerre, A. (2006) Childcare Policies in Diverse European Welfare States: Switzerland, Sweden, France and Britain, in K. Armingeon and G. Bonoli (eds) The Politics of Post-Industrial Welfare States:Adapting Post-War Social Policies to New Social Risks, pp 227–47. Oxon and New York: Routledge. Dahl, E. and Lorentzen,T. (2005) ‘What Works for Whom? An Analysis of Active Labour Market Programmes in Norway’, International Journal of Social Welfare, 14 (2): 86–98. Dingeldey, I. (2007) ‘Between workfare and enablement; The different paths to transformation of the welfare state: A comparative analysis of activating labour market policies’, European Journal of Political Research, 46 (6): 823–51. Ebbinghaus, B. and Visser, J. (1999) ‘When Institutions Matter: Union Growth and Decline in Western Europe, 1950–1995’, European Sociological Review, 15 (2): 135–58. Esping-Andersen, G. (1990) The Three Worlds of Welfare Capitalism, Cambridge (UK): Polity Press. Esping-Andersen, G. (1999) Social Foundations of Postindustrial Economies, Oxford: Oxford University Press. Esping-Andersen, G. (2002) Why we Need a New Welfare State, New York: Oxford University Press. Esping-Andersen, G. (2009) The Incomplete Revolution: Adapting to Women’s New Roles, Cambridge: Polity Press. Giddens, A. (1998) The Third Way: The Renewal of Social Democracy, Cambridge: Polity Press. Gilbert, N. (2005) ‘The “Enabling State?” From Public to Private Responsibility for Social Protection: Pathways and Pitfalls’, OECD Social, Employment and Migration Working Papers, Paris, OECD. Hacker, J. S. (2004) ‘Privatizing Risk without Privatizing the Welfare State: The Hidden Politics of Social Policy Retrenchment in the United States’, American Political Science Review, 98 (2): 243–60. Hall, P. A. (1993) ‘Policy Paradigms, Social Learning, and the State: The Case of Economic Policymaking in Britain’, Comparative Politics, 25 (3): 275–96. Hudson, J. and Kühner, S. (2009) ‘Towards productive welfare? A comparative analysis of 23 OECD countries’, Journal of European Social Policy, 19 (1): 34–46.

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APPENDIX The primary data used for this book are 52 in-depth interviews carried out by the author with Dutch government officials, politicians, trade union representatives, employers’ organisation representatives and representatives of consultative bodies representing the social partners and/or the government and collective bargaining negotiators.The Dutch Labour Foundation (Stichting van de Arbeid), created in 1945, is the main consultative body for the social partners in the Netherlands and represents both trade unions and employers. Three trade union confederations and three employers’ organisations are members of the Labour Foundation.The latter include the largest employers’ organisation in the Netherlands,VNO-NCW (Confederation of Netherlands Industry and Employers), representative of 180 associations; the Royal Dutch Association of Small and Medium-sized Enterprises (MKB Nederland) and the Dutch Federation of Agricultural and Horticultural Organisations (LTO Nederland). Trade unions are represented by the peak trade union confederation FNV (the Netherlands Trade Union confederation) representative of 16 unions; the Confederation of Christian Trade Unions in the Netherlands (CNV) and the Trade Union Federation for Intermediate and Higher Employees (Unie MHP). Organised interests meet twice annually within the Labour Foundation, creating centralised policy recommendations for upcoming collective bargaining rounds. The other important consultative body is the Social and Economic Council of the Netherlands (Sociaal Economische Raad, SER). Created five years after the Labour Foundation in 1950, the SER provides a means of concertation among its members, including not only the social partners but a number of core members from various professional fields as well (so-called ‘crown members’, or kroonleden). The SER is principally an advisory council to the Dutch government across a number of social and economic issues. These interviews were carried out between February and September of 2009. All interviews were recorded and typed out in full. The interview transcripts were then coded and analysed using the qualitative software program AtlasTi. Information about the names and precise positions held by respondents remains anonymous and confidential. A list of the interviews, using anonymous titles, and interview numbers is listed below. Interviews Interview number referred to in the text 1 2 3 4 5

Position of interviewee Trade union representative Trade union representative Former trade union representative Representative in consultative organisation Former crown member of the SER

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Transforming the Dutch welfare state Interviews (continued) Interview number referred to in the text 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 30 31 32 33 34 35 36 37 38 39 40 41 42 158

Position of interviewee Employers’ organisation representative Former trade union representative Former trade union representative Trade union representative Employers’ organisation representative PvdA MP Former trade union official Governmental policy maker Representative in consultative organisation Former employers’ organisation representative Former collective bargaining official for a company in the transport sector Governmental policy maker Trade union official Former crown member of the SER Former representative in consultative organisation Former crown member of the SER Former trade union official CDA MP Former employers’ organisation representative Representative in consultative organisation PvdA MP Governmental policy maker GL MP VVD MP SP MP SP MP Trade union collective bargaining official in the transport sector Governmental policy maker VVD MP Former trade union official Employers’ organisation representative Employers’ organisation official Former governmental policy maker Former cabinet member Trade union collective bargaining official Collective bargaining official for an employer in the health care sector Trade union collective bargaining official in the health care sector CU MP

Appendix Interviews (continued) Interview number Position of interviewee referred to in the text 43 Collective bargaining official for an employer in the health care sector 44 Governmental policy maker 44 Former governmental policy maker 45 Former governmental policy maker 45 Governmental policy maker 46 Trade union representative 46 Former trade union representative 47 Employers’ organisation official 48 CDA MP 49 PvdA MP 50 Employers’ organisation representative 51 CDA MP 52 SP MP

Supplementary data The interview data have been compared and assessed in relation to numerous policy documents using extensive document analysis. To perform this analysis, important documents relating to the Dutch government and the Dutch social partners from 1994 to 2009 have been collected. Following, these documents have been scanned into the qualitative software program AtlasTi.5, and have consequently been evaluated, coded and analysed to provide an interpretation of the position of each of these actors. Documents collected include state-centric legislation, letters of explanation in legislative appendices and government inaugural statements1 which detail the agendas of incoming government coalitions, annual employment conditions memoranda from the peak trade union confederation FNV and the centralised employers’ organisation VNO-NCW, soft policy recommendations agreed upon in the bipartite Labour Foundation and state advisory reports created by the Social and Economic Council (SER) and other parliamentary documents, trade union or employer documents from the remaining social partners (CNV, MHP, MKB and LTO) as needed. Together these documents are used to give a thick description (see Geertz, 1973) of the perceptions and management of social risks in the Netherlands, ‘in such a way that we can understand the phenomenon studied and draw our own interpretations about meanings and significance’ (Patton, 2002: 438). Thick description offers a means of determining actors’ perceptions of social risks in the Netherlands, what their interests are and how their actions result in social risk management. By starting with a thick description, we start with answering how social risks are perceived and how these developments came about, before using the social mechanisms discussed in Chapter Two to answer why this happened. 159

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The thick description in each chapter is organised around major developments in each case by looking at the process of social risk protection – developments that can be described and explained. Each of these developments is then analysed separately, looking at how and why this process has led to that specific form of social risk protection. While the interviews and policy documents form the empirical foundation for this book, a number of secondary data sources are utilised to provide analyses of developments in social risk protection outcomes as well as information on public support of welfare state programmes. Developments in social risk protection are analysed using data from Statistics Netherlands (CBS) and the FNV CAODatabank Ducadam, a longitudinal panel database with detailed information on collective labour agreements formulated in the Netherlands from 1995 onwards (for more information see Schreuder and Tijdens, 2004). Developments in public support are outlined using data from the Netherlands Institute for Social Research (SCP).These data stem from the ongoing study Cultural Changes in the Netherlands carried out since the late 1950s, either annually or every two years (Becker, 2000; Becker and Sociaal Cultureel Planbureau, 1995; Sociaal en Cultureel Planbureau, 2004). Lastly, data on public opinion is taken from a survey on individual attitudes to social security in the Netherlands, financed by the Dutch GAK Foundation and developed by researchers at the Erasmus University Rotterdam. The data was collected by CentERdata (University of Tilburg) in 2006. A total of 2,682 respondents aged 16 and older were surveyed. Supplementary data used for each empirical chapter can be described as follows. In Chapter Three, disability and sickness policy are analysed using the data on collectively negotiated benefits in the Ducadam dataset. Protection is measured as two different types of arrangements: arrangements aimed at offering supplemental income protection (supplementing welfare state benefits) during a period of sickness or disability and arrangements aimed at preventing sickness and disability by improving working conditions. Data on the latter include: (1) agreements meant to regulate specific working conditions at the firm or sector level (either physical or organisational); (2) agreements on stress at work and illness-related absence; and (3) agreements on the internal and external placement of employees following a period of illness or disability. Income protection in collective bargaining, supplemental to welfare state benefits, is measured by looking at: (1) supplemental income during the first year of illness or disability; (2) supplemental income during the second year of illness or disability; and (3) the percentage of supplemental income provided for during the second year of illness or disability. The share of agreements that offers these financial provisions across time for a period of 16 years (1995–2009) is measured. Data for 2009 are not complete – data on approximately half of all registered collective agreements are included here, which explains the slight decline in most areas shown for 2009. Chapter Three also uses data from the SCP on public support of welfare policies. A total of three questions are used. The first question measures support for public expenditures, noting whether these should be higher, lower, or remain 160

Appendix

the same.The next variable looks at whether the public supports the current level of disability benefits, or feels they should be increased or decreased. There is also limited data on public opinion on the misuse of social security arrangements. Answers here are on a five-point scale, ranging from very much misuse, to very little. These trends are measured across time, looking at the period both prior to and during reforms, including all available data on these questions from 1980 to 2004.Trends are calculated as the correlation between year and mean annual score based on the scale of available answers.The trend in public support of welfare state expenditures (see Figure 3.4), where a higher score represents more support for public expenditures, shows that support was at a low point during the 1980s, but that there has been an increase in public support for welfare state expenditures. This trend is significant across time (Pearson’s r=0.69, n=12). Regarding the data on public support for disability expenditures, the data demonstrate that while there has been a decline in public support in recent years, the overall trend is positive (see Figure 3.5; Pearson’s r=0.97, n=17). Finally, data on perceived misuse of social security arrangements show that throughout the 1990s, an increasing number of people felt that social security arrangements were being misused (see Figure 3.6; Pearson’s r=0.96, n=5). In Chapter Four, the Ducadam dataset is used as well. The variable of interest is whether a collective agreement includes a childcare subsidy for all employees. The SCP data on public opinion are used to determine whether it is seen to be acceptable for mothers of school-aged children to work outside the home as well as whether it is acceptable for mothers with young children to work outside the home, meaning the use of a crèche would be necessary. Respondents can answer that they object to this, that they do not object to this, or that they would recommend this practice. Data on perceived responsibility for childcare is also included. Individuals were asked to respond to the following statement: ‘The government should create more affordable childcare where working mothers can bring their children during the day.’ Answers to this question are on a five-point scale, ranging from strongly disagree to strongly agree. These data are used to determine public support for the development of childcare policy in the Dutch welfare state. Chapter Five makes use of the Ducadam database measuring employability in collective agreements two ways: (1) the availability of training not related to an individual’s job or function; and (2) the availability of individual education plans (POPs) (Pruijt and Derogee, 2010). Using these two scores, two of the authors have created a variable ‘employability’, which is scored as a 0 if none of the items were found within the collective agreement and scored as a 1 if one or both of the items are found within the collective agreement. As with the other chapters, the focus here is on the share of collective agreements that offer some form of employability arrangement. The data on employability is only available from 1995 to 2003. To supplement this data and offer a second perspective on trends in employability arrangements in collective bargaining, we summarise data from the Autumn 161

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Agreements (Najaarsakkoorden), the annual agreement between the social partners and the state that also provides some data on employability. These documents provide information on two types of arrangements: (1) arrangements about general schooling; (2) arrangements for job-specific schooling. We also look at the total share of collective agreements that offers one or both of these arrangements (3). The collective agreements reported on here are a sample of Dutch collective agreements concluded each year. Lastly, in contrast to the two other chapters, we do not have trend data from the Netherlands Institute for Social Research (SCP) on public opinions of employability. Rather, the survey data from CentERdata on individual attitudes to social security in the Netherlands are used to say something about public perceptions of who is responsible for the training of employees. In the survey, respondents were first introduced to the subject of employee training. Respondents were told:‘Some people claim that employees should be trained more broadly than what is necessary in their job, so that they remain attractive to other employers should they become unemployed. To what extent do you agree or disagree with the following statements?’ Subsequently, the respondents are asked to respond to the following four statements: (1) Employees should be trained more broadly than what they need for their job; (2) Employees are responsible for their own training; (3) employers are responsible for the training of their employees; (4) the state is responsible for the training of employees. Answers vary from completely disagree to completely agree, based on a five-point Likert scale.

Methodological implications It is useful to make a final note on the methodological implications of the study carried out here. The data outlined in this Appendix were used to carry out a thick description of social risk protection in the Dutch welfare state using an actor-centred institutionalist approach. Understanding risk protection in the modern welfare state requires a dynamic analytical approach, one that accounts effectively for the interaction between actors and institutions, rather than focusing on actors or institutions alone. This book has demonstrated that changing and emerging social risks and the ability of the welfare state to adapt to these changes are not explained by existing path dependency arguments. Old and new politics arguments are likewise too parsimonious to explain adequately how and why welfare states adjust to changing social risks. These approaches, with a singular and more static focus on actors or institutions, are less effective in demonstrating and explaining the dynamic nature of risk protection in the modern welfare state. The actor-centred institutionalist approach, in combination with a qualitative thick description, has shown how the interaction between actors and institutions develops differently across social risk forms, explaining why risk protection differs within one welfare state. In the Dutch case, disability policy is primarily explained through interactive mechanisms, such as corporatism and the politics of blame avoidance. Using existing collective bargaining structures that produce increasing 162

Appendix

returns, the social partners compensated for the continued decollectivisation of disability protection within the welfare state, in a sense recollectivising disability protection.This interaction was also evident in efforts at blame avoidance by the state in exchange for the social partners being able to remain in the political game – a question of new politics. Driven also by a mechanism of crisis, the crisis in the WAO, the state and the social partners worked to adjust sickness and disability policy sufficiently to reduce the number of benefit recipients and future inflow into sickness and disability. The analysis in Chapter Three confirms that salient explanatory mechanisms can be found at the level of actors and institutions, as well as through their interaction (process), advocating the actor-centred institutionalist approach. In turn, developments in childcare perceptions are primarily explained by actorlevel and institutional-level mechanisms, including a common actor orientation mechanism and path dependent increasing returns. This common perception can be seen as an actor orientation mechanism motivating initial social partner involvement. The development towards the expansion of the welfare state is not only driven by a common actor orientation mechanism and the failure of selfregulation, but was also shaped by party politics. In particular, the combination of social democratic (Labour) and conservative political values is evident in childcare policy, with a focus on equality in provision on the one hand, and market-driven childcare on the other. Party politics continue to play a role in current discussions on the future of childcare policy as well, with the Labour party working together with trade union confederation FNV to realise universal childcare provision in the long term and Christian Democrats showing continued interest in income transfers. Insufficient employability is also primarily explained by actor-level and institutional mechanisms, including path dependent mechanisms but also an actor orientation mechanism of differing self-interests. As was the case with childcare protection, employability protection is driven by an actor orientation mechanism but counter to childcare policy no common actor orientation developed. The absence of collective protection in the welfare state for insufficient employability and simultaneous presence of state involvement as facilitator is explained by a preference for corporatist solutions to this individually perceived social risk as well as a deadweight effect, which makes state financial involvement unnecessary. In turn, employers and trade unions have accepted the responsibility of dealing with employability in collective bargaining, evidence of a corporatist political exchange. Driven by self-interest, the social partners have worked to include employability arrangements in collective labour agreements, leading to a significant increase in both job-specific and general training arrangements over the past fifteen years.The implementation of these arrangements is an issue that requires further research, as the evidence presented here suggests there are difficulties in certain sectors and firms in realising employability protection in the workplace. Each of these qualitative case studies supports the use of an actor-centred institutionalist approach for disentangling the complex interests of the actors involved in welfare provision 163

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within the Dutch institutional context.This type of framework has shown how it is possible that the same actors have worked within existing institutional structures to realise three separate forms of risk protection. Notes  The inaugural statement is presented by the Prime Minister to the Lower House of Parliament, outlining the government’s agenda based on the coalition accord reached by the political parties in power. 1

References Becker, J. W. (2000) ‘Culturele Veranderingen in Nederland 2000 – CV 2000 [computerfile] (Cultural Changes in the Netherlands)’, Amsterdam: Steinmetz Archives. Becker, J.W. and Sociaal Cultureel Planbureau (1995) ‘Culturele veranderingen in Nederland 1995 – CV’95 [computerfile] (Cultural Changes in the Netherlands)’, Amsterdam: Steinmetz Archives. Geertz, C. (1973) The Interpretation of Cultures: Selected Essays, New York: Basic Books. Patton, M. Q. (2002) Qualitative Research and Evaluation Methods, Thousand Oaks, CA: Sage Publications. Pruijt, H. and Derogee, P. (2010) ‘Employability and job security, friends or foes? The paradoxical reception of employacurity in the Netherlands’, Socio-Economic Review, 8 (3): 437–60. Schreuder, K. and Tijdens, K. G. (2004) ‘Codebook DUCADAM Dataset: een statistisch bestand van de FNV CAO-databank’, AIAS Working Papers, 24, Amsterdam, Amsterdam Institute for Advanced Labour Studies (University of Amsterdam). Sociaal en Cultureel Planbureau (2004) ‘Culturele veranderingen in Nederland 2004 – CV’04 [computerfile]’, Amsterdam: Steinmetz Archives.

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List of abbreviations AVV General Extension of Collective Labour Agreement (Algemeen Verbindend Verklaren) AZ Ministry of General Affairs (Ministerie van Algemene Zaken) CBS Statistics Netherlands (Centraal Bureau voor de Statistiek) CDA Christian Democratic Appeal (Christen Democratisch Appèl), referred to as the Christian Democratic Party CNV National Federation of Christian Trade Unions in the Netherlands (Christelijk Nationaal Vakverbond) CPB Dutch Central Planning Office (Centraal Planbureau) CU ChristianUnion (ChristenUnie) D66 Democrats 66 (Democraten 66), referred to as Democratic Liberals EMU European Economic and Monetary Union EU European Union EVC Erkenning van Verworven Competenties (Recognition of Obtained Skills) or Ervaringscertificaat (Certificate of Experience) FNV Netherlands Trade Union Confederation (Federatie Nederlandse Vakbeweging) GDP Gross Domestic Product GL GreenLeft (GroenLinks) HRM Human resource management IVA Income Provision Scheme for People Fully Occupationally Disabled (Wet Inkomensvoorziening Volledig Arbeidsongeschikten) LPF Pim Fortuyn List (Lijst Pim Fortuyn), referred to as a rightwing political party LTO Dutch Federation of Agricultural and Horticultural Organisations (Land- en Tuinbouw Organisatie Nederland) MDW Marketization, Deregulation and Legislative Qualities (Marktwerking, Deregulering en Wetgevingskwaliteiten) MHP Trade Union Federation for Intermediate and Higher Employees (Vakcentrale voor Middengroepen en Hoger Personeel) MKB Royal Dutch Association of Small and Medium-sized Enterprises (Midden- en Kleinbedrijf Nederland) MP Member of Parliament MY Refers to comments made by the author, Mara Yerkes O&O Sector-level educational and development funds (Opleidings- en Ontwikkelingsfondsen) OECD Organisation for Economic Cooperation and Development OSA Dutch Institute for Labour Studies (Organisatie voor Strategisch Arbeidsmarktonderzoek)

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PEMBA Act on Premium Differentiation and Market Regulation (Wet Premiedifferentiatie and Marktwerking bij Arbeidsongeschiktheidsverzekeringen) POP Individual education plans (Persoonlijke Opledings Plannen) PvdA Dutch Labour Party (Partij van de Arbeid), referred to as the Labour Party or Social Democrats SCP Netherlands Institute for Social Research (Sociaal Cultureel Planbureau) SER Social and Economic Council (Sociaal Economische Raad) SP Socialist Party (Socialistisch Partij) StAr Labour Foundation (Stichting van de Arbeid) SZW Ministry of Social Affairs and Employment (Ministerie van Sociale Zaken en Werkgelegenheid) TBA Act on Reducing Disability Claims (Wet Terugdringing Beroep op de Arbeidsongeschiktheidsregelingen) VNO-NCW Confederation of Netherlands Industry and Employers (Verbond Nederlandse Ondernemingen-Nederlands Christelijk Werkgeversverbond) VVD People’s Party for Freedom and Democracy (Volkspartij voor Vrijheid en Democratie), referred to as the Conservative Party VWS Ministry of Health, Welfare and Sport (Ministerie van Volksgezondheid,Welzijn en Sport) WAJONG Young Disabled Persons Act (Wet werk en arbeidsondersteuning jonggehandicapten) WAO Occupational Disability Insurance Act (Wet op de Arbeidsongeschiktheidsverzekering) WGA Return to Work Scheme for the Partially Disabled (Wet Werkhervatting Gedeeltelijk Arbeidsgeschikten) WIA Work and Income according to Labour Capacity Act (Wet Werk en Inkomen naar Arbeidsvermogen) WRR Scientific Council for Government Policy in the Netherlands (Wetenschappelijke Raad voor het Regeringsbeleid) WULBZ Act on Extending Salary Coverage during Illness (Wet Uitbreiding Loondoorbetalingsplicht bij Ziekte)

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Index

Index

A acceptance and diffusion of employability concept 110–18 actor-centred institutionalism 21, 26, 29, 33, 42, 69, 101, 134, 162-163 actor orientation mechanism 27, 34, 89, 101, 110, 145, 163 to explain developments in childcare 78, 82–83, 86, 89, 163 to explain developments in employability 110, 113, 115, 118, 127, 133, 163 actors and interests, importance in social risk protection 21-22, 26–27, 33-35 bounded rationality, concept of 26 composite actors 26-27, 34, 110, 112, 115, 118 distribution of power 5, 8, 22-23, 26-30, 32, 34-35, 144 industrial relations actors see also social partners 29–30 public support 30–31 in the welfare state 27–29, 77, 109 interest realisation in the welfare state 31-32 in industrial relations 32-33 Algemeen Verbindend Verklaren (general extension practices; AVV) 63, 127 arbo catalogues and covenants 58–59 Autumn agreements (Najaarsakkoorden) 61, 64, 116-117, 124, 128-29, 161-62

B Bakker Commission 99 BALTZ legislation 61 benefit administration, in disability policy 43, 45-46, 50, 53, 63-65, 68, 140, 149 benefit expenditures in disability and sickness 11, 41-42 benefit recipient levels, disability and sickness 41-42, 47, 50, 66 bounded rationality, concept of 26 Buurmeijer inquiry 52, 70

C care risks 1-4, 6, 13-14, 75-103, 146, 150 CDA (Christian Democratic Party) 35, 51, 82, 89, 94-95, 99-100, 115, 163 CentERdata, survey data on individual attitudes to social security 160, 162 changes in social risks 1-5 changing perceptions of childcare 75–82, 101

childcare 75-103, 133, 140-42, 144-46, 14950 actor orientation mechanism, to explain developments in 78, 82-83, 86, 89, 163 changing perceptions of 75–82, 101 Childcare Act (2005) 77, 82, 86, 89, 90 collective bargaining and 77, 81–89, 96-99, 102 collective protection for see also semicollectivisation 77, 89–101, 139-141, 144-45, 149-150 corporatist mechanism, to explain developments in 89, 96-99 development of policy 75-77 financing of 77, 82, 84, 86, 90, 98, 149 increasing returns mechanism, to explain developments in 82, 87, 96-99 individual responsibility for 77, 80-81, 86, 89, 92, 140 legislation in relation to 76-77, 82, 87, 8991, 94-98, 102 ‘new’ politics mechanism, to explain developments in 100 ‘old’ politics mechanism, to explain developments in 89, 92-95, 100 ,104 public support mechanism, to explain developments in 80-81 self-regulation in 82, 88-89, 92, 96-100, 140, 149 social partner involvement in 77-78, 82, 8589, 91-92, 95-100, 102, 140, 163 supply 75-76, 82, 85, 91 women’s employment and 79-82, 100, 149 Childcare Act (2005) 77, 82, 86, 89, 90 CNV (Confederation of Christian Trade Unions in the Netherlands) 29, 51, 59, 71, 157 collective bargaining 8-10, 23-24, 32-33, 56, 119 childcare protection in 77, 81–89, 96–99, 102 collective labour agreements 9-10, 45, 54, 57, 59-63, 70, 77, 102 implementation of 109, 130-34, 163 as compensation for welfare reform 45, 5963, 68-69, 71, 87, 140, 142, 148, 163 decentralisation of 8, 10, 23-24, 34, 63, 130 disability protection in 43, 45-46, 54, 56-63, 68-71

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Transforming the Dutch welfare state differentiation and customisation in 34, 58, 127, 130-131, 133 employability policy in 109, 115, 127-33, 145 FNV CAO Databank Ducadam 57, 61, 83, 128-29, 160-61 individual education plans (POPs) 118, 128-29, 161 schooling arrangements in 109, 118, 128131 collective labour agreements 9-10, 45, 54, 57, 59-63, 70, 77, 102 collective protection, for social risks 2, 4-5, 23, 27-28, 30-31, 139-41, 147, 149, 152 for childcare 77, 89-101, 139-141, 144-45, 149-50 for disability 43-55, 59-60, 68, 148-49 for employability 108-109, 118, 122–27, 134, 163 commodification of labour 4, 7, 147, 151 compensation for welfare reform through collective bargaining 45, 59–63, 68, 71, 87, 140, 142, 148, 163 composite actors 26–27, 34, 110, 112, 115, 118 consequences of social risks 1-3 conversion, form of institutional change 25 corporatism corporatism in the Netherlands 10-11, 29, 32-36, 45, 52, 57-60, 63, 65, 69, 98, 125, 127, 134-35, 139-43, 149, 152, 163 corporatist institutions 10, 21, 30, 37, 87, 98, 141-43 corporatist mechanism 32, 36, 101 to explain developments in childcare 89, 96-99 to explain developments in disability and sickness 46, 50, 52-56, 58, 63, 65 to explain developments in employability 122-125, 134, 162 immobile corporatism 32, 37, 53, 65, 98 industrial relations and revival of 7–9 responsive corporatism 10, 37, 29-30, 32, 52-53, 55, 123, 125, 127 and social pacts 8-9 corporatist institutions 10, 21, 30, 37, 87, 98, 141-43 corporatist mechanism 32, 36, 101 to explain developments in childcare 89, 96-99 to explain developments in disability and sickness 46, 50, 52-56, 58, 63, 65 to explain developments in employability 122-125, 134, 162 creative destruction, concept of 111 CU (ChristianUnion) 115 Cultural Changes in the Netherlands, public opinion data 67-68, 81, 160-61

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D data used in this study 157-162 D66 (Democrats66; Democratic Liberals) 50, 80, 95 deadweight effect mechanism, to explain developments in employability 118-122, 134 decentralisation of collective bargaining 8, 10, 23-24, 34, 63, 130 definitions of employability 110-118, 133, 141, 145 of risk 1 of social risks 1 of welfare and workfare, in relation to social rights 4-5, 14, 147, 149-52 of the welfare state 4 development of childcare policy 75-77 developments in disability and sickness policy 42-43, 69-70 differentiation and customisation in collective bargaining 34, 58, 127, 130-31, 133 disability and sickness protection BALTZ legislation 61 benefit administration 43, 45-46, 50, 53, 63–65, 68, 140, 149 benefit expenditures 11, 41-42 benefit recipient levels 41-42, 47, 50, 66 Buurmeijer inquiry 52, 70 collective bargaining and 43, 45-46, 54, 56-63, 68-71 supplemental income arrangements in 60-64 collective protection for 43-55, 59-60, 68, 148-149 corporatist mechanism, to explain developments in 46, 50, 52-56, 58, 63, 65 developments in policy 42-43, 69-70 Donner Commission 50-51, 64 Gatekeeper legislation 44, 49, 56, 60, 63 increased responsibility for employers 55–59 increasing returns mechanism, to explain developments in 59-60 individual responsibility for 44, 46, 54-56, 59, 65, 68-69, 140, 149 IVA (Income Provision Scheme for People Fully Occupationally Disabled) 42, 49, 64 ‘new’ politics mechanism, to explain developments in 46, 50-51, 53-54 ‘old’ politics mechanism, to explain developments in 50, 69 PEMBA (Act on Premium Differentiation and Market Regulation) 44, 45, 49, 55–56, 64, 71 prevention of disability and sickness 45-46, 51, 55-59, 62-64, 149, 160 public support for 46, 65–68, 81 reforms to 43–59 reintegration efforts in 44-46, 49, 55-58, 60, 62-64

Index social partner involvement in 43, 45-48, 5065, 69, 149, 163 TAV (Act on Reducing Sickness Absence) 49 TBA (Act on Reducing Disability Claims) 44, 49, 60 WAJONG benefit 69 WAO (Occupational Disability Insurance Act) 43, 46, 49, 51, 54, 69, 124 WAO crisis mechanism, to explain developments in 46-50, 54, 69 WGA (Return to Work Scheme for the Partially Disabled) 42, 46, 49, 56, 64-65 WIA (Work and Income according to Labour Capacity Act) 42, 44, 46, 49-50, 57, 59, 61-62, 64, 66, 69 WULBZ (Act on Extending Salary Coverage during Illness) 44-45, 48-49 displacement, form of institutional change 25 dismissal, association with employability 109, 113, 132, 134-35, 150-51 distribution of power, among actors 5, 8, 2223, 26-30, 32, 34-35, 144 Donner Commission 50-51, 64 drift, form of institutional change 25 Dutch GAK Foundation 160 ‘Dutch miracle’ 10–13, 141 Dutch response to social risks 4-5, 21, 141, 147-52

E employability acceptance and diffusion of concept 110–18 actor orientation mechanism, to explain developments in 110, 113, 115, 118, 127, 133, 163 collective bargaining and 109, 115, 127-33, 145 implementation of agreements 109, 13034, 163 individual education plans (POPs) 118, 128-29, 161 schooling arrangements in 109, 118, 128131 collective protection for 108-109, 118, 12227, 134, 163 corporatist mechanism, to explain developments in 122-125, 134, 162 deadweight effect mechanism, to explain developments in 118-122, 134 definitions of 110-118, 133, 141, 145 employee empowerment 110, 113, 116, 118, 127, 133, 135 flexibility and adaptability 110-11, 114-15, 118, 120, 124, 127, 133, 135 life-long learning 115-16, 118, 134 dismissal and association with 109, 113, 132, 134-35, 150-51

EVC (Recognition of Obtained Skills) 117, 120 financial responsibility for 109, 118-19, 121-24, 130, 134-35, 150 functional imperative 119, 122, 135 increasing returns mechanism, to explain developments in 118-119, 122-124, 130, 134 individual responsibility for 107, 122, 12425, 127, 133-34, 140-41, 151-52, 163 initial and post-initial schooling, in relation to 116, 119, 122-23, 134 and job security 111-13, 115, 118, 135 and lack of collective protection 108-09, 118, 122–27, 133-35, 140-41 O&O (sector-level educational and development) funds 124, 128-130, 135 public support mechanism, to explain developments in 125-127 self-regulation in 122–24, 134, 141 social partner involvement in 109-110, 112, 116, 118-19, 121-25, 127, 134, 141, 150, 163 welfare state as facilitator of 118–27, 134, 150-51 part-time unemployment arrangement 122 regional cooperative networks 120, 134 retraining subsidy 109, 121-122 employee empowerment 110, 113, 116, 118, 127, 133, 135 enabling state 4, 107 EVC (Recognition of Obtained Skills) 117, 120 exhaustion, form of institutional change 25, 148 external risk, concept of 6, 152

F financial responsibility for employability 109, 118-19, 121-24, 130, 134-35, 150 financing of childcare 77, 82, 84, 86, 90, 98, 149 fiscal sustainability of welfare states 6, 12-13, 22-23, 41, 45, 51 flexibility and adaptability, in relation to employability 110-11, 114-15, 118, 120, 124, 127, 133, 135 Flexibility and Security Act (1999) 112 FNV (the Netherlands Trade Union Confederation) 84-85, 100, 112, 116-17, 157, 159, 163 FNV CAO Databank Ducadam 57, 61, 83, 128-29, 160-61 Fordist employment structures 2, 6–7 formation and expansion of the welfare state 5 functional imperative 119, 122, 135

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G Gatekeeper legislation 44, 49, 56, 60, 63 gender issues in relation to care 2, 95-96, 102, 141 gender (in)equality in employment 13, 102, 150

I immobile corporatism 32, 37, 53, 65, 98 implementation of collective labour agreements 109, 130-34, 163 increased responsibility for employers in disability and sickness policy 55–59 increasing returns mechanism see also path dependency 22-23, 34, 69, 101, 163 individual education plans (POPs), in collective bargaining 118, 128-29, 161 individual responsibility for social risks 1-3, 5-7, 28-29, 31, 33, 147 for childcare 77, 80-81, 86, 89, 92, 140 for disability 44, 46, 54-56, 59, 65, 68-69, 140, 149 for employability 107, 122, 124-25, 127, 133-34, 140-41, 151-52, 163 industrial relations 21-22 actors 29–30 and the Dutch welfare state 10-13, 157 ‘polder model’ 12-13, 41, 52, 141-42 institutions 23–24 interest realisation in 32–33 and revival of corporatism 7–9 social pacts 8-9 social partners 8-10, 24, 30, 32-33, 141-42, 152, 157, 159, 162 involvement in childcare 77-78, 82, 85-89, 91-92, 95-100, 102, 140, 163 involvement in disability and sickness 43, 45-48, 50-65, 69, 149, 163 involvement in employability 109-110, 112, 116, 118-19, 121-25, 127, 134, 141, 150, 163 Labour Foundation (StAr) 10, 52-53, 62, 64, 78, 84-85, 96-97, 112, 118-119, 124, 157, 159 Social and Economic Council of the Netherlands (SER) 10, 47-48, 51-54, 64, 78, 90-91, 112, 115, 119, 123, 157, 159 informational failure 2 initial and post-initial schooling in relation to employability 116, 119, 122-23, 134 institutional change 5, 12, 24-25, 145 conversion 25, 148 displacement 25 drift 25 in the Dutch welfare state 50, 68, 109, 11819, 122, 147-52 exhaustion 25, 148-49 layering 25 path dependency 24-25

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institutions industrial relations 23-24 welfare state 5, 22-23 interest realisation in welfare states 31–32 industrial relations 32–33 IVA (Income Provision Scheme for People Fully Occupationally Disabled) 42, 49, 64

J job security 111–13, 115, 118, 135

L Labour Foundation (StAr) 10, 52-53, 62, 64, 78, 84-85, 96-97, 112, 118-119, 124, 157, 159 lack of collective protection, for employability 108-09, 118, 122-27, 133-35, 140-41 layering, form of institutional change 25 legislation in relation to childcare 76-77, 82, 87, 89-91, 94-98, 102 life-long learning 115-16, 118, 134 Lisbon Strategy (1997) 80, 82, 99, 115, 119 LPF (Pim Fortuyn List; right-wing political party) 51 LTO (Dutch Federation of Agricultural and Horticultural Organisations) 157, 159

M manufactured risk, concept of 6 market failure 2 MHP (Trade Union Federation for Intermediate and Higher Employees) 58, 157, 159 methodological implications of the study 162-164 Ministry of Health, Welfare and Sport (VWS) 78, 89–92, 102 Ministry of Social Affairs and Employment (SZW) 76, 78, 90, 92, 102, 121 MKB (Royal Dutch Association of Small and Medium-sized Enterprises) 157, 159 modernisation of the welfare state 6-7, 12, 139

N the Netherlands Institute for Social Research (SCP) 76, 152, 160-162 ‘new’ politics 5, 14, 31, 35, 145, 162-63 ‘new’ politics mechanism to explain developments in childcare 100 to explain developments in disability and sickness 46, 50-51, 53-54 new social movements theory 30, 37 ‘new’ social risks 3-4, 6-7, 12-13, 22-24, 2728, 30-32, 37, 66, 75, 77, 89, 93, 100-01, 107, 118, 125, 130, 133-35, 139-147

Index

O occupational welfare 4-5, 59, 101, 139, 14243 ‘old’ politics 5, 14, 28, 145 ‘old’ politics mechanism to explain developments in childcare 89, 92-95, 100, 144 to explain developments in disability and sickness 50, 69 ‘old’ social risks 3-4, 6-7, 12-13, 23-24, 27-28, 30-33, 37, 41, 48, 66, 92, 101, 139-40, 143, 147 O&O (sector-level educational and development) funds 124, 128-130, 135

P part-time unemployment arrangement 122 path dependency 5, 22, 30, 37, 162 increasing returns mechanism 22-23, 34, 69, 101, 163 to explain developments in childcare 82, 87, 96-99 to explain developments in disability and sickness 59-60 to explain developments in employability 118-19, 122-24, 130, 134 sequencing mechanism 22-24, 100, 34 and institutional change 24–25 PEMBA (Act on Premium Differentiation and Market Regulation) 44-45, 49, 55–56, 64, 71 pillarisation (verzuiling) 29 ‘polder model’ 12-13, 41, 52, 141-42 power distribution mechanism 28-29, 35, 144 power resources of groups affected by social risks 4-5, 28, 30, 144-45 new social movements theory 30, 37 power resources theory 5, 28, 143-44 prevention of disability and sickness 45-46, 51, 55-59, 62-64, 149, 160 public support for disability 46, 65–68, 81 mechanism 30-31, 35, 37, 125-27 to explain developments in childcare 8081 to explain developments in employability 125-27 in relation to actors 30-31 of social risk protection 30–31 ‘purple’ political coalition 50, 80, 90, 93-94, 112 PvdA (Labour Party; Social Democrats) 50, 80, 91, 93, 95, 99-100, 115, 149

R reform and retrenchment of the welfare state 5-6, 14, 41, 143 reforms to disability and sickness policy 43–59

regional cooperative networks 120, 134 reintegration efforts in disability and sickness policy 44-46, 49, 55-58, 60, 62-64 ‘responsive’ corporatism 10, 37, 29-30, 32, 5253, 55, 123, 125, 127 retraining subsidy 109, 121-122 revival of corporatism 7–9 risk see also social risks definition of 1

S schooling arrangements in collective bargaining 109, 118, 128-131 Scientific Council for Government Policy in the Netherlands (WRR) 43, 71, 115 self-regulation in childcare 82, 88-89, 92, 96-100, 140, 149 in employability policy 122–24, 134, 141 semicollectivisation of childcare 77, 89–101, 139-141, 144-45, 149-150 sequencing mechanism 22-24, 100, 34 Sickness Benefit Scheme 48 sickness insurance 44, 48 size of groups affected by social risks 3-4, 143-44, 146-47 Social and Economic Council of the Netherlands (SER) 10, 47-48, 51-54, 64, 78, 90-91, 112, 115, 119, 123, 157, 159 social investment state 4, 107, 147, 152 social (policy) learning 24, 29, 50 social mechanisms and empirical expectations 34–36 social pacts 8-9 social partners 8-10, 24, 30, 32-33, 141-42, 152, 157, 159, 162 involvement in childcare 77-78, 82, 85-89, 91-92, 95-100, 102, 140, 163 involvement in disability and sickness 43, 45-48, 50-65, 69, 149, 163 involvement in employability 109-110, 112, 116, 118-19, 121-25, 127, 134, 141, 150, 163 Labour Foundation (StAr) 10, 52-53, 62, 64, 78, 84-85, 96-97, 112, 118-119, 124, 157, 159 Social and Economic Council of the Netherlands (SER) 10, 47-48, 51-54, 64, 78, 90-91, 112, 115, 119, 123, 157, 159 social rights in the welfare state 4–6, 147, 152 defined by welfare and workfare 4-5, 14, 147, 149-52 social risks changes in 1–5 collective protection for 2, 4-5, 23, 27-28, 30-31, 139-41, 147, 149, 152 childcare 77, 89–101, 139-141, 144-45, 149-150 disability and sickness 43-55, 59-60, 68, 148-149

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Transforming the Dutch welfare state employability 108-109, 118, 122-27, 134, 163 consequences of 1-3 definition of 1 Dutch response to 4-5, 21, 141, 147-52 external risk, concept of 6, 152 individual responsibility for social risks 1-3, 5-7, 28-29, 31, 33, 147 for childcare 77, 80-81, 86, 89, 92, 140 for disability 44, 46, 54-56, 59, 65, 68-69, 140, 149 for employability 107, 122, 124-25, 127, 133-34, 140-41, 151-52, 163 and information failure 2 manufactured risk, concept of 6 and market failure 2 ‘new’ social risks 3-4, 6-7, 12-13, 22-24, 2728, 30-32, 37, 66, 75, 77, 89, 93, 100-01, 107, 118, 125, 130, 133-35, 139-147 ‘old’ social risks 3-4, 6-7, 12-13, 23-24, 2728, 30-33, 37, 41, 48, 66, 92, 101, 139-40, 143, 147 power resources of groups affected by 4-5, 28, 30, 144-45 public support for protection of 30–31 in relation to childcare 80-81 in relation to disability and sickness 46, 65–68, 81 in relation to employability 125-127 size of groups affected by 3-4, 143-44, 146-47 and social rights 4–6, 147, 152 defined by welfare and workfare 4-5, 14, 147, 149-52 and timing thesis 4, 22-23, 100, 130, 139, 143-45, 147 and the welfare state 2, 9, 21-23, 25, 139, 141-46 supplemental income arrangements for disability and sickness 60-64 supply, of childcare 75-76, 82, 85, 91

T TAV (Act on Reducing Sickness Absence) 49 TBA (Act on Reducing Disability Claims) 44, 49, 60 timing thesis 4, 22-23, 100, 130, 139, 143-45, 147

V VNO-NCW (Confederation of Netherlands Industry and Employers) 84, 112, 116-17, 157, 159 VVD (People’s Party for Freedom and Democracy; Conservative Party) 50-51, 70, 80, 93-94, 100

172

W wage bargaining 9-10 wage moderation 7, 10, 12, 13, 85 WAJONG benefit 69 WAO (Occupational Disability Insurance Act) 43, 46, 49, 51, 54, 69, 124 WAO crisis mechanism, to explain developments in sickness and disability 46-50, 54, 69 Wassenaar Agreement (1982) 10 welfare mechanism see also social rights 4, 147 welfare state actors and interests in 27-29, 77, 109 definition 4 development formation and expansion of 5 modernisation 6-7, 12, 139 reform and retrenchment 5-6, 14, 143, 41 Dutch welfare state as facilitator of employability 113-27, 134, 150-51 and industrial relations 10-13, 157 and institutional change 50, 68, 109, 11819, 122, 147-52 fiscal sustainability of 6, 12-13, 22-23, 41, 45, 51 institutional change 5, 12, 24-25, 145 institutions 5, 22-23 interest realisation in 31-32 social rights in 4-6, 147, 152 and social risks 2, 9, 21-23, 25, 139, 141-46 welfare and workfare, in relation to social rights 4-5, 14, 147, 149-52 WGA (Return to Work Scheme for the Partially Disabled) 42, 46, 49, 56, 64-65 WIA (Work and Income according to Labour Capacity Act) 42, 44, 46, 49-50, 57, 59, 61-62, 64, 66, 69 women’s employment, in relation to childcare 79-82, 100, 149 workfare mechanism see also social rights 4, 147 WULBZ (Act on Extending Salary Coverage during Illness) 44-45, 48-49