Paper prepared for the ECPR General Conference, 3-6 September 2014 in Glasgow

Panel The Politics of Welfare and Social Policy Reform

How policies shape politics:

Labor market policy conflicts and coalitions in five western European countries

Abstract

This article contributes to the scholarly debate on how new social needs are politicized at the elite level. I am able

to demonstrate empirically that the labor market policy conflict is two-dimensional. The findings of an analysis of

five Western European countries indicate that depending on the labor market legacies, political actors fight not

only over the degree of generosity and state intervention, but also over the nature and the extent to which specific

activation policies should be promoted. I show that different regimes employ different types of activation

strategies to recommodify the unemployed and that this affects labor market politics.

Moreover, I address the unresolved question of whether social democrats represent the labor market insiders or

outsiders. I show that their strategies differ depending on the regime’s legacies and that they represent the

insiders in dualized countries (Germany, France and Italy) and the outsiders in flexicurity countries (Denmark and

Switzerland).

Flavia Fossati

Political Science Department

Swiss Politics and Comparative Political Economy

University Zurich

Affolternstrasse 56

CH-8050 Zurich

Phone: +41 (0)44 634 50 28

Email: fossati@pw.uzh.ch

Acknowledgments:

I would like to thank Silja Häusermann, Hanspeter Kriesi, Dominic Höglinger and Evelyne Hübscher for valuable

feedback on previous versions of this paper. I also thank the participants of the panel Political Representation and

actors' strategies at The Swiss Political Science Conference in Berne, February 2014 and the participants of the

panel The Changing Politics of Social Policy at the XVIII ISA World Congress of Sociology in Yokohama, 13-19 July

2014.

I am grateful for the support by the Swiss National Science Foundation, Pro-Doc Grant Grant Number

PDFMP1-126421.

1

Introduction

In Europe, over the last few austere decades, we have witnessed an activation turn. Thereby welfare

states have been transformed from (passive) securing arrangements to schemes which actively promote

labor market participation. This goal has been reached by introducing policies such as retraining

schemes, counseling, job creation programs, limits on benfits recipiency and increasing benefit

conditionality (Bonoli 2010; Bonoli & Natali, 2012; Torfing, 1999; Gilbert, 2002). Whilst reforms

introducing active labor market policies (ALMP) have been studied in detail, mostly in the form of case

studies analysis (Bonoli and Natali 2012; Clasen and Clegg 2011), the question of how these reforms

affect the politics of labor market policy has not been systematically addressed. In this article I aim to

complement the literature on the multidimensionality of post-industrial reforms by investigating which

issues are controversial among political actors and thus determine the labor market conflict. Then, I

consider the other side of the coin, and analyze which actors coalesce and how these patterns differ

depending on the labor market policy legacies.

The first contribution of this article is to show empirically that the decision-making process in the

domain of labor market policy no longer revolves merely around distributive issues along the lines of the

labor/capital conflict, but that it increasingly includes questions about the nature of the activation

policies (Bonoli and Natali 2012; Clasen and Clegg 2011). This is the case because in an era of austerity

most European countries have implemented ALMP reforms inspired by the guidelines proposed by

several supra- and international organizations (Ferrera & Gualmini, 2004; Graziano, 2007) to avoid

addressing the skyrocketing unemployment rates using purely expansive social policies. I argue that the

countries’ pre-existing institutional design, however, predefines the implementability and compatibility

of particular ALMP policies with the labor market regime. Thus, the very interplay of labor market

2

legacies and new policy strategies gives rise to the variety of activation policies which ranges from the

Nordic best-practice models to the less efficacious south-European versions, which neglect re-training

and human-capital development. Whilst previous studies have claimed, mainly in theoretical terms, that

activation policies differ significantly across countries, I am actually able to show empirically that

activation policies in five Western European countries differ, and either focus on occupational activation

strategies or on human-capital investment depending on the countries’ labor market legacies (cf.

Torfing, 1999; Barbier & Ludwig-Mayerhofer, 2004; Barbier & Fargion, 2004; Bonoli, 2010; Daguerre,

2007).

Second, I propose an institutionalist argument to explain how regime-specific activation conflicts come

about and how these shape the political actor’ s coalition patterns. In more detail, I argue that it is

precisely the existence of different institutional legacies which influences the nature of the activation

conflicts in different labor market regimes. In a country where, for instance, training policies are already

firmly established, the political conflict is likely to revolve around policies that are not yet implemented,

such as the introduction of public job schemes or unemployment benefit reductions. Hence, those

measures which differ from the countries’ standard policy repertoire are the ones which are most likely

to be controversial, and by consequence structure the politics of labor market policy1. Conversely, the

regime-specific policy repertoire is taken for granted - as far as it works - and hence is less subject to

political controversies.

Finally, I apply this framework to explain the allegedly puzzling diversity of the social democrats’

strategy when it comes to representing either labor market insiders or outsiders (Rueda 2007;

Schwander 2013). I solve this apparent contradiction by arguing that actors who belong to the same

group or party family are likely to differ with respect to the measures they propose depending on the

1 In my understanding “controversy” is the clearest indicator of political conflict.

3

institutional context. For instance, in a country where unemployment policies are reasonably generous

and hence cover the needs of the labor market insiders, social democrats may no longer focus on

representing these interests but rather concentrate on policies targeting the new social risks and

thereby expand their electorate. Conversely, if welfare provision for insiders is marginal, social

democratic parties are likely to support the interests of their traditional core-electorate and hence focus

on insider policies before turning to new challenges. Thus, the variation in labor market policy context

explains why the scholarly literature proposes contradictory expectations with respect to the strategy of

social democratic parties (Rueda, 2007; Schwander, 2013). In a nutshell, I argue that policy shapes

politics (Lowi, 1972) and that, by consequence, institutional settings shape the nature of the political

conflict and of coalition patterns.

I develop these arguments as follows: In the theoretical section, I elucidate why the labor market policy

conflict has become two-dimensional, and apart from a state-market2 conflict also involves a conflict

over activating strategies. In a second step, I theorize and develop predictions about the coalitions in

this policy domain. In the empirical section, by means of factor analyses, I show that the labor market

conflict is indeed characterized by two dimensions. According to the hypotheses, I find that the

traditional state/market conflict is complemented by a regime-specific activation dimension. Then, I

describe the political actors’ positions in the two-dimensional policy space and discuss the coalition

patterns. In the final part of the article, I analyze the strategy of social democrats in particular, to assess

whether they represent the insiders (Rueda, 2007), whether they instead focus on the outsiders, or

whether they represent both (Schwander, 2013). The last section summarizes the findings and explores

venues for further research.

2

Here I use economic and state/market conflict synonymously.

4

Theory

The conflict in labor market policy: economic and activation dimensions

The political conflict shaping the party system, and by consequence also social policy, is traditionally

represented as a labor-capital antagonism. This antagonism has an impact on the level of generosity and

universality of passive benefits, as well as the role and degree of state intervention (Esping-Anderson,

1990; Kitschelt, 1994; Korpi 1983; Lipset & Rokkan, 1985 [1967]). This basic political conflict can be

synthesized in the form of an axis with one side in opposition to state-interventionism and the other

opposed to market-oriented policies. With regards to social and labor market policies, left policy

positions - which were proposed mainly by social-democratic parties and unions - promote generous

passive benefits. These aim to reduce social inequality by insuring blue-collar workers against traditional

industrial risks (Esping-Anderson, 1990). Conversely, political actors on the right propose market-liberal

solutions to reduce state intervention and constrain universalistic and redistributive welfare state

spending.

Even though this conflict still structures labor market policy, it is no longer able to fully capture the

preferences and hence the nature of political contention in a post-industrial setting. In fact, the changes

that have occurred in the occupational structure as a consequence of post-industrialization and social

modernization have led to a differentiation of political preferences (Oesch, 2006; Kriesi, 1998; Rueda,

2007; Bonoli, 2005; Taylor-Gooby, 2005). Generous unemployment or pension insurance systems are

credited foremost to the decreasing share of workers in standard employment relations, but they

represent a suboptimal protection for the increasing share of unemployed and atypical workers (Bonoli,

2005; Berton, Richiardi & Sacchi, 2009).

5

The adverse economic conditions preclude the possibility of meeting new social risks, particularly the

rising structural unemployment rates, by simply increasing the decommodification efforts. Thus, most

reforms rely on social investment strategies (Morel, Palier & Palmer, 2012) and more specifically on

activation policies. Examples are numerous and include the third-way programs (New Deals) under

Labour in the UK (1997) (King & Wickham-Jones, 1999), the recently introduced Universal Credit (DWP,

2010; Smith, 2010) or the Hartz IV legislation in Germany (Fleckenstein, 2008). Overall, these activation

reforms are institutionalized to cushion the impact of the advancing liberalization of labor markets by

effectively reducing welfare state dependence and contemporaneously lowering expenditures (Giddens,

2000; Jensen, 2012; Morel, Palier & Palmer, 2012). The implication is that welfare states have been

transformed from “ securing” to “ enabling” institutions (Bonoli & Natali, 2012: 1–4; Taylor-Gooby,

2005; Torfing, 1999).

By consequence, labor market politics which once consisted of a one-dimensional conflict about the

generosity and universality of passive benefits, have evoloved to a two-dimensional structure that

includes an activation dimension (cf. Author 2013; Author & Colleague, forthcoming). Eventually, the

conflict over activation policies aims at negotiating whether the country-specific challenges should be

addressed by means of human-capital, occupational or liberal activation policies (Barbier &

Ludwig-Mayerhofer, 2004; Bonoli, 2010; Daguerre, 2007). Thus, the nature of the activation conflict can

be expected to vary depending on the labor market policy legacies.

To test the argument whether the labor market conflict is indeed two-dimensional and whether its

conflict depends on the institutional legacies of societies, I analyze five Coordinated Market Economies

(CMEs) - Denmark, Germany, France, Italy and Switzerland – that differ mainly with respect to their

activation models (most similar system design).

6

CME countries are characterized by strong horizontal coordination mechanisms and by unemployment

insurance systems that incentivize the investment in specialized skills (Hall & Soskice, 2001; Estevez-Abe,

Iversen & Soskice, 2001). Whilst the Variety of Capitalism (VoC) provides a good explanation for

institutional equilibria, it is less helpful in tracing reform trajectories within a particular regime. The

capability to assess change however is essential when studying political conflicts because reforms

provide insights into the issues which become controversial in different activation regimes.

At the heart of the present case selection lies Thelen’ s theory (2012) which proposes a framework that

enables researchers to distinguish between different strategies CMEs use to adapt their labor market

policies to liberalization pressures. The author distinguishes between countries which introduced

reforms leading two-tier labor markets and reforms focusing more on preserving social equality.

In the first case, labor market reforms retained the high level of labor market insider protection

(employment protection legislation) and contemporaneously allowed the market forces to operate

freely in particular segments of the economy. This dualisation of employment conditions leads to labor

market flexibilization at the margins and to increasing social inequality (Palier, 2012; Emmenegger et al.,

2012; Palier & Thelen, 2010). These inequalities, however, were not balanced by the comprehensive

introduction of activating policies as was the case in the Nordic CMEs. The countries following this

second liberalization route have in fact been able to cushion the effect of market-friendly policy reforms

with social programs that accommodate the demands of new social risk groups. Thereby, human-capital

activation policies have become the centerpiece of a strategy which successfully balances

re-commodifying and de-commodifying policies (cf. Rueda, 2007; Martin & Swank, 2012; Thelen, 2012).

Following this distinction, I allocate Denmark and Switzerland to the flexicurity model and France,

Germany and Italy to the dualizing model.

7

The legitimacy of this grouping is corroborated by Figure 1 which shows that flexicurity countries have a

high level of passive spending, a very flexible labor market (low employment protection) and a low level

of problem pressure (total number of unemployed individuals). Conversely, a distinctive feature of

dualizing countries is their extremely high levels of employment protection legislation for the primary

labor market, whereas labor market outsiders suffer from precarious employment conditions (Berton,

Richiardi & Sacchi, 2009; Palier & Thelen, 2010; Palier, 2010 Emmenegger et al., 2012). Moreover, even

though these countries spend as much on passive policies as a whole (as indicated by the size of the

circles), the level of problem pressure is conspicuously higher than in the flexicurity countries and hence

results in a comparatively smaller amount of spending per unemployed individual.

Figure 1: Employment protection legislation, government expenditure for passive labor market policies

and problem pressure

8

Aside from the flexibility of their labor market regulation, the level of problem pressure and the

generosity of passive benefits, these regimes differ with respect to the nature of their activation policies

(Barbier & Ludwig-Mayerhofer, 2004; Barbier & Fargion, 2004; Daguerre, 2007). Whilst the Nordic

activation measures concentrate on enhancing the human-capital of the unemployed, the liberal variant

is characterized by so-called work-first measures3 and the continental solution is based on an

“ occupational” strategy.

Bonoli (20104) summarizes these differences by means of a typology that captures the degree of

human-capital and “ pro-market” orientation. Similarly to Barbier and Ludwig-Mayerhofer (2004), he

argues that in the Anglo-Saxon countries5, the focus was laid on reinforcing coercion so as to prevent

welfare state dependency. Contemporaneously, these liberal countries keep human-capital investment

rather low. In the Nordic countries the activation policies are instead in line with the social investment

framework which relies on up-skilling and employment assistance (cf. Jensen, 2012). Finally, the

continental welfare states have a tradition of “ occupational” ALMPs which aim at keeping the

unemployed occupied mainly by short-time work while failing to systematically invest in their skills.

Hence, these measures focus primarily on retaining the unemployed’ s social networks (cf. Barbier &

Fargion, 2004; Daguerre, 2007). In a nutshell the characteristics of ALMPs differ fundamentally

depending on the labor market regime a country belongs to.

3 Work-first measures stress the need to swiftly re-introduce workers into the labor market principally by means of (negative)

incentives. 4 Bonoli (2010) proposes four ideal-typical ALMPs. The first is the occupational, which comprehends policies such as the

creation of public jobs and which is characterized by a low “pro-market employment orientation” and weak level of human

capital investment. The other three categories share a high pro-market orientation but diverge in terms of human capital

investment. First, there are schemes fostering the swift reintroduction of the unemployed into the labor market by means of

incentives but without investing in their skills (cf. time limits on recipiency, benefit reductions and conditionality). Second, there

are measures with a medium level of human capital investment, which assist the unemployed in looking for a job (counselling,

job search programs or job subsidies). Finally, there are up-skilling policies with a high pro-market orientation and a high degree

of human capital investment (job-related vocational training). 5 According to the Varieties of Capitalism (VoC) the Anglo-Saxon countries correspond to the Liberal Market Economies (LMEs).

9

Obviously, each regime is characterized by a particular mix of policies. Since these inherently belong to

the country’ s activation strategy repertoire these are less controversial than measures which are “ alien

to the system” . Hence, the expectation is that controversial policies determine the labor market policy

conflict.

Drawing on the theory presented above, I hypothesize that the labor market policy conflict is structured

by a state/market and an activation conflict in all countries (H1). Moreover, I hypothesize that the

activation conflict in the different regimes is determined by those policies which are controversial. The

dualizing regime is characterized mainly by short-time work schemes but lacks up-skilling and (coercive)

reintegration measures. Instead, the flexicurity countries have well-established training and incentive

schemes, whilst short-time measures are rarely implemented (especially in Denmark). Accordingly, I

expect that short-time work in Italy, France and Germany is uncontroversial and hence does not

determine the labor market policy conflict in these countries, whereas this is the case for training and

incentive-based reintegration measures in Denmark and Switzerland (H2).

Actor constellations in the labor market policy space

Regime-specific differences in activation conflict are, in turn, likely to determine different actor

preferences and coalition dynamics. Thus, I expect that the actual preferences of actors belonging to the

same party or actor family diverge depending on labor market policy legacies. For instance, it is

dysfunctional for social democratic parties to advocate increasing passive benefits in countries where

the replacement rates are already generous. Similarly, it is not conductive for liberal parties to insist on

liberalizing measures where employment regulations are already flexible.

10

In the following, I derive hypotheses on the regime specific coalition patterns. Thereby, I concentrate on

the most influential actors in the decision-making process, i.e. parties, unions, employers’ associations,

state bodies and social movement organizations (SMOs)6.

As shown in Table 1, depending on the legacies, similar political actors display different economic and

activation preferences. Particularly, social democrats can be expected to be located either in the

traditional left or the third way coalition depending on whether one considers the flexicurity or the

dualizing regime.

Table 1: Expected coalition composition in flexicurity and dualized labor markets

Economic dimension

Activation

dimension

State Market

Pro

activation

MODERN LEFT

THIRD WAY

- greens

- communists

- white collar unions

- social movement organizations

Flexicurity

- social democrats

- state bodies

- administration

- research institutes

- progressive liberals and

right-wing parties

Dualizing

- state bodies

- administration

- research institutes

- progressive liberals and

right-wing parties

Against

activation

TRADITIONAL LEFT

TRADITIONAL RIGHT

Flexicurity

- blue collar unions

Dualizing

- social democrats

- blue collar unions

- employers’ associations

- conservative government parties

6 See Table 6 and 7 for a list of the actors which were included in the analyses.

11

In the first quadrant (Table 1) I expect the modern left coalition which represents individuals with

preferences for generous passive and active labor market policies. Modern left actors foremost

represent sociocultural specialists, i.e. individuals with left-libertarian values, and labor market outsiders

(Kitschelt, 1994). Sociocultural specialists can be expected to endorse this policy strategy because of

their professional socialization. In fact, working in occupations characterized by interpersonal work-logic

(Oesch, 2006; Kriesi, 1998) sensitizes them to the needs of the unemployed and hence consolidates their

preferences for generous state intervention. At the same time, these above-average educated

individuals7 recognize that in a knowledge society the demand for skilled workers is the biggest obstacle

for the unemployed to be re-employed. A problem that can be best addressed by re-training measures

linked to adequate passive benefits.

In theory all left-oriented political actors could be expected to favor such extensive welfare state

engagement. However, in the light of constraints due to fiscal and budget austerity, not all left actors

may be in a position to pursue this kind of strategy. I expect foremost green parties, social movement

organizations, white-collar unions and left opposition parties (e.g. communists) to advocate modern left

policy packages because they are not in government and hence do not have budget responsibility.

Conversely, I do not expect social democratic parties to belong to this coalition because as mainstream

parties they compete for government responsibility. Thus, they are likely to refrain from proposing to

increase activation effort for new risk groups without making cuts in other social policy areas. Hence,

particularly in times of economic crisis, social democrats face the choice between accommodating the

new or the old social risks, whilst keeping the status quo for the other group.

In the bottom left quadrant I locate the traditional left coalition. This coalition focuses above all on

passive benefits and job-security regulations. Since overwhelmingly labor market insiders benefit from

7 These left-libertarian individuals have been shown to be particularly likely to vote for social democratic and

green parties (Kitschelt 1994; Kriesi 1998; Geering and Häusermann 2013).

12

such policy schemes, I expect this strategy to be adopted mainly by blue-collar unions and social

democratic parties who represent the insiders (Rueda, 2007). The incentives to foster their core

electorate’ s interests are clearly higher in countries where they are still affected by suboptimal

protection and are well organized. Thus, social democratic parties in dualized countries should refrain

from diversifying their policy offer to accommodate new social risks8, and focus on “ traditional left”

strategies instead.

On the contrary, I expect social democrats to propose third-way policies in regimes where traditional

social risks, i.e. the insiders’ interests, are already accommodated. In such regimes social democrats are

in a position to address new social needs by proposing activation measures and, where necessary, even

reallocate resources from traditional to new risk schemes. Accordingly, in flexicurity countries where the

insiders are well protected and do not fear (massive) cuts, both insiders and outsiders should have

similarly strong preferences for increasing the activation effort (Emmenegger, 2009) whilst maintaining

the status quo on passive benefits. Although in these countries activation offers are not essential for

insiders, these are nonetheless a backup in case of need. Thus, it is not surprising that in flexicurity

countries social democratic parties do not exclusively target labor market insiders in electoral campaigns

(Schwander, 2013).

The third-way coalition located in the top right quadrant favors increasing activation effort combined

with an above-average market orientation. Besides social democrats (in the flexicurity regimes),

government authorities, public administrations and progressive liberal or right-wing parties are likely to

endorse this policy package. In fact, these actors are the most likely to be influenced by the

supranational consensus, which combines the neoliberal insistence on balancing the budget with the

idea that a quick provision of labor market access is essential for reducing unemployment levels

8 These above all are particularly hard to mobilize since these groups are extremely heterogeneous (Bonoli 2005).

13

(Daguerre & Taylor-Gooby, 2004; Stiller & van Gerven, 2012). Furthermore, it is plausible to assume that

highly skilled workers, who are less likely to become unemployed, and individuals employed in technical

jobs9 prefer a less costly welfare state, and hence from a rational-choice perspective endorse

reductions in welfare spending and increasing re-commodification effort (Oesch, 2006).

Finally, in the traditional right coalition (bottom right quadrant) I expect to find primarily employers’

organizations and conservative/right-wing mainstream parties. These actors consider the current level

of welfare support to be high enough and thus give priority to budgetary rigor over any kind of welfare

expansion (Esping-Anderson, 1990). As argued by Huber and Stephens (2001), particularly

right-wing/conservative parties are characterized by preferences for subsidiarity and self-reliance, and

hence can be expected to dismiss not only an expansion of passive but also of active welfare effort (cf.

Miles & Quadagno, 2002).

Operationalization and methods

To analyze the implications of the “ activation turn” on labor market politics I rely on novel interview

data which was collected in Denmark, France, Germany, Italy, UK and Switzerland in autumn 2010. The

dataset is based upon semi-structured telephone interviews with the major policy-makers10 who are

active in the domain of labor market policy, i.e. parties, unions, state bodies, administrations and social

9 These jobs do not follow a pro-social or client centered work logic and hence entail more conservative and

market-friendly attitudes as compared to the sociocultural specialists. 10

Our NCCR-Democracy P11 research team originally contacted 161 political actors in the six countries. In the present analysis I

rely exclusively on the data collected in the first of the two interview rounds of our elite surveys. In total we were able to obtain

109 interviews in October 2010 (first round) and 118 in December 2010 (second round) (please refer to Table 5 in the

appendix for the response rate). We encountered severe difficulties in obtaining interviews in Italy and the UK. In particular,

we were able to reach just one employers’ organization in Italy (even though the most relevant one) and had no opportunity to

speak to a representative of the administration in the UK. In contrast, in Switzerland and in Germany the political actors were

very cooperative and we faced no problems in scheduling interviews at all. Finally, in Denmark and France we encountered

problems in particular with representatives of public administration, right-wing parties and employer’s associations.

14

movement organizations (SMOs).11 This kind of interview data is best suited to analyse the political

conflict structure because it allows assessing the underlying preferences of political actors

independently of possibly idiosyncratic, very specific and/or limited political reform processes (cf.

Häusermann 2010). Moreover, the precision of the questions we proposed to our interview partners

allows for a more accurate analysis of the conflict dimensionality as compared to data which relies on

very broad categories such as the Manifesto Data Collection (Manifesto Project MRG/CMP/MARPOR).

Furthermore, I was interested in measures which are able to capture both the political actors’

preferences with respect to policy measures (position measure) and their perception of the relative

importance of a particular policy measure (salience measure). Accordinlgy, Manifesto Data would be

inadequate because they provide merely measures of salience rather than of position. Due to the

shortcomings of the commonly used datasources we hence engaged in the collection of a more direct

and precise measure of position and salience. I rely on several items of our questionnaire to

operationalise the labor market policy conflict structure. In more detail, only those items were included

which are theoretically best suited to capture the economic dimension (state/market) and the different

activation models (Nordic and occupational). I also was careful to choose those items which best allow a

discrimination between the different actors’ positions, i.e. which have the largest possible variance.12

Nine preference measures meet these requirements (cf. Table 8). In detail, I operationalise the

economic conflict by means of three indicators capturing the generosity of passive benefits and the

degree to which the state engages in regulating social policy. The first item refers to the creation of

11

Interview partners were chosen as representatives of the major decision-making organizations who are experts in the field

of unemployment policy within the specific organizations. The relevance of the organizations included in the analyses was

cross-checked with two experts per country and validated by means of media analyses (see Kriesi et al. 2014). 12

I hence excluded items which were too generally formulated to capture specific labor market preferences ( “social inequality

should be reduced”) or uncontested items ( “solidarity with the unemployed should be increased”) and which accordingly do

not represent a political conflict ( see Tables 9 and 10 in the appendix for descriptive statistics).

15

public jobs.13

Especially in southern welfare states, the expansion of public employment is a way of

preventing unemployment and is associated with a generous leftist assistance to the unemployed. The

second corresponds to a state-led intervention to guarantee decent living standards to workers (raising

the minimum wage).

To operationalise the market orientation of the generosity conflict, I rely on an item capturing

preferences for unemployment benefit retrenchment and one aiming at “ increasing sanctions when an

unemployed person refuses a job which is deemed appropriate” . This second item captures a slightly

different form of generosity since non-compliance with activation requirements is sanctioned by

monetary disincentives such as freezing or reducing cash transfers (Clasen & Clegg, 2011; Kemmerling &

Bruttel, 2006; Trickey & Walker, 2001). Finally, two items operationalise preferences for lower and more

flexible employment protection (“ loosening of the hire-and-fire legislation” and “ increasing

working-hours flexibilization” ).

13

For the exact question wording, see Table 8 in the appendix.

16

Table 2: Operationalization of the conflict dimensions characterizing labor market policy

State Market

Economic conflict 1) The use of state programs to create

jobs (statejob)

2) Raising the minimum wage

(minwage)

3) Tougher sanctions for those who

refuse to accept an appropriate job

(sanction)

4) Reduction of unemployment

benefits (reducbenef)

5) Flexibility of working hours

(workhours)

6) Loosening of hire and fire legislation

(hirefire)

Pro activation Contra activation

Activation conflict Type 1: Human-capital activation

7) More retraining possibilities for the

unemployed (training)

8) Promotion of labor market

reintegration (reintgr)

Type 2: Occupational activation

9) The promotion of short-time work

(shorttime)

(Same items)

The activation strategies are operationalized by means of three questions. The human-capital activation

strategy is captured by the promotion of training and by the effort to reintegrate the unemployed in the

labor market by means of activation measures (“ reintegration” ). The occupational model instead relies

foremost on the retention of individuals in the labor market by means of short-time work (Sacchi et al.,

2011, Estevez-Abe et al., 2001; Thelen, 2001).

To test the first hypothesis and assess the dimensionality of the political space I conduct an exploratory

factor analysis with varimax rotation14

. Thereby, I include the nine items shown in Table 215

. For each

14

Missing cases were recoded as neutral both in position and salience; fortunately they only represent between 2 and 5%. 15

The non-governmental organization Attac Germany was excluded from the analyses because it proved to be an outlier in

the pooled model including all actors. Since this organization is only of minor importance in this policy domain, its exclusion

seems to be legitimate.

17

item, I constructed an indicator which takes into account both the actor’ s position on a given measure

and the salience of the measure for the actor16

.

To assess the stability of the actor constellation, three different types of checks were run. First, the

analyses were re-run only with parties and social partners (unions, employers’ associations) and state

bodies since these actors are the most influential players and hence can be expected to decisively shape

the labor market policy conflict. Moreover, the analyses were performed without issue salience

weightings and for each country separately.17

These additional analyses show that the actor

constellations are stable.

Analyses

First, I test whether a two-dimensional labor market policy space can be found in all five countries

included in the study. To this aim I show the pooled analysis including all 108 political actors (excepting

Attac Germany) in a single model. As theoretically expected, Table 3 shows that the nine labor market

policy items load on two distinct factors. However, the eigenvalues clearly indicate that only the

state-market factor (column 1) forms a strong homogeneous scale (eigenvalue 2.34), whilst the

elements on the activation dimension reach an eigenvalue of only 0.53 (column 2).

16

The combined indicator was developed by multiplying standardized salience and position for each actor. This strategy, which

involves weigting position by salience, gives less weight to positions on measures which the actor considers irrelevant and

allows the most significant conflicts to be captured. In fact, while political actors tend to have a stance on all issues, they may

judge them differently in terms of relevance. To capture the fundamental political conflicts it is hence pivotal to focus only on

those issues which are salient. An actor’s position on a given policy measure is gauged on a scale ranging from 1 to 5 (strongly

disagree - strongly agree). For the operationalization of a measure’s salience, I asked the respondents to indicate the most

important measure on the list that was submitted to them, the three most important measures, and the three least important

measures. The resulting salience indicator allocates three points to the most important measure, two points to the other two

important measures, zero points to the three least important measures and one point to the remaining ones. 17

See Tables 11 and 12 in the appendix.

18

Table 3: Pooled factor analysis (all countries)

Items* State/market Activation

Sanction 0.57 -0.03

Reduc. benefit 0.57 -0.06

Work-hours 0.67 -0.09

Hire-fire 0.47 0.04

Minimalw -0.70 0.05

State job -0.66 0.14

Training -0.31 0.41

Short-time -0.03 0.37

Reintegration -0.08 0.43

Eigenvalue 2.34 0.53

N 108* 108*

*Attac Germany was excluded from the sample

This finding18

, however, is consistent with my argument that different activation conflicts should be

expected depending on the labor market legacies of a regime. Accordingly, only when conducting

regime-specific analyses do I expect to find an adequately strong regime-specific second factor. The

activation factor should thus be characterized by functionally equivalent activation policies depending

on the regime characteristics. Hence, to unveil the differences in the second conflict dimension in Table

4, I present the results of the regime-specific factor analyses. In line with the first hypothesis (H1) I can

empirically corroborate that the political conflict in Western Europe circles around two types of labor

market strategies, namely passive and active policies and but that the precise conflict configuration

differs19

.

18

To interpret the findings of the factor analyses it is useful to consider that variables load strongly on a factor

when these contribute to discriminating between the observations (in this case the political actors). Accordingly, a

high factor loading is an indication that a policy is highly controversial. 19

The decision to analyze flexicurity and dualizing regimes separately is supported by the country-specific solutions presented

in Table 11 and 12, which unveil that the conflict structure is rather similar for the countries belonging to the same regime,

even though smaller deviations do appear, in particular for Germany.

19

Table 4: The factor state/market and the activation by regime

Flexicurity Dualized

Items Denmark and Switzerland Germany*, France and Italy

State/market Activation State/market Activation

Sanction 0.52 -0.23 0.58 -0.09

Reducbenef 0.71 -0.07 0.51 -0.26

Workhours 0.46 -0.33 0.71 -0.13

Hirefire 0.46 0.03 0.55 -0.16

Minimalw -0.53 0.22 -0.76 -0.05

Statejob -0.31 0.61 -0.72 -0.02

Training -0.11 0.48 -0.30 0.40

Short-time 0.00 0.59 0.20 0.35

Reintegration -0.09 0.22 -0.02 0.66

Eigenvalue 2.12 1.21 2.71 1.95

N 40 40 67 67

*Attac Germany was excluded from the sample

Turning to the details of the findings summarized in Table 4, increasing sanctions, reduction of benefits,

flexibilising working-hours, hire-and-fire regimentation and increasing the minimum wage determine the

state/market factor. For this first factor, the regime specific variation is marginal, and concerns only the

magnitude of the loadings and the allocation of the item “ public job creation” which in the flexicurity

countries pertains to the activation dimension rather than to the state/market conflict.

While the composition of the economic factors is consistent across the regimes, the activation

dimension is regime-specific. I find that in the flexicurity countries, the loadings for training and

reintegration are rather low, which means that these programs are less controversial This

uncontestedness supports the expectation that measures which are part of the regimes’ labor market

policy tradition are less contested than “ alien” ones. Hence, the undisputedness of active reintegration

and training programs points to the strong human-capital orientation of flexicurity countries.

20

Conversely, policies which do not pertain to this repertoire (public job creation and short-time work)

polarize more and hence display higher factor loadings.

In the dualizing regimes, instead short-time work results to be the least controversial policy instrument.

This is not surprising since it is the standard solution governments implement to address unemployment

particularly in times of crisis (Sacchi, Pancaldi & Arisi, 2011). Conversely, and mainly because of the

virulent insider-outsider debate that characterizes dualizing countries, measures addressing active

reintegration - particularly of the labor market outsiders - are highly contested. The reason why

reintegration measures for outsiders are debated is that – particularly in times of austerity - welfare

policy resembles a zero-sum game, where an expansion of outsider-friendly policies often disadvantages

the insiders. Finally, also “ training” is hardly implemented in dualizing countries. Since this approach

proves effective in the Nordic context, political actors seem to debate and partially disagree on their

implementability, which leads to a moderate loading of 0.4.

In a nutshell, the expectation that policies which are uncharacteristic for a regime, are particularly

subject to controversies and by consequence heavily determine the political contest, can be

corroborated. First, I found that the structure of the economic dimension is rather consistent between

the different countries, whilst the activation conflict is clearly regime specific. Second, the composition

of the activation dimension closely mirrors the debates over policy measures which are atypical for the

specific regime. Conversely, policies that are well-anchored in a country do not drive the political

conflict. Accordingly, political actors in regimes with strong human-capital activation and already flexible

labor markets debate the utility of short-time work, whereas regimes that apply short-time work

wonder whether training and reintegration policies might be the better alternatives.

21

The actor constellations in the labor market policy space

Flexicurity countries

After describing the labor market conflict patterns let us now analyze the political actors’

preference-based coalition patterns. Figure 2 and 3 show the positioning of parties, employers’

associations, unions, SMOs, state bodies and the administration in the labor market space. The

coalitions correspond to the quadrants which result from the state/market and the regime-specific

activation factors which were presented above.

In the first quadrant we find the modern left coalition, which is composed by actors who support both

increasing activation effort and increasing state intervention. The actors located in the third way

quadrant share a strong activation orientation but endorse market-liberal policies on the economic

dimension. The remaining two coalitions both oppose an expansion of activation policies. However,

whilst the traditional left coalition is strongly in favor of state intervention, the right coalition is for

retrenchment on both the activation and the economic dimensions.

22

Figure 2: Actor configuration in the flexicurity countries (Denmark and Switzerland)

Legend

Denmark: Unions: AC Akademikernes Centralorganisation, FTF Confederation of Professionals, LO Confederation of trade

unions; Employers’ organizations: DA Confederation of Danish Employers, DI Confederation of Danish Industry; Parties: SD

Social Democrat party, Venstre Liberal Party, DF Dansk Folkepartis, KF Konservative Folketsparti, RG Red-Green Alliance, SF

Socialist Folkeparti; Administration: NLMA National Labor Market Authority, DEC Economic Council, advisory board to the

government; NGOs, Charities and Think-tanks: SFI Danish national center for social research, ECLM Economic Council of

labor movement, CEPOS Conservative think-tank.

Switzerland: Unions: Unia Unia, KV Kaufmännischer Verband Schweiz, Syna Syna Arbeitslosen Kasse, AS Angestellte

Schweiz, SGB Scherizerischer Gewerkschaftsbund, TS Travail.Suisse, Gewerkschafts-dachorganisation; Employers’

organizations: SBV Dachverband Schweizerischer Baumeisterverband, SGV Schweizerischer Gewerbeverband, SAV

Schweizerischer, Arbeitgeberverband, Swissmem Swissmem; Parties: Gruene Grüne Partei Schweiz, FDP Freisinning

Demorkatische Partei, die Liberalen, SVP Schweizerische Volkspartei, CVP Christlichdemokratische Volkspartei, BDP

Bürgerlich Demokratische Partei, SP Sozialdemokratische Partei; Administration: BE Canton Bern, AG Canton Argau, SODK

Conference of the cantonal social ministers, SECO State Secretary for Economic Affairs; NGOs, Charities and Think-tanks,

Caritas Caritas Switzerland, Attac Attac Switzerland, NGO, Kabba NGO on behalf of the unemployed, AvS Avenir Suisse

Figure 2 shows that the modern left coalition in the flexicurity regime is composed of several unions,

namely the Swiss confederation of trade unions (SGB), the Swiss union Travail Suisse and Unia, the Swiss

union of professionals (KV), and the Danish union federation LO. Moreover, we find the coordinating

23

organ of the Swiss cantons (SODK), a Swiss SMO (Caritas), and the Danish Red-Green alliance as well as

the Danish green-socialist party (SF).

This composition supports rather well the hypothesis that in flexicurity countries foremost the greens

and political actors without government responsibility endorse policies aiming at expanding

redistribution and activation. All these actors hence endorse the strengthening of activation measures

beyond the traditional repertoire to include measures such as short-time work and public job creation to

complement the mainly human-capital focused activation strategy. Hence, this finding supports the

hypothesis whereby actors without government responsibility can afford to suggest expansive reforms

irrespective of the adverse economic context.

In the lower left quadrant we find the traditional left coalition. This coalition is characterized by a

moderately skeptical attitude towards non-standard activation policies and by a more or less clear

endorsement of state intervention. The Swiss SMOs Attac and Kabba, and the Danish white-collar union

FTF clearly endorse increasing state intervention and are located on the left extreme of the state/market

dimension. Whilst still part of the traditional left coalition, the Swiss state actors (e.g. the cantons

Aargau and Berne), the State Secretary for Economic Affairs (SECO), its Danish pendant (NLMA), and the

Danish Folkeparti (DF) take a more moderate stance on the economic dimension.

This left coalition includes actors who by tendency endorse generous welfare benefits but disagree on

the necessity to introduce additional and untypical activation policies such as short-time work and public

job schemes. This is not surprising since to a large extent these unions represent white-collar workers

who profit more from training-related activation than from short-time work. Swiss state bodies instead

can be expected to reject activation expansion in order to contain public spending.

24

These findings thus clearly contradict the hypothesis that state bodies and administrations in Denmark

and Switzerland endorse a third-way strategy because of their contact with international and

supranational bodies of experts. On the contrary, I find that state bodies and administrations are rather

skeptical of expanding the activation repertoire and overall are oriented towards preserving the

status-quo.

The third way coalition is composed of the social-democratic parties, the Swiss Greens, the Swiss

white-collar employees (AS), the Swiss employers’ organizations (SGV), and the Danish Economic

council (ECLM), which is an advisory board to the labor movement. These organizations are strongly in

favor of additional activation policies but for the preservation of the status-quo in terms of passive

welfare effort. In this group we notice a clear outlier, namely the Swiss Christian-Democratic Party

(CVP), who is favorable to a substantial liberalization and contemporaneously for an above average

strengthening of the activation effort.

The composition of the third way coalition sustains the hypothesis that where welfare states address

traditional risks efficiently, social democratic parties are able to turn towards groups who are newly at

risk. Hence, in the flexicurity countries these parties canfocus on the interests of the labor market

outsiders who could be reintegrated in the labor market by means of public job creation schemes. But

also industrial production workers - who in a post-industrial setting are under pressure from

international competition and outsourcing - strongly profit from short-time work schemes.

As expected, the traditional right coalition is composed mainly of the employers’ organizations

(Swissmem, SBV in Switzerland and the DI, DA in Denmark), and conservative parties (the Swiss

Peoples’ Party, the Danish Conservative party) and the conservative think-tanks (CEPOS and Avenir

Suisse). All these actors share a pronounced market-liberal stance but differ widely in the degree to

which they oppose additional activation policies. Finally, there is a moderate sub-group of traditional

25

right actors, namely the Swiss conservative democrats (BDP), the Swiss liberal party (FDP), the Danish

liberal party (Venstre) who, in economic terms, favor the status-quo. Overall, the actor constellation in

Denmark and Switzerland suggests that in countries where welfare state benefits are generous and

contemporaneously problem pressure in terms of unemployment level is comparatively low20

, actors

facing government responsibility are less likely to endorse an expansion of passive and active effort.

20

In 2010 the youth unemployment (as percentage of the youth labor force) for Denmark reached 13.8% and in Switzerland

7.2%. As compared to the UK (19.1%), Italy (27.9%) and France (22.5%) these figures are moderate. The only exception to this

pattern is Germany with just 9.7% youth unemployment. The low level of problem pressure can be underpinned also with

figures for long-term unemployment (as percentage of the unemployed). In 2010 Denmark this was 19.1% and in Switzerland

34.3%. Compared to France (40.1), Germany (47.4) and Italy (48.5) this again indicates a good performance on the part of the

Swiss and Danish labor markets. Only the UK has similarly low levels of long-term unemployment (32.6%) (Source: OECD key

tables 2010).

26

Dualisation countries

Figure 3: Actor configuration in the dualizing countries (Germany, France and Italy)

Legend

France: Union: Solidaires Solidaires, UNSA Union nationale des syndicats autonomes, CFECGC Confédération française de l'encadrement,

CFDT Confédération française démocratique du travail, CFTC Confédération Française des Travailleurs, CGT Confédération générale du

travail, FSU Fédération syndicale unitaire; Employers’ organizations: CGPME Confédération Générale des Petites et Moyennes Entreprises,

MEDEF Mouvement des entreprises de France, UNAPL La confédération interprofessionnelle des professions libérales, UPA Union

Professionelle Artisanale; Parties: UMP Union pour le Mouvement Populaire (UMP), PS Parti Socialiste, FN Front National, PCF Parti

Communiste Français, LO Lutte Ouvrière, NPA Nouveau Parti Anticapitaliste, FO Force Ouvrière, EELV Europe Ecologie Les Verts;

Administration: MDT Ministère du Travail; NGOs, Charities and Think-tanks: AC! Agir contre le Chômage!, APEIS Association Pour l'Emploi,

l'Information et la Solidarité, CNPE Comité national des privés d'emploi CGT, MNCP Mouvement National des Chômeurs et Précaires, SNC

Solidarités nouvelles face au chômage

Italy: Unions: COBAS Confederazione dei Comitati di Base, UIL Unione Italiana del Lavoro, CISL Confederazione Italiana Sindacati dei Lavoratori,

CIGL Confederazione Generale Italiana del Lavoro; Employers’ organizations: Conf Confindustria; Parties: PD Partito Democratico, SEL

Sinistra Ecologia e Libertà, UdC Unione di Centro, PdL Popolo della Libertà, Lega Lega Nord, IdV Italia dei Valori, PdCI Comunisti italiani, PRC

Rifondazione Comunista; Administration: MdL Ministero del Lavoro, INPS Istituto Nazionale Previdenza Sociale; NGOs, Charities and

Think-tanks: ISFOL Istituto per lo Sviluppo della Formazione Professionale dei Lavoratori, ACLI Associazioni Cristiane Lavoratori Italiani

(ACLI, patronato CISL), ALVP Movimento Associazione Lavoratori Vittime del Precariato, INCA Istituto Nazionale Confederale di Assistenza

(patronato CIGL), ARCI Associazione di Promozione culturale, RdC Rete della Conoscenza

Germany: Unions: KGA Koordinierungsstelle gewerkschaftlicher Arbeitslosengruppen, IGM Industriegewerkschaft Metall, Verdi Vereinte

Dienstleistungsgewerkschaft, DGB Deutscher Gewerkschafts Bund; Employers’ organizations: BDA Bundesvereinigung der Deutschen

Arbeitgeberverbände; Parties, Linke Die Linke, CDU/CSU Christlich Demokratische Union/Christlich Soziale Union, NPD

Nationaldemokratische Partei Deutschlands, FDP Freie Demokratische Partei/Die Liberalen, SPD Sozialdemoratische Partei Deutschlands,

Gruene Grüne Partei Deutschland; Administration, BKS Bundesvereinigung kommunale Spitzenverbände, BMAS Bundesministerium für

Arbeit und Soziales, BWM Bundeswirtschaftsministerium, BA Bundesagentur für Arbeit; NGOs, Charities and Think-tanks: Caritas Caritas

Deutschland, EFD Erwerbslosenforum, Attac Attac Deutschland, INSM Initiative Neue Soziale Marktwirtschaft, PW Paritätischer

Wohlfahrtsverband, Bertels Bertelsmannstiftung, IAB Institut für Arbeitsmarkt und Berufsforschung.

27

In the dualisation countries (Figure 3) the modern left coalition includes several unions (the German

unions IGM, DGB and Verdi, the French unions UNSA and CFECGC) and several SMOs (the French MNCP,

the German Paritätischer Wohlfahrtsverband and the Italian INCA and ACLI). As expected, also the

greens in Germany and France (EELV) and the (former) communists (PCF, PdCI, PRC in Italy and die Linke

in Germany) cluster in this quadrant. Thus, similarly to the finding for the flexicurity countries, it is

mainly actors who do not have government responsibility who favor expansion on both labor market

dimensions.

In the traditional left cluster we find the German and the French Socialist parties (SPD and the PS), the

left-oriented Italia dei Valori and most unions. Only the Italian confederation of trade unions (CIGL), the

Christian-democratic union (CISL) and the French CDTC belong to the third-way coalition and hence

strongly support additional activation measures. This finding corroborates the expectation that in

dualizing labor markets, social democrats do not concentrate on activation measures which favor labor

market outsiders (education and active reintegration) but stick to the traditional solution of short-time

work and focus on the needs of the insiders. Figure 3 also shows that the position of the German

socialists (SPD) tends to a centrist position on the state/market axis, which in the light of their

liberal-leaning Hartz IV reform, might not surprise after all.

The state bodies and administrations which were expected to be situated in the third-way coalitions are

consistently located in the right coalition, e.g. moderately to the right, and diverge widely on the

activation axis. Interestingly, a similar pattern has been detected for the state bodies in Denmark and

Switzerland, as well. Only the Italian Ministry of Employment and the German Ministry for Social Affairs

behave consistently to the hypotheses and are located in the third-way coalition. Hence, the hypothesis

that the conservative government parties pertain to the right coalition can be partially underpinned for

28

the dualizing countries. In fact, both the German CSU/CDU and the Italian PDL meet the expectations,

only the French UMP is situated in the third-way coalition endorsing additional reintegration measures.

Interestingly, in the dualizing countries the right coalition is extremely divided on the state/market

dimension but has a very homogeneous stance in refusing increasing human-capital activation effort.

These right-oriented actors seem thus to disagree foremost on whether employment conditions should

be liberalized further, an issue which has been pushed particularly by employers’ organizations and

government parties in the dualizing countries to countervail the rigidities of the continental welfare

states. Conversely, issues linked to activation measures seem less debated and/or relevant for the

political contest.

As expected, I was able to show that employers’ associations are consistently located in the right

coalition, that state bodies do not necessarily pertain to the third-way coalition and that unions spread

across the modern and the traditional left cluster. However, the most interesting finding is that

concerning the dualisation debate. In fact, I was able to show that social democrats pursue different

strategies depending on the labor market regime. In fact, in the flexicurity countries they consistently

accommodate the interest of the labor market outsiders by asking for more public employment and for

short-time work, whereas in the dualizing countries they focus on redistributive policies and oppose

active reintegration measures which would benefit foremost the outsiders. Hence, in the dualizing

countries social democrats accommodate their traditional and primary clientele, namely the labor

market insiders. Conversely, in the flexicurity regime social democrats accommodate foremost the

outsider - since the interests of the insiders are already accommodated by the generous and

encompassing system. By consequence, this result nicely underpins my expectations that socialist

parties should not be expected to implement exactly the same policies independently of the

institutional context they are embedded in.

29

In sum, the present analyses show that the political contest in labor market policy is two-dimensional

and revolves around a state/market axis that results to be very similar in all regimes, and an activation

axis that instead is regime-specific. Hence, I am able to support the literature arguing that activation

policies and their conflict lines differ across regimes (Bonoli, 2010; Barbier & Ludwig-Mayerhofer, 2004).

Moreover, I contribute to the debate on whether social democratic parties represent the interests of the

insiders or of the outsiders by showing that their strategy depends on labor market legacies. Thus, these

parties focus on the interests of the outsiders where the labor market policy schemes are already

generous and protect insiders adequately, whereas in the countries where unemployment policies are

marginal they foremost engage for their core clientele. In line with the argument proposed by Thelen

(2012) I suggest that “ institutional starting points” are pivotal in explaining political actors’ strategies,

reform trajectories and in the end eventually labor market politics.

Conclusion

This article analyses the structure of the labor market conflict in five CME countries and tests whether

the traditional framework of state intervention versus economic liberalism is still adequate to capture

labor market policy preferences. I argue that this is not the case since, as a consequence of the changing

socio-economic context, political actors are confronted with new social risks and hence adapt their

strategies by introducing ALMPs. In fact, challenges such as long-term unemployment, in concomitance

with increased financial strain can be accommodated best by means of activation and

re-commodification policies which become the pillars of “ modernizing” welfare reforms.

In the light of the “ variety of activation” literature, I hypothesized that labor market regimes differ with

respect to the activation measures they implement and that by consequence the political contest

30

differs, too. I claim that political actors disagree foremost on those issues which are alien to the system.

Hence, whilst in flexicurity countries measures such as training are widely agreed upon as basic pillars of

the human-capital activation model, policies such as short-time work and public job creation can be

expected to be hotly debated. Conversely, I expect that political actors in dualizing countries, which

traditionally rely on short-time work to regulate unemployment, have been increasingly assessing the

necessity to widen the activation repertoire to include training and active reintegration measures.

Lastly, I test the argument according to which actors belonging to the same actor family may differ in

policy strategy depending on the institutional legacies. Focusing on social democratic parties, I am able

to corroborate the expectation that they concentrate on the labor market insiders in dualizing countries

but extend their mobilization to outsiders in flexicurity countries.

The analyses rely on a telephone survey of the major players active in labor market policy carried out in

autumn 2010 in Denmark, France, Germany, Italy and Switzerland. In the interviews with unions, parties,

state bodies, employers’ organizations and social movement organizations, the political actors

responsible for the domain of unemployment were asked to express their organizations’ position on a

battery of policy items, and in a second step to classify them in terms of saliency. I then used this

information to construct an indicator by multiplying the preference and salience score of each item. I

performed a factor analysis on these items to assess both the dimensionality of the political conflict

structure and the actor constellations.

The findings corroborate the expectation that in all countries the labor market policy space is structured

along two dimensions, namely a state/market and an activation conflict. The analyses also reveal that

whereas the economic dimension is regime invariant, the activation conflict depends on whether the

country has a flexicurity or a dualizing labor market legacy. This finding nicely underpins the theoretical

31

argument of the “ variety of activation” literature which argues that across Europe we witness

qualitatively different activation schemes.

I argued that the labor market policy preferences differ because of institutional legacies, in particular

the activation schemes. In the flexicurity countries (Denmark and Switzerland), a strong orientation

towards a generous and human-capital activation practice was expected and, I could show that the

political contention in these countries is mainly about whether it is necessary to increase state efforts in

the activation domain by means of expanding short-time work or creating employment in the public

sector. In the dualisation model, which is characteristic of France, Italy and Germany, the labor force is

split into insiders profiting from rather generous benefits and an increasing share of workers with

precarious or atypical contracts. Here, the political conflict on the second (activation) dimension was

shown to be defined by activation preferences relating to reintegration. It thus appears that policies

which are alien to the system, and hence the most controversial, drive the politics of labor market

policy. In other words, institutional legacies shape today’ s labor market politics.

32

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Appendix

Table 5: Response rates in the two waves of interviews with policy-makers per country: percentages

Response

rates

First interview

Second interview

Contacted Cooperated Cooperated

Denmark 20 16 15

Switzerland 24 24 24

Germany 25 22 21

France 27 25 25

Italy 36 22 18

Total 132 109 118

35

Table 6: Political actors in Denmark and Switzerland

Denmark Switzerland

Unions

AC Akademikernes Centralorganisation Unia Unia

FTF Confederation of Professionals KV Kaufmännischer Verband Schweiz

LO Confederation of trade unions Syna Syna Arbeitslosen Kasse

AS Angestellte Schweiz

SGB Scherizerischer Gewerkschaftsbund

TS Travail.Suisse, Gewerkschafts-

dachorganisation

Employers’ organisations

DA Confederation of Danish Employers SBV Dachverband Schweizerischer

Baumeisterverband

DI Confederation of Danish Industry SGV Schweizerischer Gewerbeverband

SAV Schweizerischer Arbeitgeberverband

Swissmem Swissmem

Parties

SD Social Democrat party Gruene Grüne Partei Schweiz

Venstre Liberal Party FDP Freisinning Demorkatische Partei, die

Liberalen

DF Dansk Folkepartis SVP Schweizerische Volkspartei

KF Konservative Folketsparti CVP Christlichdemokratische Volkspartei

RG Red-Green Alliance BDP Bürgerlich Demokratische Partei

SF Socialist Folkeparti SP Sozialdemokratische Partei

Administration

NLMA National Labour Market Authority BE Canton Bern

DEC Economic Council, advisory board to the

government

AG Canton Argau

SODK Conference of the cantonal social ministers

SECO State Secretary for Economic Affairs

NGOs, Charities and Think-tanks

SFI Danish national centre for social research Caritas Caritas Switzerland, Charity

ECLM Economic Council of labour movement (AE) Attac Attac Switzerland, NGO

CEPOS Conservative think-tank Kabba NGO on behalf of the unemployed

AvS Avenir Suisse, Think-tank

36

Table 7: Political actors in Germany, France and Italy

Germany France Italy

Unions

KGA Koordinierungsstelle gew.

Arbeitslosengruppen

Solidaires Solidaires COBAS Confederazione dei Comitati di Base

IGM Industriegewerkschaft Metall

Metall

UNSA Union nationale des syndicats

autonomes

UIL Unione Italiana del Lavoro

Verdi Vereinte

Dienstleistungsgewerkschaft

CFECGC Confédération française de

l'encadrement, Confédération

générale des cadres

CISL Confederazione Italiana Sindacati

dei Lavoratori

DGB Deutscher Gewerkschafts Bund CFDT Confédération française

démocratique du travail

CIGL Confederazione Generale Italiana

del Lavoro

CFTC Confédération Française des

Travailleurs

CGT Confédération générale du travail

FSU Fédération syndicale unitaire

Employers’ organisations

BDA Bundesvereinigung der

Deutschen Arbeitgeberverbände

CGPME Confédération Générale des

Petites et Moyennes Entreprises

Conf Confindustria

MEDEF Mouvement des entreprises de

France

UNAPL Confédération

interprofessionnelle des

professions libérales

UPA Union Professionelle Artisanale

Parties

Linke Die Linke UMP Union pour le Mouvement

Populaire (UMP)

PD Partito Democratico

CDU/CSU Christlich Demokratische

Union/Christlich Soziale Union

PS Parti Socialiste SEL Sinistra Ecologia e Libertà

NPD Nationaldemokratische Partei

Deutschlands

FN Front National UdC Unione di Centro

FDP Freie Demokratische Partei/Die

Liberalen

PCF Parti Communiste Français PdL Popolo della Libertà

SPD Sozialdemoratische Partei

Deutschlands

LO Lutte Ouvrière Lega Lega Nord

Gruene Grüne Partey Deutschland NPA Nouveau Parti Anticapitaliste IdV Italia dei Valori

FO Force Ouvrière PdCI Comunisti italiani

EELV Europe Ecologie Les Verts PRC Rifondazione Comunista

Administration

BKS Bundesvereinigung kommunale

Spitzenverbände

MDT Ministère du Travail MdL Ministero del Lavoro

BMAS Bundesministerium für

Arbeit und Soziales

INPS Istituto Nazionale Previdenza Sociale

BWM Bundeswirtschaftsministerium

BA Bundesagentur für Arbeit

NGOs, Charities and Think-tanks

Caritas Caritas Deutschland AC! Agir contre le Chômage! ISFOL Istituto Sviluppo della

Formazione Professionale dei

Lavoratori

EFD Erwerbslosenforum APEIS Association Pour l'Emploi,

l'Information et la Solidarité

ACLI Associazioni Cristiane Lavoratori

Italiani (ACLI, patronato CISL)

Attac Attac Deutschland CNPE Comité national des privés

d'emploi CGT

ALVP Movimento Associazione Lavoratori

Vittime del Precariato

INSM Initiative Neue Soziale

Marktwirtschaft

MNCP Mouvement National des

Chômeurs et Précaires

INCA Istituto Nazionale Confederale di

Assistenza (patronato CIGL)

PW Paritätischer Wohlfahrtsverband SNC Solidarités nouvelles face au

chômage

ARCI Associazione di Promozione

culturale

Bertels Bertelsmannstiftung RdC Rete della Conoscenza

IAB Institut für Arbeitsmarkt und

Berufsforschung

37

Table 8: Interview statement wording

1 State job The use of state programmes to create jobs.

2 Min. wage Raising the minimum wage.

3 Sanction Tougher sanctions for those who refuse to accept work that is deemed appropriate for

them.

4 Reduction benefit Reduction of unemployment benefits.

5 Work-hours Flexibility of working hours.

6 Hire-fire Loosening of hire and fire legislation.

7 Training More retraining possibilities for the unemployed.

8 Short-time The promotion of short-time work – the ability of employers to reduce workers hours

when orders are low.

9 Reintegration Reintegration in the labour market should be actively promoted.

Table 9: Correlation table

Sanction Red. ben Work-hours Hire-fire State job Min. wage Training Short-time

Sanction 1.00

Reducbenef 0.53 1.00

Workhours 0.29 0.26 1.00

Hirefire 0.28 0.24 0.35 1.00

Statejob -0.36 -0.41 -0.39 -0.27 1.00

Minimalw -0.31 -0.29 -0.52 -0.28 0.50 1.00

Training -0.19 -0.12 -0.18 -0.07 0.29 0.23 1.00

Shorttime -0.02 -0.05 -0.09 0.09 0.10 0.01 0.18 1.00

Table 10: Descriptive statistics all countries

Variable Mean St.dev. Min. Max.

1 Statejob 0.22 0.43 -1.00 1.00

2 Minimalw 0.24 0.39 -0.66 1.00

3 Sanction -0.01 0.31 -1.00 1.00

4 Reducbenef -0.13 0.29 -1.00 1.00

5 Workhours 0.37 0.35 -0.33 1.00

6 Hirefire 0.44 0.34 -0.5 1.00

7 Training 0.16 0.31 -0.33 1.00

8 Shorttime 0.07 0.28 -0.33 1.00

9 Reintegr -0.07 0.27 -0.66 1.00

Notes: N = 108 (Attac Germany has been excluded from the analyses)

38

Table 11: First factor by country: state versus market

Flexicurity Dualised

Items Denmark Switerzland Germany France Italy

Sanction 0.61 0.58 0.57 0.77 0.77

Reducbenef 0.54 0.71 0.11 0.71 0.34

Workhours 0.46 0.55 0.77 0.86 0.42

Hirefire 0.74 0.42 0.03 0.83 0.35

Minimalw -0.48 -0.64 -0.83 -0.82 -0.65

Statejob -0.39 -0.23 -0.48 -0.73 -0.76

Training -0.83 0.12 -0.78 -0.27 -0.06

Shorttime 0.19 -0.04 -0.03 0.32 0.05

Reintegr -0.23 -0.11 -0.10 -0.03 0.04

Eigenvalue 2.58 1.81 2.47 3.90 2.02

Expl. var. 49.69 52.21 45.73 77.69 49.38

N 16 24 20* 25 22

*Attac Germany was excluded from the sample

39

Table 12: Second factor by country: pro/contra activation

Flexicurity Dualised

Items Denmark Switerzland Germany France Italy

Sanction -0.30 -0.20 -0.19 0.16 -0.16

Reducbenef -0.46 0.06 -0.49 -0.09 -0.51

Workhours 0.19 -0.49 0.07 -0.08 -0.13

Hirefire 0.00 0.14 -0.16 -0.21 -0.17

Minimalw 0.25 0.16 0.28 -0.16 -0.28

Statejob 0.73 0.63 0.65 -0.24 0.00

Training 0.09 0.56 0.15 0.32 0.57

Shorttime 0.72 0.70 0.25 0.42 0.44

Reintegr 0.05 0.25 0.72 0.72 0.78

Eigenvalue 1.45 1.59 1.41 0.96 1.53

Expl. var. 27.93 46.34 25.97 19.10 37.32

N 16 24 20* 25 22

*Attac Germany was excluded from the sample