a leap forward or a ride on a carousel?

3 A leap forward or a ride on a carousel? ILSE JULKUNEN This article discusses and examines the potential of an active labour market policy in contributing to young people’s integration into paid work or education. It is based on a comparative study of a total of 7 800 young unemployed people in five countries: Finland, Denmark, Iceland, Norway and Sweden.’ There are many problems involved in exploring the potential of active labour market policies. First, the measurable outcomes are difficult to establish. Are we content with having wage labour as the critical hallmark of integration, or do we need more sophisticated measurements? Secondly, labour market schemes vary on local, national and cross-national levels when it comes to structures and approaches, and therefore we are not sure if we are comparing like with like. Thirdly, from a comparative perspective, the outcomes need to be contextualised in the different labour market conditions in the various Nordic countries. The labour market context in the Nordic countries It is evident that the current labour market situation strongly affects the chances of integration into working life. In 1995 - the first year of our study- Finland and Sweden showed an increase in the work force for the first time since the recession in the early 1990s (Employment Outlook, 1996). Similarly, Norway, Iceland, and even Denmark to a certain extent, had shown an increase, but earlier in the decade. This favourable labour market development continued in 1996, with the exception of Sweden, where unemployment rose and employment declined. Large differences in employment levels remained, however.-’ 2 Compared to Europe, unemployment is rather a new phenomenon in Scandinavia, but there are also differences between the Nordic countries. The unemployment situation in Denmark and Norway differs from that in the other Nordic countries on one essential point: these countries experienced an increased unemployment before the recession in the 1990s. The unemployment level in Denmark rose considerably after the second oil crisis at the beginning of the 1980s. This recession was delayed in Norway due to its oil boom, but even here there was a sharp increase in the unemployment level after 1985, and it has been rising particularly among young at University of Helsinki on October 22, 2015 you.sagepub.com Downloaded from

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A leap forward or a rideon a carousel?

ILSE JULKUNENThis article discusses and examines the potential of an active labour market policy incontributing to young people’s integration into paid work or education. It is based ona comparative study of a total of 7 800 young unemployed people in five countries:Finland, Denmark, Iceland, Norway and Sweden.’

There are many problems involved in exploring the potential of active labourmarket policies. First, the measurable outcomes are difficult to establish. Are wecontent with having wage labour as the critical hallmark of integration, or do we needmore sophisticated measurements? Secondly, labour market schemes vary on local,national and cross-national levels when it comes to structures and approaches, andtherefore we are not sure if we are comparing like with like. Thirdly, from a

comparative perspective, the outcomes need to be contextualised in the differentlabour market conditions in the various Nordic countries.

The labour market context inthe Nordic countries

It is evident that the current labour market situation strongly affects the chances ofintegration into working life. In 1995 - the first year of our study- Finland and Swedenshowed an increase in the work force for the first time since the recession in the early1990s (Employment Outlook, 1996). Similarly, Norway, Iceland, and even Denmark toa certain extent, had shown an increase, but earlier in the decade. This favourablelabour market development continued in 1996, with the exception of Sweden, whereunemployment rose and employment declined. Large differences in employmentlevels remained, however.-’ 2

Compared to Europe, unemployment is rather a new phenomenon in Scandinavia,but there are also differences between the Nordic countries. The unemploymentsituation in Denmark and Norway differs from that in the other Nordic countries onone essential point: these countries experienced an increased unemployment beforethe recession in the 1990s. The unemployment level in Denmark rose considerablyafter the second oil crisis at the beginning of the 1980s. This recession was delayedin Norway due to its oil boom, but even here there was a sharp increase in theunemployment level after 1985, and it has been rising particularly among young

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people since 1987 (Halvorsen & Nlarklund, 1993). The unemployment situation inthe Nordic countries can be differentiated by using two dimensions: unemploymenthistory and unemployment level. Unemployment history can be divided into shortand long-term experience. Short-term experience refers to the increased

unemployment level mainly after the recession of the 1990s, whereas long-termexperience refers to an increase in the level since the second oil crisis. The currentnational unemployment levels can be categorised as high or low by comparing it withthe EU average of 9 per cent. Combining these two dimensions produces followinggroups:

Figure 1: Unemployment dimensions in the Nordic countries.

Iceland has the shortest history of unemployment and the lowest unemploymentlevel in the Nordic countries. The case of ~Iceland is unique in that unemploymentwas practically non-existent before the 1990s. Finland experienced an unemploymentpeak in the 1970s, but this was levelled out due to economic ties with the SovietUnion. Unemployment increased dramatically after the recession in the 1990s, andsuch high unemployment is thus a relatively new phenomenon. Sweden was hit bythe crisis somewhat after Finland. Thus, both Finland and Sweden can be categorizedas having a short unemployment history, but although Finland currently has a muchhigher unemployment level than Sweden. Norway still has a relatively low level -even by international standards - and Denmark, generally speaking, has a slightlyhigher level than Norway. What also unites these two countries is that the number oflong-term unemployed is higher (26-28 per cent) than in the countries with a shorterunemployment history, which points towards the difference between cyclical andstructural unemployment. Still, Finland deviates from this pattern in that the numberof long-term unemployed is even higher (37 per cent) and resembles that of the restof Europe.

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Shifting trends in labourmarket policies

Nordic labour market policies seem at first sight quite convergent, since there hasbeen a growing trend from passive income transfer to active measures, and alsotendencies to strengthen both incentives and duties by tightening social security.Still, the countries have different emphasis. Active measures3 are being applied mostvigorously in Sweden and Norway. Denmark has intensified its activating policies inthe 1990s while developments in Finland have fluctuated from increasing activatingpolicies in the 1980s, abandoning such obligations in 1993, and increasing them againin 1996 for young people under 20, and in 1997 for young people under 25 years. withthe rise of unemployment in the 1990s Iceland has employed more activating policies.A comparison of the costs of active versus passive labour market policy measures aspercentages of GNP (Employment outlook, 1996) show-s that Norwav and Swedencan be categorised as active countries and Finland and Denmark as passive. There isno comparative cost information available for Iceland.

Even though unemployment benefit systems are largely based on insurance-based benefits, there has been a shift towards low level basic security and meanstesting for the young. These changes were largely brought about by the structuralchallenges of high unemployment and an increase in atypical employment. In all theNordic countries, basic security is combined with income-related security, but thereare differences in emphasis on these two dimensions. Denmark has come quite closeto a basic security model’ with unusually-generous benefits and easy access to thesystem. It is also worth noting that Denmark is the only Nordic country which has notlowered the compensation level for unemployment. Sweden, Norway and Icelandstill have an institutional social policy system, with combined income-related andbasic security, while the Finnish institutional model for the young has changed to acombined basic and means-tested system, as very few are eligible for income-relatedbenefits.

Developments in the Nordic labour market policy for young people can bedescribed by the ’sticks and carrots’ metaphor and can be summarised as follows:

The criteria for insurance-based unemployment benefit have become stricter.Manly young people have already ceased to qualify for universal benefits because ofatypical employment (in all the Nordic countries except Denmark).

The means-testing criteria for flat-rate benefits and social assistance have beentightened (Sweden, Finland, Denmark).

The level of means-tested benefits has gone down (Finland, Sweden, Denmark).The benefits have not been index-linked for many years, meaning decreasedspending power (Finland). This decreased level of benefits has mainly hit thoseliving with their parents (Finland, Denmark).

Young people under 25 can no longer receive unemployment benefit without

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being activated. They have both the right and the obligation to accept a job offer ora training opportunity (Finland, Sweden, Norway, Denmark).

Why, then, should ’

employment measures haveany effect?

Employment measures aim generally at increasing labour market flexibility andmaintaining and strengthening the individual’s working capacity with a view to

improving his or her chances of finding employment. There is continuing debate onwhether these activating programmes do, in fact, have these effects. The schemes arefrequently criticized for having less ambitious functions, such as cleaning up thestatistics or just storing the workforce (cf. Hyypp~, 1999). The debate, however, isseldom based on empirical facts - which is understandable given the fragmentedbody of knowledge in this field. An overview of previous studies on the effect ofemployment measures proves that the results are highly controversial and difficult tocompare. Choices of control group, surveys, research design, methods andmeasurements vary. One might say that there is some unity in that it is difficult toprove beyond reasonable doubt the positive and negative effects of labour marketpolicies. The main arguments put forward in Nordic studies on the effects of differentlabour market programmes are summarised below.

Qualifying measures, i.e. training (education), apprenticeships and job training inthe private sector, as opposed to more traditional public activation, seem to producemore positive effects (Schr6der, 1991; Try, 1994; Aho et al., 1996; Calmfors, 1996;Mikkoncn, 1996).

The duration of the activation programme also seems to affect the end result,since short as opposed to long educational courses have been found to produce lessbeneficial results (Torp, 1992; Madsen, 1994; see also Korpi, 1994).

If the measures are part of a long-term strategy or development plan, then theprobability of success increases (Sehlstedt & Schr6der, 1989).

Positive results are produced not only through relevant education, but alsobecause of the fact that job training offers connections with potential employers(Rosdahl, 1996).

Experience in Sweden has shown that results depend highly on whether theinitiative is part of a concrete and individual action plan (cf. ~Iadsen, 1994; Schr6der,1994)

Even though the aims of labour market initiatives are integrative, there are stillmany side effects, and also the risk of marginalization. Research (Edin & Holmlund,1991; Furlong, 1993; Hammer, 1996; Spies, 1996) has shown that the measures per semight form employment traps. Those who participate in programmes constantlycirculate between initiatives and unemployment. The probability of finding

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employment has also been shown to diminish the more the person has participatedin different programmes (Korpi, 1994). A contributing reason for this is that activationqualifies the unemployed for a renewed period of benefits. This kind of circulationis especially common in Sweden (Bjorkman & Harkman, 1995).

Evaluation of different schemes for unemployed youth has mainly been under-taken in a national context. We lack thus comparative knowledge of how schemesfunction in different settings. It is also important to evaluate schemes not only aslabour market measures but as a social policy measure, which may help young peopleto cope with problems related to unemployment. Furthermore, increased educationalmotivation and return to education is also an important outcome.

Research methods andresearch design

This research is based on a Nordic survey on youth unemployment. The sampleswere drawn from national unemployment registers, and the respondents were youngpeople between the ages of 18 and 25 who had been unemployed for a period of atleast three months over the previous six months. The surveys were carried out in late1995/earlv 1996, and were initially based on postal questionnaires, with additionaltelephone interviews carried out to minimise the bias caused by a skewed responserate. The postal questionnaires were completed six months after the sampling, atwhich time some of the young people had found jobs, entered schemes or returnedto education, while others remained unemployed. The response rate in the surveyreached 73 per cent in Finland, 60 per cent in Iceland, 56 per cent in Norway, 63 percent in Sweden and 79 per cent in Denmark. The attrition analyses conducted for thecountries involved showed that, all in all, the material is well balanced and that thereis no need to correct skew ness.

This article analyses the role of labour market schemes in relation to youngpeople’s subjective experiences, and to the outcomes of employment or education,in both a short-term and a long-term perspective. The main research design (cf Carle,1997; Carle & Julkunen, 1998) can be illustrated as follows:

Figure ?: Research design

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At the starting point in spring 1995, all of the young people in our study wereunemployed. Approximately a half a year later the situation had changed. In what waydid the active measures influence the outcome in terms of the occupationa 1 status ofthe young at the time of the interview? Logistic regression was used to predict theoccupational status. The study also analyses the short-term effects of the activemeasures from the responses to a question about the occupational status three

months after the activation

Something to do? Youngpeople’s experiences ofemployment schemes

In our study, about half of the Swedish, Norwegian and Finnish subjects hadparticipated in employment-enhancing measures at some point, but only a minorityof the Danish and Icelandic subjects had done so. The numbers participatingcorresponded to the current employment policies of the countries. Sweden is famousfor its active labour market policy, whereas in Norway the obligation to be active wasintroduced later, in 1994. Even though Finland can be characterized as a cou ntry withmore passive labour market policies, a large number of young people had still beenactivated. This was due partly to the high level of unemployment, but also toincreased investments in youth unemployment measures during the past few years,particularly since 1996 when young people under 20 were covered by activationmeasures. Denmark currently has a recognised activation policy, but this clearly hasless effect on the insured young people who comprised the Danish group in the study.Moreover, the effect of the new activation policy cannot yet be seen since the reformcame into force only in April 1996. Unemployment is a new problem in Iceland, andthe number of young people participating in the measures was low.

The Norwegian and Swedish young people in our study had taken part in

activating programmes more often than those in the other Nordic countries. One thirdof them had done so more than three times during their lives. When we studied theeffect of the background factors, such as education, interrupted education and placeof residence, on participation in labour market programmes, we did not find significantdifferences between those who had been activated in different programmes and

those who had not. This .indicates that activation is rather the norm, a natural part of

the lives of young unemployed people in Scandinavia, just as unemployment hasbecome a normal part of their labour market careers. In the transition period fromyouth to adulthood, new institutions between school and work have emerged andtheir importance seems to be growing. This ’grey sector’, between school andworking life, consists of employment schemes, apprenticeships and separate

employment projects (cf. Nyyss6l~, 1999). We did, however, uncover interestingdifferences between those who had repeatedly been activated and those who had

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participated only once in labour market programmes. The analysis shows that thosewho had been activated more frequently formed a more exposed group, and featuredmore young people with a background of only compulsory school, interrupted studiesand longer unemployment experiences.

In general, the young people in all the Nordic countries reported positiveexperiences of labour market initiatives: they thought that they had learned newthings, that they had been given something to do, that the job/education wasinteresting, and that the atmosphere at work was good. These positive experiencesseemed to be related to the unemployment level, since the least positive experienceswcre found in Iceland and the most positive experiences were found in Finland. Still,the results were somewhat ambiguous. What the young people who were interviewedappreciated most was that the programmes gave them something to do, which impliesthat they have an important social function - to participate in schemes is a way ofparticipating in a society in which work is the norm. Or, as one young unemployedwoman phrased it: ’Only to be able to say to people: I am working.’’ The labourmarket programmes also have a social function in that they create the opportunity tobe socially active, and also to reflect on one’s own situation compared with others.This can strengthen one’s self-confidence, as Josef implies:

It was really ~ood to join the computer course and see what kind of people arc unemployed. Thatit is people who arc not stupid. It can really be anybody and they are extremely productive peoplewho are outgoing and not unstable, but people who are smart and nice.&dquo;

However, another distinctive feature was that the majority (about 80 per cent)disagreed most with the statement that the measures were too demanding. This tellsus something about the quality of the employment measures, and that there is a

discrepancy between the character of the employment/education opportunities andthe resources and wishes of the young. The results are concordant with previousstudies that have highlighted the need for developing the programmes and extendingthe competence of employment offices and officers (Virtanen, 1996). We could alsoraise the question as to whether this phenomenon is connected with volition: to whatextent can young people themselves choose their employment place and to whatextent is coercion used. Previous studies (e.g. Schr6der, 1994) have emphasized theimportance of the schemes being an integral part of an individual plan. An individualplan also implies an important psychological rationale: the importance of being ableto choose one’s situation. This dimension has been acknowledged by Carstens (1998)in her study of activation in Denmark, where she implies that it strengthens self-valueand identity development to believe that one has chosen one’s situation.

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Employment and educationalprospects

The analysis of employment prospects is divided into two parts. The first concerns.employment three months after completing a programme, and the second is based ona logistic regression where the impact of factors affecting the probability of beingemployed was taken into account.

Table 1. Employment status three months after completing a programme by country;percentages

Three months after completing employment schemes, the majority of the subjects inFinland and Sweden, where the levels of unemployment were higher than in theother countries, were unemployed. The difficult employment situation in Finlandwas clearly visible: only 13 per cent of the subjects had found a job, 8 per cent hadbegun some form of education, and as many as 69 per cent were still unemployed.This shows that labour market schemes do not function well in times of highunemployment. The chances of finding a job were best in Iceland and Denmark,where respectively 47 and 38 per cent of the young had done so. Despite economicgrowth and a high demand for labour in Norway, surprisingly few had entered workthere, which points to different selection mechanisms in the inflow and outflow ofunemployment. At low unemployment levels there is stronger inflow selection, andthose who become unemployed stay unemployed for a longer time. Structuralunemployment affects the demand for labour. Thus, the qualifications of the youngNorwegian people probably affected their chances of finding a job. Still, this does notseem to be the case in Denmark, where fewer people ended up in unemployment.An interesting feature, however, is that a much higher number of young people hadfound an alternative occupation in Denmark. This phenomenon seemed to applymostly to women, who had either gone on maternity leave, stayed at home, orparticipated in specific activation projects.

When all the explanatory factors were taken into consideration (Table 2), it wasfound that the chance of finding a job was highly dependent on the unemployment

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history of the young person concerned. A shorter period of unemployment significantlyimproved the odds of becoming employed again. Logically enough, previous workexperience also affected the probability of findingwork. Those who had no experiencestood a significantly worse chance of finding a job than those who had more workingexperience. The women in Denmark were less likely to find employment than themen. Other background factors did not seem to significantly affect the probability offinding employment, even though education can be said to have a positive effect: thehigher the level of education, the more likely the person was to be employed withinthree months.

Labour market schemes7 appeared to have a positive short-term effect in all thecountries except Finland, with labour market training, job training and employmentprojects more likely to result in finding work than the employment measures.However, the results were only significant for Norway, where participation in labourmarket training and job practice clearly improved the chances of finding work. Thismay have been because the young people who had participated in these programmeshad better preconditions. Our study cannot verify whether there is some selectivity,since we do not know for certain what the subjects’ previous qualifications were.Studies in Norway (Torp, 1992) have, however, proved that recruitment may bedistorted, especially for labour market training. Another interesting feature is that

repeated participation in labour market schemes seems to produce a slightly worsechance of finding work than one-off participation. This was true for all the countries,but especially for Norway.

NVe were also interested in finding out whether activation could be seen as agenerally determining feature of future employment. We chose to limit this analvsis(Table 3) to comparisons within the workforce, i.e. those who were studying, at home,or who were in the army at the time, were excluded. The explanatory variables weregender, age, education, place of residence, working experience, and duration ofunemployment. We also considered non-participation in programmes.

The results of the analysis indicate that it was mainly the structural factors -unemployment and working experience - that most affected the probability ofbecoming re-emploved. This was true for all the Nordic countries, but particularlyaccentuated in Iceland and Denmark, where the young people had significantly morework experience and stood a better chance of becoming integrated into the labourmarket. The level of education was also significant in all the countries except Finland,but despite this, level of education still seemed to be a positive factor in finding a jobin Finland. These results are, thus, concordant with a study by Korpi (1994), whofound that moving from unemployment to employment depends largely on theeducational level of the person and the duration of the unemployment.

The effect of the different labour market programmes was not significant exceptin Sweden, where job training was of central importance. Those who had participatedin job training thus stood a better chance of becoming employed. Those who hadparticipated in labour market training, on the other hand, had a slightly worse chance

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of finding work. However, those who had participated in labour market training hada better chance of getting into education (see Table 4).

Repeated participation seemed to affect negatively the probability of findingwork. The results were significant only in Sweden, however, where those who hadbeen activated only once stood a better chance of becoming employed than those whohad been activated repeatedly. The probability of finding employment seems,therefore, to diminish the more the person has participated in different programmes.

The results were somewhat different when the effect of labour market measures

was related to the chances of further education. Women stood a better chance than

men in this area in Finland and Sweden. The Icelandic women stood a worse chance,which was probably connected to the fact that a large number of them had children.Background factors such as level of education and place of residence were significantin all the Nordic countries, except Norway. The chances of being accepted for furthereducation diminished in sparsely-populated areas; and the higher the level of

education, the better the chance of being accepted for education. Work experienceaffected negatively further education possibilities - those who had no work experiencestood a better chance of getting into educational programmes in Iceland, Norway andSweden. Interestingly enough, participation in labour market schemes had a slightpositive effect in all the Nordic countries except Norway. Job training, however, wasof significance only in Finland and Sweden.

Addressing the elements ofpolicy...

Unemployment and work experience as such were decisive in determiningemployment prospects. This result is crucial in relation to how society itself explainsand handles misfortunes. According to Therborn (1995), the culture of the policy-makers is deeply ambivalent about the value of (un)employment. To governments,unemployment is seen as failure, yet the success of economic policy is defined withcomplete disregard of employment. National economic institutions, ideologies andpolicies have thus lost their significance and the impact of international markets hasincreased. Although risks have also increased and become more global, paradoxically,they have also become more individualized. The individualization of modern societymeans, in some way or other, that situations - in this case unemployment - whichwould once have led to a call for political action are now interpreted as something thatcan be solved on an individual level through personal action.

Does policy matter? Therborn (1991) has come to the general conclusion thatinstitutional differences between different kinds of welfare states are the main

explanation for differences in unemployment. In particular, it is an institutional

commitment to full employment that matters and not so much anti-inflation orgrowth policies. Comparative research from the 90s (Esping-Andersen, 1996) has,stressed, however, that it is not only the aim of full employment, but social investments

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in employment, which seem to count. Were there differences according to thedifferent labour market contexts? Did the countries with a more stressed activation

policy have more positive emplovment prospects, and did labour market programmesmake a difference?

Labour market programmes appeared to be influenced by the national context inthat the schemes have different effects in the different countries. Generally,employment schemes seemed to have positive effects in active countries such asSweden. In Norway, however, positive effects could be seen only in the short termand, contrary to expectations surprisingly many ended up unemployed. Norway,however, differs from Sweden in one essential way: it has a longer unemploymenthistory and a higher number of long-term unemployed. Unemployment history, thenseems to offer one explanation for the difference for Norway. However, this is not thecase for Denmark, as fewer young people ended up unemployed. The young peoplein Denmark however, found alternative routes to a much higher degree, as they wereeither on maternity leave, stayed at home or participated in specific projects. Oneexplanation for this phenomenon could be the more family-friendly policy, of whichthe leave-of-absence arrangements are a good example. Iceland and Finland seem toform the extremes of Scandinavia. Iceland has a short unemployment history, a lowunemployment level and a favourable labour market, and young people there hadfound work to a much higher degree than those in the other countries. The oppositetrend was found in Finland, the country with the highest unemployment level, anda rather passive policy, where there was higher selection in terms of who exits fromunemployment, and very few entered the labour market.

... volition and competenceAs far as the various programmes are concerned, the study revealed that job traininghad positive effects on the chances of getting a job. It seemed not only to offer relevantwork experience, but also to provide connections with potential employers. Theseresults are in accordance with Raffe (1987), who argues that the training content of theschemes is less important than the context in which the training is provided. Couldthis also explain why employment measures in the public sector appear to produceless good results? Labour market training did not affect employment chances, but itappeared to affect positively the chances of a return to education. It appears to

enhance the motivation to learn in all the countries, regardless of whether the countryhas active or passive policies, or have low or high unemployment. One could thenargue that activation works as a ’qualitative push’, and that schemes may in factstrengthen the competences of young people. Still, we cannot say for certain that theywill end up in work after a completed course of education.

Circulation in labour market schemes had negative effects in all countries, whichpoints towards the unintended effects of activation policies. These may be related toemployers’ recruitment practices, and the group concerned might be more vulnerable.

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The negative effect raises several questions. First, is labour market policy the rightanswer to this ’problem’? Other solutions might be more appropriate. An al ternativecould be a more family-friendly policy; support for families, day-care services (also forthe unemployed), social policy, housing policy and social work. There are dangerous,trends in the introduction of a market environment in the social sector. Because of the

pressure for some kind of’success rate’ with regard to employment, there is a risk thatthe most vulnerable groups might be expelled not only from the labour market, butalso from professional counselling processes. However, as much as there is a risk innot looking for alternative tools, there is also the danger of a totalitarian tendency inthat we are trying to integrate young unemployed people in one way or another. Thisleads us to the second question: should employment be stressed as the only ultimateend result? Generally, the aim of activation is to integrate unemployed people into thelabour market, but many programmes also strive to enhance personal development- in different degrees. Still, the programmes are mostly evaluated only according tothe mechanical criteria of employment; personal gain and personal develop ment areseldom highlighted. The positive experiences of labour market programmes reportedin this study indicate that they have values other than just improving employment.This is in line with previous results from the study revealing that those on trainingschemes have better mental health (Hammer 2000). An enhanced self-esteem, whichwas found particularly among the Finnish young people, strengthens personalcompetence and may as well be an important trigger to future labour marketintergration. This implies that social aims should not be overlooked. But, as Carstens(1998) has questioned, should there also be a limit to how long people can circulatein activation if it does not lead to a higher quality of life? It is equally importan t to leaveroom for choice - including the choice not to be integrated - as it is to provide optionsor alternatives.

A final note

The success of labour market programmes seems to be embedded in the national

context, but on different levels; on a national level (the labour market), on a practicallevel (policy and institutions) and on an individual level. We can learn from othercountries, but in order to understand the function of these measures we need to

thoroughly analyse them in accord with Therborn (1995), from two opposing sides:that of the policy-makers (employers) and that of the policy-takers (the unemployed).In this study, the viewpoints of the policy-takers have been analysed and the resultsindicate that activation can make a difference. However, it seems that it needs to be

strong, as in the case of Sweden, or in the form of broader social investments as in thecase of Denmark. Still, not all schemes are successful in reaching employment aims.The context appears to be important. But is the crucial question whether the contextis the public or the private sector, or rather the ability to create jobs and opportunitieswhere the unemployed can fulfil and develop their competences? Rothstein (1998)has pointed out that an active labour market policy should always be a quality product

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and subsidies should not be limited to specific jobs and sectors. Labour marketprogrammes have then some potential, but they should not be implemented at anycost. Alternative tools and real choices must be stressed. Still, as Julkunen (1998) has-argued, labour market policy alone is not enough without a receptive labour market.This could well be seen in the case of Finland. Ultimately it is the pressure andanticipations from the labour market that affect the outcome. It seems though that toolittle attention has been paid to the viewpoints of the employers or public officials onthe issue of labour market programmes. And a crucial question remains: in what wayis (and is not) labour market flexibility enhanced through labour market programmes?

Acknowledgements: I am grateful for the comments of the referees and the editorialboard. This article has been made possible through the funding of the EL1 TSERprogramme and Svenska Kulturfonden.

Notes1 The main results of the Nordic study are published in Julkunen I & Carle J : Young andunemployed in Scandinavia. Nord 1998:19 and in Julkunen I & Malmberg-Heimonen I (1998):The encounter of high unemployment among yonth. Työpoliittinen tutkimus 188. Helsinki. Thestudy has been funded by the Nordic Council of Ministers and local financers and is nowextended to embrace a European perspective, funded by the EU TSER and YFE programs.2 In 1995 the youth unemployment level was 9.9 % in Denmark (total 7.0 % ), 11.9 % in Norway(4.9 %), 11.0 % in Iceland (4.8 %), 15.4 % in Sweden (7.6 %) and 27.2 % in Finland (17.0 %).In 1997 the youth unemployment level decreased most in Iceland and Denmark, whilechanges were slight in the other countries.3 Active labour market policy measures consist of public employment services, labour markettraining, specific youth measures, subsidised employment and measures to help the disabled.Passive measures consist of unemployment compensation. As such, the terms active andpassive are misleading as they do not reflect the life circumstances of the unemployed, butmerely differentiate between different labour-market policies.4 Palme (1990) has clustered pension systems on the basis of two dimensions: 1) basic securityand 2) income security. In this study we used these dimensions to classify unemploymentsecurity.5 in Pockettidningen Rättvisa 1/98.6 Josef was interviewed by Christer Theandersson and the report is part of the qualitativestudy and published in Tema Nord 1999:552 (Wrede- Jäntti M & Thordisdottir R & The-

andersson C).7 Labour marker schemes are divided into four categories here: 1)labour market training whichcomprises mainly educational courses, 2) job training which refers to subsidised employmentmainly in the private sector 3) employment measures referring to supplemented work mainlywithin the public sector and 4) other measures referring to rehabilitation, specific projects andsupport to start enterprises.

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AHO, SIMO & JUOKO NÄTTI & ASKO SUIKKANEN (1996) Työvoimakoulutuksen ja tukityöllistämisenvaikuttavuus 1988-1992 (Effects of labour market training and employment schemes 1988-1992). Helsinki: Työpoliittinen tutkimus 144, Työministeriö.

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