Parties, Unions, and Activation Strategies: The Context-Dependent Politics of Active Labor Market Policy Spending

Political Studies, 2013

52 Pages Posted: 5 Nov 2011 Last revised: 14 Feb 2012

See all articles by Markus S. Tepe

Markus S. Tepe

University of Oldenburg

Pieter Vanhuysse

University of Southern Denmark

Date Written: November 4, 2011

Abstract

This article explores the diverging roles of leftwing parties and trade unions in determining active labor market program (ALMP) spending. We argue that unions today increasingly take into account the distinct re-employability worries of their members. Rather than as a labor market outsider program, unions now consider ALMPs, especially those sub-programs most directly useful to their members, as their second-best or first-best feasible priority. Specifically, in countries where high job protection levels (the first-best goal) have not been achieved, more powerful unions will promote ALMP spending as an alternative way to offer their members some measure of labor market security. We test these arguments on a sample of 20 OECD countries between 1986 and 2005. Using a new measure of leftness, we find that leftwing party power has no effect on ALMP spending generally and a negative effect on job creation programs. By contrast, larger and more strike-prone unions are associated with higher ALMP spending overall, and specifically on those programs most benefiting their members: employment assistance and labor market training. Moreover, union strategies are context-dependent. More powerful unions push for more activation spending especially in labor markets where jobs are not yet well protected.

Keywords: activation paradigm, leftwing parties, union strategies, re-employment worries, insiders and outsiders, labor market policy, power resources

Suggested Citation

Tepe, Markus S. and Vanhuysse, Pieter, Parties, Unions, and Activation Strategies: The Context-Dependent Politics of Active Labor Market Policy Spending (November 4, 2011). Political Studies, 2013. Available at SSRN: https://ssrn.com/abstract=1954706 or http://dx.doi.org/10.2139/ssrn.1954706

Markus S. Tepe

University of Oldenburg ( email )

Ammerländer Heerstraße 114-118
Oldenburg, D-26111
Germany

HOME PAGE: http://www.tepems.de

Pieter Vanhuysse (Contact Author)

University of Southern Denmark ( email )

Campusvej 55
DK 5230 Odense
Denmark

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