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Marketization of Employment Services in European Comparison

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Matthias Knuth
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The article deals with quasi-market transactions between the German public employment service and service providers of active labour market policies. The article was published in Korean language in International Labor Brief 16 (12), p. 31-41.
Ian Greer
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Project organization is used extensively to promote creativity, innovation and responsiveness to local context, but can lead to precarious employment. This paper compares European Social Fund (ESF)-supported projects supporting ‘active inclusion’ of disadvantaged clients in Slovenia and France. Despite many similarities between the two social protection fields in task, temporality, teams and socio-economic context, the projects had different dynamics with important implications for workers. In Slovenia project dynamics have been precarious, leading to insecure jobs and reduced status for front-line staff; in France, by contrast, projects and employment have been relatively stable. Our explanation highlights the transaction, more specifically, the capacity of government agencies to function as intermediaries managing the transactions through which ESF money is disbursed to organizations providing services. We find that transnational pressures on the state affect its capacity as a transaction organizer to stabilize the organizational field. In Slovenia, transnational pressures associated with austerity and European Union integration have stripped away this capacity more radically than in France, leading to precarious project dynamics and risk shifting onto project workers.
Ian Greer
added a research item
The delivery of public services by nonprofit and for-profit providers alters the nature of services and jobs, often in unintended and undesired ways. We argue that these effects depend on the degree to which the service is ‘marketized’, that is, subjected by the funder to price-based competition. Using case studies of British and German employment services, this article scrutinizes the link between funding practices and service quality. Of particular concern in marketized employment services is the problem of ‘creaming and parking’, in which providers select job-ready clients for services and neglect clients more distant from the labour market. We explore three questions. What are the mechanisms through which marketization produces creaming and parking? What are the differences between these mechanisms in commercial and non-commercial service providers? Which national institutions might serve as a buffer for the landscape of service provision facing price-based competition?
Ian Greer
added a research item
'Activating' the jobless – bringing them into or closer to paid work – has become a government-funded industry. What are the dynamics of employment relations in this sector, constituted as a mixed market of non-profit, for-profit, and public sector bodies? Drawing on in-depth qualitative research in the UK and Germany, we argue that there is a tension between two levels of bureaucracy: system-level policymaking and planning and street-level service provision. This tension creates varying interorganizational contracting arrangements, which shape the institutional regulation of work. Under ‘marketized’ contracting – i.e. relatively short-term, price-based, standardized, and open to many competitors – frameworks of collective bargaining and worker representation are relatively difficult to apply, leading in extreme cases to a low-wage precarious pattern of employment relations.
Ian Greer
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Here will be a pair of book launches in mid-November, one in Greenwich and one in Berlin. For more information check out the Marketization in Europe blog: https://marketizationineurope.wordpress.com/
 
Karen N. Breidahl
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The marketization of employment services: Evidence from the UK, Germany, and Denmark One trend across OECD countries since the late 1990s has been the marketization of employment services. Intense price-based competition is increasingly used to govern these services. Based on an in-depth three-country comparative project, this paper examines the extent and trajectory of marketization in Denmark, Germany, and the UK since the early 2000s, countries that represent different regime types under both welfare regimes and varieties of capitalism theories. The paper also examines the effects of marketization trends on front-line staff and the character of services. We draw on qualitative interviews with public-sector purchasers of services and for-profit and non-profit providers and a detailed analysis of publicly available statistics and documents. Marketization has taken place in employment services in each country. However, the marketization trends and their effects vary across the three countries due to a wide range of labor market and welfare-state institutions. For example in the UK marketization of employment services seems to intensify insecurity, reduce the salience of collective bargaining and create opportunities for profiteering by private owners of provision. Furthermore, for the unemployed, marketization seems to undermine citizen entitlements by producing more standardized programs of support, as well as creaming and parking effects that penalize those furthest from the labor market. These effects are to some extent also visible in the two other countries, even in Denmark and Germany representing very different welfare state regimes. However, the effects of marketization, especially on working conditions and the services delivered are taking other forms, making these effects more modest.
Matthias Knuth
added a research item
Ein bisher wenig diskutierter Aspekt der Umgestaltung nationaler Arbeitsmarktpolitiken unter dem „Aktivierungsparadigma“ ist die Veränderung der Transaktionsformen zwischen Arbeitsverwaltung und Trägern. Unabhängig davon, ob gleichzeitig auch eine Aufgabenverlagerung von der öffentlichen Arbeitsverwaltung auf Dritte, also eine „Privatisierung“ stattfindet, kommt es aufgrund der Orientierung an Prinzipien des New Public Management zur „Vermarktlichung“: Die Transaktionen zwischen Arbeitsverwaltung und Dritten werden zunehmend über staatlich inszenierte Quasi-Märkte abgewickelt. Die konkrete Ausgestaltung und Struktur dieser Märkte bleibt jedoch bemerkenswert unterschiedlich und zeigt keine Anzeichen von Konvergenz. Die in Dänemark, Großbritannien und Deutschland zu beobachtenden Marktformen lassen sich weniger mit „Wohlfahrtsregimes“ gängiger Typologien in Verbindung bringen, als dass sie von nationalen Traditionen, der Struktur und Verfasstheit der jeweiligen staatlichen Akteure und von nationalen „Spielarten des Liberalismus“ abzuhängen scheinen. Den durch Einführung marktförmiger Transaktionsformen induzierten Preissenkungen bzw. –dämpfungen stehen Transaktionskosten, Qualitätsrisiken und andere nicht intendierte Effekte in einem Ausmaß gegenüber, das die Rechtfertigung der Vermarktlichung durch Effizienzgewinne infrage stellt. Eher scheint es darum zu gehen, staatliche Entscheidungen zu legitimieren bzw. gegen Kritik zu immunisieren: Vermarktlichung ersetzt das Risiko von „Staatsversagen“ durch das Risiko von „Marktversagen“, für das kein Entscheidungsträger Verantwortung trägt. Die Reichweite möglicher Reformvorschläge bleibt beschränkt auf das, was in der jeweiligen nationalen Diskursarena als legitim gelten kann. Vermarktlichung hat die Denkweisen aller beteiligten Akteure verändert, einschließlich derer, die ihre Folgen beklagen. Jedoch öffnet das neue Europäische Vergaberecht den Blick auf zulässige Varianten, die bisher in Deutschland nicht ausgeschöpft sind.
Matthias Knuth
added a research item
What is marketization, and what are its effects? This book uses employment services in Denmark, Germany, and Great Britain as a window to explore the rise of market mechanisms. Based on more than 100 interviews with funders, managers, front-line workers, and others, the authors discuss the internal workings of these markets and the organizations that provide the services. This book gives readers new tools to analyse market competition and its effects. It provides a new conceptualization of the markets themselves, the dilemmas and tradeoffs that they generate, and the differing services and workplaces that result. It is aimed at students and researchers in the applied fields of social policy, public administration, and employment relations and has important implications for comparative political economy and welfare states.