Over the past decade or so, the idea has gained ground that, as Rosanvallon (1995) has put it in hisLa Nouvelle Question Sociale, ‘economic redundancy’ is on the rise in the advanced economies. The idea here is that there is less and less need in advanced economies for people who lack appropriate schooling or intellectual, creative or social talents.

To quote Esping-Andersen: ‘As servicing becomes the life-blood of our existence, privilege is bestowed upon the knowledge strata. Yet, there are huge areas of servicing which are labour intensive and low-skilled. The lower end of servicing society is where we...

The findings of chapter 1 appear consistent with the hypothesis that the less-skilled are finding it increasingly difficult to attain a reasonable standard of living in the labour market. But is this a valid perception? The reality is that we have remained pretty much in the dark regarding the extent to which job scarcity (or insufficient job expansion) is really the major factor behind the rises in pre-transfer poverty and benefit dependency.

In this part we look for answers in the available empirical literature, mostly in the field of labour economics. What I attempt here is to collect, interpret and...

The next two chapters are about the poverty and social policy consequences of the labour demand shifts documented in the previous chapters. The demand shift against the less-skilled is thought to have given rise to two major ‘new’ social risks: structural unemployment and low-paid employment. This first chapter of the second part looks at the poverty consequences of low pay.¹

There is widespread concern that ‘poverty in work’ has worsened in countries that have seen a rise in earnings inequality and as a direct consequence of this an increase in the incidence of relatively low-paid work. To compensate for the...

Structural unemployment is the second major ‘new social risk’ habitually associated with structural change in the labour market, particularly the demand shift against the less-skilled. As I proposed in the general introduction, it is often said that the traditional pillars of income protection – social insurance and social assistance – are not particularly well-adapted for dealing with the social risk of unemployment as it presents itself today, i.e., as a problem of structural labour market exclusion rather than as a risk-induced and typically temporary phenomenon. Basically, the claim here is that the distributional effectiveness, the economic efficiency and the political...

The 1990s were marked by rising prominence of social policy doctrines which entailed a departure from incrementalism, particularly that which is understood as improved benefit adequacy within the social insurance/social assistance framework. At the centre of these doctrines is the idea that there is and must be a strong complementarity between labour participation and poverty reduction objectives. A noticeable exponent is the Netherlands, where a radical policy shift from passive benefit adequacy towards boosting labour market participation was initiated in the mid-1980s and where it has been vigorously pursued ever since. The Dutch government itself summed up its singular purpose...

As noted in the previous chapter, the past decade has been marked by increased efforts to re-integrate those who have slipped into passive, long-term benefit dependency back into the labour market. The approach is two-pronged: ‘to make work possible’ and ‘to make work pay’, that is to say, to stimulate labour demand and to stimulate labour supply.

This chapter looks at the empirical evaluation literature. In the first section, we look at measures aimed at boosting labour demand, specifically through employment subsidies and reductions in employers’ social security contributions for the recruitment of long-term unemployed persons and other vulnerable groups...