Job Guarantee as Model for Strengthening the Welfare State: The Case of the Netherlands

Abstract

In this article we present the Job Guarantee concept to complement the existing social security system. In the current welfare state, unemployment is high and many people have to rely on unemployment benefits or social assistance. The prognosis is that this will hardly go down in the future. Assuming a natural unemployment rate of 4.25% and an actual medium-term unemployment rate of 5.5 - 6%, the social assistance rate will move towards more or less 5%. That's a substantial financial burden. With Job Guarantee, we make use of the unutilized labor and production capacity and unutilized earning capacity. For the Netherlands we compare the net public costs of the present social assistance system with and without a Job Guarantee program, and we conclude that by changing unutilized labor capacity into production the welfare state is able to compensate for the weakest point, the low reintegration effectiveness of our system of income guarantee.

 

Download the PDF Version