Most Finnish economists are supportive of the idea of making unemployment security contingent on the effort shown by the unemployed to find employment, reports the Finnish Business and Policy Forum (EVA).
EVA has appointed a panel of 50 economists to comment on a number of topical economic issues in Finland.
The economists were asked in the latest iteration of the panel to indicate their agreement or disagreement with the statement that it is sensible policy making to encourage job seekers to perform short-term jobs and participate in employment services under the threat of cutting their unemployment allowance.
Almost two-thirds (63%) of the 41 economists who commented on the issue said they agreed or agreed strongly with the statement. A fifth of the economists, meanwhile, were uncertain about their position on the issue, whereas seven per cent told they disagreed and two per cent that they disagreed strongly with the statement.
The majority of respondents also viewed that threatening to cut unemployment benefits is an effective way to encourage job seekers to perform short-term jobs and develop their occupational skills through re-training.
“We have hardly any experience from systems resembling the activation model,” reminded Roope Uusitalo, a professor at the Jyväskylä University School of Business and Economics.
“The jobless have also previously been obliged to accept job offers and take part in training under the threat of sanctions, but the results linked to these sanctions cannot be extrapolated to the activation model as such,” he added.
Introduced at the beginning of the year, the activation model stipulates that job seekers who fail to satisfy a set of activity criteria lose 4.65 per cent of their unemployment benefits for 65 days.
Jukka Pirttilä, a professor of economics at the University of Tampere, was uncertain about his position on the issue despite being an advocate of unemployment security systems that incentivise the unemployed to re-employ themselves.
“It’s a way to maintain a high level of allowance without major losses in efficiency. The current way of implementation does have some problems, such as the scenario where someone is eager to participate in [employment] services but there are no places available,” writes Pirttilä.
Markku Kotilainen, a research director at the Research Institute of the Finnish Economy (Etla), similarly said he agreed with the statement as long as the unemployed have a genuine opportunity to find to short-term jobs or participate in training.
His colleague at Etla, Mika Maliranta, drew attention to the benefits of limiting periods of unemployment.
“It’s beneficial for both people and the national economy that unemployment periods remain relatively short and unemployment remains low. You can’t achieve this only with carrots because there isn’t enough money. That’s why we also have to exhort the unemployed,” commented Maliranta.
Aleksi Teivainen – HT
Photo: Vesa Moilanen – Lehtikuva
Source: Uusi Suomi