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The chapter analyses changes within the Spanish unemployment protection system in response to developments in the labour market between 1990 and 2010. Persistent mass unemployment and temporary employment, together with high job turnover and opportunistic behaviour, have failed to prompt structural policy change. The remaining two-tier system reflects, and contributes to, the prevailing labour market segmentation. The emergence of new assistance schemes, such as the RAI (Renta Activa de Inserción) in 2000 and extensions of agricultural programmes, illustrates the ineffective protection for the long-term unemployed, thus highlighting the restrictive nature of unemployment insurance. Fragmentation is supported by persisting benefit disparities between several tiers of protection, age- and family-related differences, and by the extension of unemployment assistance for older persons (pre-retirement). By contrast, many younger jobseekers have remained excluded from unemployment protection. Due to the scale of unemployment and because of policy coordination problems after the decentralization of public employment services, actual procedures within activation policy have remained below standards as envisaged in the European Employment Strategy.

The traditional European approach to unemployment protection developed in the context of industrial labour markets, and its key institutional features, ensured a relatively virtuous interaction between the social protection of workers and the promotion of conditions for successful industrial production. After discussing how this complementarity was challenged from the 1970s onwards by deep-seated changes in the profile and functioning of European labour markets, the chapter reviews a number of trends in recent unemployment protection reforms that our suggestive of the gradual emergence of a new model of unemployment support, based on a reworked articulation between economic production and social protection. It introduces the concept of ‘triple integration’ as a framework for the comparative analysis of institutional changes that tend towards the creation of an integrated benefit-and-service system adapted to the profile of economic risks that characterize post-industrial labour markets.

The chapter argues that the development of unemployment protection in Sweden, especially since the early 1990s, has been particularly ambivalent. While the voluntary state-subsidized system has been formally preserved, unemployment protection overall has become less generous and encompassing, and there has also been increased differentiation between a core group who had a stable attachment to the labour market before they became unemployed and others. Economic incentives to work have been emphasized by all major political actors and there has been a homogenization of benefit levels in the public system, but the overall benefit package has meanwhile become increasingly differentiated due to the growing role of private and collectively negotiated benefits. Active measures have also been developed, but are increasingly used as an extended form of income security. It is argued that these developments should be understood in the light of a changed economic policy paradigm, budgetary strain, and ideological change among political actors.

Despite being considered to have rather similar political economies, patterns of unemployment benefit adjustment were different in Belgium and France in the 1980s and 1990s. In France the unemployment insurance system retained generous earnings-related benefits but became increasingly exclusive, with many unemployed people thus being forced to rely on institutionally distinct second-tier benefit schemes. In Belgium, by contrast, unemployment protection remained integrated and inclusive, but gradually mutated into a flat-rate benefit system providing only basic protection. This chapter explores the political dynamics behind the contrasting institutional and distributive choices in the unemployment benefit reforms of these two otherwise similar countries, in the process shedding light on the politics of welfare state dualization more generally. It suggests that the inherited institutional features of welfare systems structure the preferences of key social and political actors in ways that are likely to generate diverse social policy responses to common economic and social challenges.

Recent developments in the regulation of the risk of unemployment set the Czech Republic apart from many other European countries. There is evidence neither of a significant blurring of the boundaries between the risk of unemployment and other forms of working‐age benefit dependency, nor of any trends towards benefit homogenization. On the contrary, since the early 1990s, a process of growing diversification in benefit rights can be identified, alongside a growing and strong emphasis on activation, associated with cuts in benefit entitlements in social assistance. Three factors in particular have influenced developments in the regulation of unemployment in the Czech case: the timing of the market transformation process, political imperatives of blame avoidance in the context of that transformation, and fiscal constraints which have become more pressing during the recent economic crisis.

The German case study confirms the trend of integration. Benefit homogenization occurred as a three-tier support system was replaced by a two-tier system, covering the vast majority of jobless benefit claimants by the newly created, tax-financed, and flat-rate unemployment benefit II. A process of risk re-categorization can be identified as the new benefit which includes all those people in working age being considered as ‘capable to work’ – and not covered by the insurance system. Within both benefit systems the link between entitlement, job search requirement, and other activation conditions has been reinforced. However, major differences between the two tiers of unemployment protection have been maintained with respect to benefit levels, work requirements, and activation options. Alongside an increasing casualization of employment relationships, this has resulted in an even more pronounced segmentation within the German labour market.

The chapter documents the conflict between two competing policy logics in recent French unemployment protection policy. Up until the 2000s, policy development followed a dualizing logic, reinforcing protection for those with longer work records prior to unemployment while relegating others to less generous alternative provisions. Driven by the gradual extension of an emphasis on activation that germinated on the social assistance margins of the unemployment benefit system, though, since the new millennium, significant reforms have been implemented that partially reconnect and synchronize provisions for different groups in the unemployed population. While the interests of powerful actors and their institutionalized role in French unemployment protection policy ensures that dualistic tendencies remain important, they therefore find themselves increasingly challenged by integrative reform dynamics. Though France is some way from having a fully integrated benefit-and-service system for the unemployed, in the last decade it has taken important steps in this direction.

The chapter discusses the role of the Third Way discourse in legitimizing labour market policy reform in Britain, France, and Germany. It argues that only in Britain can a convincing causal link be drawn between the Third Way discourse and the successful implementation of supply-side reforms. In France, societal interests institutionalized in the governance of social protection continue to act as a ‘pre-political’ bulwark against state intervention in existing arrangements. In Germany, somewhat similarly, institutional factors severely limit the potential for the centre-left to either develop a single structuring discourse or to fuse historically separate policy domains, as much of the current activation agenda supposes. To the extent that efforts have advanced in this latter respect, ad hoc exploitation of contingencies and crises has proved more effective than a Third Way discourse.

The fourth empirical chapter looks at unemployment protection in the UK, Australia, and Denmark. Again a surprisingly similar behavior can be observed, although the relative strength of the unions at the beginning of the period conditions the success of the Right. Reforms seem to follow a two-stage logic. First, the powers of unions are systematically severed, often by directly or indirectly reducing the attractiveness of union membership. This erodes the strength of the unions, but does not constitute cutbacks in unemployment protection as such. Cutbacks mostly follow at the second stage; i.e., after the unions have been defanged. These case study findings both support and substantially complement the results of the quantitative analysis reported in chapter 4.

Between 2003 and 2005 German labour market policy was subjected to the most far-reaching reform since the late 1960s. In many respects the reforms followed policies introduced in the UK and the gulf between the two countries was more pronounced two decades ago than it is now. The portfolio of active labour market programmes has become more similar over time and many German unemployed persons now receive social security provision which is akin to ‘British’ transfer policies. However, for persons with better-paid jobs and out of the labour force for shorter periods of time only, crucial cross-national differences remain. The chapter concentrates on developments particularly during the past ten years, as this is the period during which the contours of current British and German labour market policy have become increasingly clear.

In this part of the volume, the overall theme is the policy dilemma created by the many different activities of trade union in the field of welfare provision, notably pension policies and unemployment protection. Throughout the following chapters, a tension emerges between the role of unions as insurance providers, as institutions that facilitate agreements between different parties, and as rent‐seeking monopolists. By making use of an interdisciplinary approach, the analysis rationalizes a set of distinct features of the interaction between union activities and union structure on the one hand and welfare arrangements and welfare developments on the other.

This chapter analyzes how the different types of lefts that existed in Portugal and Spain shaped the evolution of employment and unemployment protection institutions in each country. The analysis focuses on differences in the strength of the far left and how this shaped the possibilities for political exchange between the trade union movement and government during the early years of Iberian democracy. In Portugal, the type of political exchange commonly found in Northern European social democracy proved impossible. Instead, there emerged a dynamic of spiraling antagonism between a communist-dominated union confederation and a series of socialist and social democratic governments. In contrast, the context of electoral socialism meant that the politics of political exchange became an arena of intraleft rivalry. Under Spain’s first right governments, the expansion of employment and unemployment protection served as a quid pro quo with the unions in the government’s broader efforts to re-equilibrate the economy.

This chapter explores the nature and substance of social citizenship in Britain and Germany. It focuses on unemployment protection, retirement provision, and health care entitlements. The chapter begins by arguing that the concept of social citizenship established by T.H. Marshall in the 1950s, and to varying degrees fostered through the welfare states of Western Europe, has been undermined, curtailed and replaced by strategies of activation, self-government and consumer choice. However, this chapter suggests that this is not a unilinear process and argues that while there is a clear evidence for the emergence of a fragmented configuration of citizenship with the marketisation of citizenship in some policy areas, one can also identify a re-emphasis on universalism.