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Based on a conjoint survey experiment we explore the support among European citizens for a European Union (EU) budgetary assistance instrument to combat adverse temporary or permanent economic shocks hitting Member States. Suitably designed, there is quite substantial support for such an EU instrument generally and across the sample countries. Support is broader when budgetary support is conditional on debt reduction in normal times and spent in specific policy areas, in particular healthcare and education. Support also increases when there is a role for the European Commission in terms of monitoring and providing guidance. However, there is little support for policy packages that terminate a program and impose a fine in the case of non-compliance. Further, there is broad acceptance of long-run redistribution towards poorer countries. Financing the assistance through a progressive tax increase is more popular than through a flat tax increase. In general, there is substantial scope for constructing assistance packages that command a majority support in all sample countries. The survey was fielded in the midst of the Covid-19 crisis, in which the prospect of a severe economic shock became realistic. However, the results of our survey are based on respondent views in a (partially) pre-political environment: respondents had the opportunity to reason and form their own opinion about the assistance package before concrete policy proposals were debated by political parties that seek the edges of polarization.

Infectieziekten zoals corona kennen geen landsgrenzen, maar toch is de bestrijding ervan nog steeds primair een nationale aangelegenheid. Met een gezamenlijke inkoop, opslag en toewijzing van medische middelen op EU niveau kunnen infectieziekten sneller bestreden worden. Maar zou daar onder burgers draagvlak voor zijn?

In this paper we confront the role the EU traditionally plays in the domain of health with the urgent need for collective action triggered by the corona virus pandemic. In the face of such a crisis, we argue that the joint procurement, stockpiling and allocation of medical countermeasures is a key component of true European solidarity, besides maintaining the integrity of the Single Market. We present the first results of a survey experiment taken before the current crisis on citizens’ attitudes towards centralizing at the EU level of policies to combat infectious diseases, which indicates considerable support. We conclude that a more robust policy framework with substantial centralization of procurement, stockpiling and allocation is warranted.

The American system of unemployment insurance (UI) is often cited as a model for potential European unemployment re-insurance schemes. While oversimplified comparisons are to be avoided, there are lessons Europe can learn from US federal-state relations regarding UI. We distinguish three aspects of the US system: first, in the 1930s the federal government was able to solve a collective action problem that impeded the development of state-level UI programs; second, during the 1950s Congress enacted a federal backstop for depleted state UI trust funds that are used to finance regular UI benefits; third, in the 1970s the federal government added an extra layer of UI to the state system, based on an intergovernmental co-financing of benefits which intensifies during crises and thus reinforces protection and stabilization where and when it is most needed. The second and third aspects now exercise European interest, which is about buttressing national systems with a supranational layer of insurance. The American experience shows that federal-state cooperation has overcome problems of collective action and enhanced stabilization. It proved to be of great importance in the Great Recession to effectively expand the protection of unemployed workers and to backstop state UI programs in a period of high and rising unemployment and thereby to contribute in a relevant way to the stabilization efforts of the Obama Administration. However, there are also some structural weaknesses in the American system. With a view to what might be developed in the EU, we identify two risks when an extra layer of unemployment protection is added at the supranational level. First, depending on the set-up of the system, federal-level financing of UI can lead to retrenchment of state-level efforts in terms of UI schemes and macroeconomic stabilization. Second, state-level retrenchment can lead to divergence between state UI programs. The US UI model is vulnerable to these two risks, although this may not be its main current challenge. Simultaneously, these risks – and the other problems besetting the American model – are not insurmountable. We draw both positive and cautionary lessons from the American experience. A lesson is that minimum requirements regarding generosity and coverage levels of UI programs are fundamental prerequisites for any supranational re-insurance.

La Commission européenne a affirmé de façon répétée que l'Union économique et monétaire (UEM) devait s'équiper d’un mécanisme de stabilisation. Pour ce faire, une des options est de réassurer les régimes d'assurance-chômage nationaux au niveau de la zone euro. Est-ce que les citoyens de l'UE sont disposés à partager les risques des crises de chômage ? Afin d'apporter des éléments de réponse à cette question, nous avons mené une enquête dans 13 États membres, y compris la France. Cette enquête tient autant que possible compte de la diversité de formules proposées; son but était de les traduire en des termes compréhensibles aux citoyens issus de toutes les couches de la population. Le principe commun à toutes les formules testées est que cette politique européenne viendrait en soutien des indemnités de chômage dans des pays qui sont dans le besoin en raison d'une forte hausse de leur taux de chômage. Nos résultats ont révélé que les modalités concrètes des formules proposées, visant à différents modes de partage des risques, avaient une influence significative sur l'adhésion des citoyens. La conclusion la plus importante est que l’opposition fondamentale au partage de risques est limitée à un segment assez réduit de la population. Nous observons une marge de discussion constructive et démocratique, plutôt qu'une polarisation insurmontable de la population.

The European Commission has argued repeatedly that the European Monetary Union has to be completed by automatic fiscal stabilisers. To achieve this, one of the options would be the re-insurance of national unemployment benefit schemes at the Eurozone level. Are EU citizens ready to share the risk of unemployment crises? To shed light on that question, we conducted a survey in 13 Member States. Our survey takes the large diversity of EU-level risk-sharing policies that have been proposed as much as possible into account and translates it to citizens of all straits of the population in an understandable way. The core idea in all the policy variants we tested is that a new European policy would support unemployment benefits in countries that are in need, due to a significant increase in unemployment. Our results show that the specific design of policies, aiming at particular modes of risk sharing, matters for public support among citizens. The most important conclusion is that fundamental opposition to such risk sharing at the EU level is confined to a relatively small segment of the population. Rather than insurmountable polarization, we observe room for constructive democratic deliberation.

If globalization leads to increasing inequality in the economically most advanced nation states, and if we want to reverse this trend, is the EU then part of the solution? Or, is the EU part of the problem? I argue that our discussion of these questions can be impaired by intellectual amalgamation and determinism in our understanding of globalization and Europeanisation. I signal these pitfalls in the work of Milanovic, Rodrik and other influential scholars: however thought-provoking their accounts of globalization and Europeanisation are, our discussion of the potential role of the EU should move beyond such accounts. International competition, technological and demographic changes and sociological and ideational shifts all put pressure on welfare states. But the difference between the trajectory of most continental European welfare states on one hand and the US and the UK on the other hand shows that, so far, national institutions and policies played a crucial role in mitigating the impact of these changes. Sixty years ago, European integration was premised on a neat division of labour: important aspects of economic policy would become supranational, social policy could be safely left in national hands. Prima facie, that neat division of labour seemed to work tolerably well for many years, notwithstanding a number of early, critical observations about the EU’s impact on the social fabric in Member States. But, in today’s EU, this division of labour is no longer sustainable: one reason is monetary unification, another reason is the economic heterogeneity after enlargement. Revising that division of labour requires a political contract at the European level that sustains risk-sharing and common social objectives. Agreeing on such a political contract raises issues of sovereignty, solidarity and shared values, but is possible without getting trapped in and paralyzed by a trilemma of democracy, sovereignty and integrated markets. However, to indicate the way forward, we need a coherent conception of a ‘European Social Union’.

Maurizio Ferrera tables a catalogue of proposals to add a social dimension and ‘some duty’ to EU citizenship. As always, his search for incremental solutions that reconcile feasibility and vision is challenging. However, I have some sympathy with Joppke’s reaction that one cannot dispense with a more fundamental debate on free movement, on which public opinion is deeply divided. Ferrera’s proposals may be relatively peripheral to settling that fundamental debate. On the other hand, Joppke’s insistence that EU citizenship is duty-free, because it is liberal, does not yield a justification for free movement and non-discrimination of mobile Europeans. I believe it is possible to justify free movement in a framework of principles that speak both to the mobile and the non-mobile European, whereby openness is embedded in principles of reciprocity. Reciprocity bridges rights and obligations.

In deze studie voor de Koning Boudewijnstichting gebruiken we de nieuwe indicator voor kind-specifieke deprivatie, die in maart 2018 op het Europese niveau werd aanvaard als gemeenschappelijke indicator voor het sociale beleid. We vergelijken en analyseren kind-specifieke deprivatie in België (als geheel en in elk gewest) en de Europese buurlanden van België, en ontwikkelen aanbevelingen voor het beleid.

In the aftermath of the Eurozone crisis, proposals to share the risk of unemployment shocks have been high on the political agenda. Welfare states have built-in automatic stabilisers to cushion economic shocks, notably unemployment insurance. The argument with regard to the Eurozone is that a monetary union needs mechanisms to buttress or complement the automatic stabilizers of its member states; support for national unemployment insurance might achieve this. However, are European citizens ready to share the risk of unemployment crises hitting their countries? This report sheds light on that crucial, yet unresolved question by conducting a conjoint survey experiment on public support for European unemployment risk sharing (EURS) among a representative sample of 19641 respondents in 13 European member states in October and November 2018. The conjoint experiment studies citizen preferences for policy proposals, implementing EURS, that vary on six dimensions: (1) generosity, (2) education and training conditions, (3) between-country redistribution, (4) national versus European administration, (5) impact on taxes, and (6) conditions with regard to individual job search effort. Our results show that policy design matters for public support. They also highlight variation across countries and socio-economic and ideological differences among citizens. Most importantly, fundamental opposition to EURS is confined to a small segment of the European population. In all countries in the sample, there are potential majorities for specific policy packages that organize EURS. A summary of the report (15 pp.) is available in German, French, Italian and Dutch. Click EURS Report and you will find, under the heading Materials, these summaries.

Dans ce rapport, réalisé pour la Fondation Roi Baudouin, nous utilisons un indicateur nouveau : la déprivation spécifique des enfants (accepté au niveau européen en mars 2018). Nous comparons et analysons la déprivation spécifiques des enfants en Belgique (et ses trois régions) et les pays voisins, et nous proposons des recommandations politiques.

Mensen met zwaar en laagbetaald werk houden het zelden vol door te werken tot hun pensioen. Zou het niet eerlijk zijn als zij eerder kunnen stoppen met werken, vooral omdat ze vaak al op jonge leeftijd toetraden tot de arbeidsmarkt? Die discussie wordt niet alleen in Nederland gevoerd, maar heeft ook de gemoederen in België flink beziggehouden. Ik maak de balans op, pleit voor een flexibel stelsel, en waarschuw dat het erkennen van zware beroepen geen oplossing vormt voor problemen die zijn ontstaan door de snelle stijging van de pensioenleeftijd.

In this short paper, I consider the important initiatives taken in 2017 by the European Commission w.r.t. the social dimension of the EU. I see them as signaling a paradigm shift, at least within the European Commission. However, at the moment of writing important questions are still pending, both w.r.t. the actual delivery and the underlying conception of the EU’s role in social policy. I add some suggestions for priority initiatives.

Last year, major initiatives regarding the social dimension of the European Union have been launched, notably the proclamation of the European Pillar of Social Rights in Gothenburg in November. Thus, 2017 might mark a turning point in the development of the social dimension of European integration. These initiatives signal the emergence of a new paradigm, but the jury is still out about its real and lasting impact. Next to the imperative to translate the solemn declaration of Gothenburg into tangible measures, the debate on social Europe remains handicapped by confusion and contradictory views about the role the Union should play in social policy. Therefore, in the first part of this paper we briefly explain why a social dimension has become a necessity for the European Union, even though the Union has no vocation to become a Welfare State. In the following sections, we identify three areas in which concrete action by the Union is necessary: promoting upward convergence in social standards and performance; guaranteeing fair mobility; and making investment in human capital a leitmotif of European action.

Dit hoofdstuk wil onderzoeken wat de rol van de Europese Unie inzake armoedebestrijding kan zijn, gegeven dat dit goed werkende nationale welvaartsstaten veronderstelt. Doorheen de jaren werd duidelijk dat de Europese Unie niet alleen moet inzetten op meer economische integratie, maar ook op meer sociaal beleid. Hoewel de Unie heel wat instrumenten in handen heeft op dit vlak, zijn er ook vele hindernissen die een sociaal beleid bemoeilijken. Groeiende ongelijkheden tussen en binnen de lidstaten, onder meer ten gevolge van de financieel-economische crisis, wijzen er op dat de rol van de Europese Unie op dit vlak versterkt moet worden. We pleiten in dit hoofdstuk dan ook voor een ‘Europese Sociale Unie’ die nationale welvaartsstaten ondersteunt op enkele cruciale domeinen.

In debatten over de toekomst van de verzorgingsstaat heet het steevast dat we speelbal zijn van globalisering en Europeanisering. Een nuchtere blik op België en Nederland spreekt dat pessimistische beeld sterk tegen. De lessen uit hun beider politiek biedt handelingsperspectief om samen op te trekken, voor broodnodig nieuw Europees sociaal beleid. Dit artikel vormt een bewerking van het tweede deel van de Pacificatielezing die ik in 2017 gehouden heb.

This chapter in ‘Monitoring Social Inclusion in Europe’ explores the missing links between employment policy success and inclusion policy failure. The focus is on individuals in the 20 to 59 age cohort and empirical analyses are relying on the EU Labour Force Survey (EU LFS) and the EU Survey on Income and Living Conditions (EU SILC). It updates and complements our earlier work and publications on household employment. The analysis proceeds in two steps. The first step considers the distribution of individual jobs over households, thus establishing a link between individual employment rates and household employment rates. Following the work by Gregg, Scutella and Wadsworth (2008, 2010) a ‘polarization index’ is created to measure the size of unequal distribution of employment over households. Actual changes in household joblessness are decomposed in (i) changes due to changing individual employment rates and changing household structures and (ii) changes in the distribution of jobs over households. The second step in the analysis matches employment at both levels of aggregation with poverty. Therefore, we decompose changes in the at-risk-of-poverty rates on the basis of (i) changes in the poverty risks of jobless households, and (ii) changes in the poverty risks of other (non-jobless) households; (iii) changes in household joblessness due to changes in individual employment rates and changing household structures and (iv) changes in the distribution of employment. The proposed technique does yield interesting insights into the trajectories that individual EU welfare states have followed over the past ten years. The book is available at the Eurostat website, but it can also been completely downloaded here.

TIn this paper, we study eight countries in which the regulation of unemployment benefits and related benefits (notably social assistance for able-bodied adults) and the concomitant activation of unemployed individuals has a multi-tiered architecture. We assess their experiences and try to understand possible problems of ‘institutional moral hazard’ that may emerge in the context of a (hypothetical) European Unemployment Benefit Scheme (EUBS). In the first section of the paper, we introduce the concept of ‘institutional moral hazard’, and contrast it to principal-agent problems which are also observed in the regulation of unemployment in some of our case studies. In the second section of the paper, we formulate a number of caveats and nuances with regard to our focus on institutional moral hazard. We argue that one should distinguish between institutional moral hazard as an objective reality, the public perception of institutional moral hazard, and public concern for it. In the third section of the paper, we specify factors that contribute to the salience of institutional moral hazard. These factors justify the analytical grid that we use to map our eight country cases; it is presented in section 4. In section 5, we briefly document the comparative generosity of the benefit systems in the countries under review, the overall strictness of the eligibility criteria, their budgetary impact, and the role of benefits in macroeconomic stabilisation. As we explain below, an overall assessment should assess problems of (institutional) moral hazard associated with benefit systems on the backdrop of the stabilisation capacity and redistributive features of these benefit systems; we can provide comparative data on the stabilisation for four of the eight countries under review, but data limitations do not allow us to present a comparison of the redistributive features of the systems under review. Section 6 highlights some of the most relevant features of the multi-tiered regulation of unemployment in the countries which we studied. In the final section, we formulate our main general conclusions, focusing on unemployment insurance and the lessons one can learn with regard to the idea of an EUBS. A summary of all our country case studies is added in the appendix to this paper, in the form of ‘country fiches’. (Eight more extensive reports on the country case studies are also available; they are added as a separate appendix to the research consortium’s report on ‘Feasibility and Added Value of a European Unemployment Benefit Scheme’

Deze bijdrage focust op sociale ongelijkheid in België en de rol van het sociaal beleid. Ze heeft niet de pretentie volledig te zijn; belangrijke instrumenten en beleidsdomeinen blijven buiten beeld. Ik heb het over de rol van sociaal beleid, maar verwijs slechts oppervlakkig naar de rol van het fiscale beleid. Ik bespreek niet de gezondheidszorg, noch het onderwijs, alhoewel beide cruciaal zijn in een sociale toekomstvisie. De Belgische case illustreert een algemene vaststelling, waarmee ik begin: er zijn geen ‘ijzeren wetten’ die in alle landen onweerstaanbaar tot dezelfde ontwikkeling leiden. Als het gaat over ongelijkheid, moeten we simplismen vermijden, zowel inzake de maatstaven voor ongelijkheid, als inzake de verklaring voor ongelijkheid en de gevolgen ervan.

Volwassenen zonder werk, die niet arbeidsongeschikt zijn, vallen in België terug op de werkloosheid of de bijstand. De federale overheid financiert de werkloosheid, terwijl de financiering van de bijstand gedeeld wordt tussen lokale besturen en federale overheid. De verhouding tussen het aantal bijstandsgerechtigden en het aantal werklozen is in de voorbije decennia grondig gewijzigd. Tijdens de voorbije 15 jaar veranderde ook de architectuur van het beleid. In de periode 2002-2004 kwam activering sterker op de voorgrond. Enerzijds werd een strak federaal beleidskader betreffende het regionale activeringsbeleid voor werklozen vastgelegd. Anderzijds kwam activering ook op de agenda in de bijstand, met federaal gedefinieerde instrumenten maar in een relatief vaag omschreven federaal normatief kader dat de lokale besturen veel vrijheid liet. In 2015 hevelde de zesde staatshervorming de bevoegdheid over de arbeidsmarktbegeleiding voor rechthebbenden op (equivalent) leefloon over van de federale overheid naar de gewesten, terwijl de financiering ervan een gedeelde verantwoordelijkheid van het federale en lokale bestuursniveau bleef. Tegelijkertijd werd de activeringsbevoegdheid inzake werkloosheid, die voor een groot deel reeds bij de gewesten lag, helemaal overgeheveld naar de gewesten, terwijl de financiering van de werkloosheid wel volledig federaal bleef. De vraag is hoe de gewesten met deze nieuwe bevoegdheden zullen omgaan: zullen ze het activeringsbeleid van lokale besturen op een andere manier aansturen en/of ondersteunen dan vandaag het geval is? Deze vraag knoopt aan bij bekende uitdagingen van ‘gedecentraliseerd beleid’, die zich ook stellen in andere landen met een gelaagd bestuur. We onderzoeken daarom de dynamiek van de bevoegdheidsverdeling in enkele Europese landen

Sterke nationale welvaartsstaten en Europese eenmaking waren de mooiste poli-tieke projecten van de 20 ste eeuw: ze gaven hoop. Welvaartsstaten zouden mensen 'bevrijden van vrees en nood'. De Europese integratie moest een einde stellen aan een geschiedenis van bloedige oorlogen. Beide projecten lijken nu vast te lopen. De Europese Unie (EU) is geconfronteerd met vragen die existentieel zijn omdat ze gaan over het doel zelf van de samenwerking. Het doel van welvaartsstaten wordt niet in vraag gesteld, maar de indruk bestaat dat ze steeds minder in staat zijn hun algemeen aanvaarde doel – mensen beschermen – waar te maken. Ik zal het niet hebben over de aaneenschakeling van crisissen in de Unie. Ik zal het ook niet hebben over alle uitdagingen waar onze welvaartsstaten voor staan. Belangrijke vraagstukken blijven daarmee buiten het gezichtsveld van deze lezing. Ik zoom in op één specifie-ke kwestie: zou het kunnen dat de verdere ontwikkeling van het Europese project en het project van nationale welvaartsstaten – tot overmaat van ramp – strijdig zijn met elkaar? Zouden we te maken hebben met een tragisch dilemma, omdat hun doelstellingen (integratie en openheid door de Unie, bescherming en zekerheid door nationale welvaartsstaten) als doelstellingen niet langer verenigbaar zijn? Een school van academische onderzoekers is deze mening inderdaad toegedaan: vol-gens Fritz Scharpf kan de EU, zoals die opgevat is, onmogelijk een sociale markt-economie vormen; ze duwt de lidstaten systematisch in de richting van een liberaal model 2. De grondleggers van het Europese project dachten dat absoluut niet, wel in-tegendeel: de ondertekenaars van het Verdrag van Rome waren ervan overtuigd dat economische integratie zou bijdragen tot de ontwikkeling van rijke en inclusieve na-(1) Oratie bij de benoeming tot Universiteitshoogleraar aan de Universiteit van Amsterdam, 1 juni 2016. Cantillon en Brian Burgoon voor hun punctueel commentaar en hulp, en de medewerkers van het Centre for European Policy Studies (CEPS) voor de stimulerende discussies over herver-zekeringen van nationale werkloosheidsuitkeringen bij de voorbereiding van de tekst. (2) Zie Scharpf (2009) voor een synthese van de opvatting die hij daarover ontwikkelde in een reeks van belang-rijke publicaties. Ik situeer deze opvatting in een breder geheel van analyses over de sociale impact van de EU in Vandenbroucke (2013).

This paper has been written in preparation of a research project funded by the European Commission (on the Feasibility and Added Value of a European Unemployment Benefit Scheme, contract VC/2015/0006). This paper adds information and detailed analysis to the following deliverable of that research project: Institutional Moral Hazard in the Multi-tiered Regulation of Unemployment and Social Assistance Benefits and Activation - A summary of eight country case studies; but it was not a deliverable. We use the concept ‘institutional moral hazard’ to analyse intergovernmental relations within multi-tiered welfare states, specifically the domain of in unemployment-related benefits and related activation policies (the ‘regulation of unemployment’). This paper is one of eight separate case studies, it focuses on Switzerland. Swiss unemployment insurance is regulated by the federal government but activation thereof is implemented by the cantonal offices. Minimum requirements and a monitoring system were introduced to ensure that these offices focused on activation of unemployment insurance caseloads. Furthermore, the federal government attempted to harmonise cantonal social assistance top-down, but these efforts were dropped in favour of non-binding inter-cantonal guidelines. In short, reforms borne out of federal concerns were often rejected or altered as cantons defended their autonomy.

This paper has been written in preparation of a research project funded by the European Commission (on the Feasibility and Added Value of a European Unemployment Benefit Scheme, contract VC/2015/0006). This paper adds information and detailed analysis to the following deliverable of that research project: Institutional Moral Hazard in the Multi-tiered Regulation of Unemployment and Social Assistance Benefits and Activation - A summary of eight country case studies; but it was not a deliverable. We use the concept ‘institutional moral hazard’ to analyse intergovernmental relations within multi-tiered welfare states, specifically the domain of in unemployment-related benefits and related activation policies (the ‘regulation of unemployment’). This paper is one of eight separate case studies, it focuses on Austria. The Austrian regulation of unemployment involves the federal government, regional governments (Länder) and the federal Public Employment Services (PES). The dominant policy concerns were threefold: divergence between activation practices for social assistance and unemployment insurance caseloads, increasing heterogeneity between regional social assistance schemes and principal-agent issues concerning the PES. The federal government harmonized different activation practices by making the federal PES responsible for all caseloads. Furthermore, the federal government negotiated a nation-wide agreement with the Länder on social assistance schemes. Finally, the governance of the PES was reformed and more monitoring and minimum requirements were introduced.

This paper has been written in preparation of a research project funded by the European Commission (on the Feasibility and Added Value of a European Unemployment Benefit Scheme, contract VC/2015/0006). This paper adds information and detailed analysis to the following deliverable of that research project: Institutional Moral Hazard in the Multi-tiered Regulation of Unemployment and Social Assistance Benefits and Activation - A summary of eight country case studies; but it was not a deliverable. We use the concept ‘institutional moral hazard’ to analyse intergovernmental relations within multi-tiered welfare states, specifically the domain of in unemployment-related benefits and related activation policies (the ‘regulation of unemployment’). This paper is one of eight separate case studies, it focuses on Germany. Responsibilities in the German regulation of unemployment are divided between the federal government, the federal Public Employment Services (PES) and the local level – with a supervisory role for the regional level. The German system is relatively centralised as a result of reforms aimed at mitigating institutional moral hazard and increasing divergence between activation of unemployment insurance and social assistance caseloads. Specifically, these reforms created a new social assistance scheme, more tightly regulated by the federal government, and placed activation responsibilities within one-stop-shops operated jointly by the PES and municipalities.

This paper has been written in preparation of a research project funded by the European Commission (on the Feasibility and Added Value of a European Unemployment Benefit Scheme, contract VC/2015/0006). This paper adds information and detailed analysis to the following deliverable of that research project: Institutional Moral Hazard in the Multi-tiered Regulation of Unemployment and Social Assistance Benefits and Activation - A summary of eight country case studies; but it was not a deliverable. We use the concept ‘institutional moral hazard’ to analyse intergovernmental relations within multi-tiered welfare states, specifically the domain of in unemployment-related benefits and related activation policies (the ‘regulation of unemployment’). This paper is one of eight separate case studies, it focuses on Canada. Responsibilities in the Canadian regulation of unemployment are divided between the federal government and the provinces. The federal government is responsible for unemployment insurance benefits, the provinces for social assistance and activation of all caseloads. Provincial activation responsibilities are loosely regulated by bilateral agreements with the federal government. Even though this system generates institutional moral hazard, it does not seem to be a major federal concern. The regulation of unemployment is characterised by a high level of provincial autonomy.

This paper has been written in preparation of a research project funded by the European Commission (on the Feasibility and Added Value of a European Unemployment Benefit Scheme, contract VC/2015/0006). This paper adds information and detailed analysis to the following deliverable of that research project: Institutional Moral Hazard in the Multi-tiered Regulation of Unemployment and Social Assistance Benefits and Activation - A summary of eight country case studies; but it was not a deliverable. We use the concept ‘institutional moral hazard’ to analyse intergovernmental relations within multi-tiered welfare states, specifically the domain of in unemployment-related benefits and related activation policies (the ‘regulation of unemployment’). This paper is one of eight separate case studies, it focuses on Denmark. There are two principal actors in the Danish regulation of unemployment: the central government and municipalities, unemployment insurance funds and regional governments have a less important role. Concern for institutional moral hazard has led to several reforms of the municipal activation system, resulting in increasingly detailed monitoring and a complicated financing method. The trade-off between the complexity of central controls and the need for local flexibility is a source of ongoing reform efforts.

This paper has been written in preparation of a research project funded by the European Commission (on the Feasibility and Added Value of a European Unemployment Benefit Scheme, contract VC/2015/0006). This paper adds information and detailed analysis to the following deliverable of that research project: Institutional Moral Hazard in the Multi-tiered Regulation of Unemployment and Social Assistance Benefits and Activation - A summary of eight country case studies; but it was not a deliverable. We use the concept ‘institutional moral hazard’ to analyse intergovernmental relations within multi-tiered welfare states, specifically the domain of in unemployment-related benefits and related activation policies (the ‘regulation of unemployment’). This paper is one of eight separate case studies, it focuses on the US. US unemployment insurance is a cooperation between the states and the federal government. Social assistance is divided between state-operated programmes, funded by block grants, and federally designed food assistance. Transversal activation policies are implemented by the states. At first sight, concerns for institutional moral hazard seem limited. But several reforms altered cost-sharing arrangements in social assistance and led to stricter minimum requirements for state-run activation policies. Therefore, it would be a mistake to overlook the role of institutional moral hazard in the US system.

There are some who consider supranational unemployment-based automatic stabilizers to be advantageous for the Euro area and the European Union at large (Deinzer 2004; Dullien 2007, 2012, 2014; French Ministry of Finance and Public Accounts 2014; see Figure 1). An E(MU)-wide unemployment benefit scheme could function as an automatic stabilizer but it could also create awareness amongst European citizens for the efforts and the advantages of the Union and it could reinforce convergence of social models. This paper focusses on stabilisation purposes and investigates issues of moral hazard. Even though the political climate in Europe is very hostile to further integration - in some countries more so than others - it would be wise to consider the merits of such proposals as it is the duty for public officials, politicians and researchers to look beyond the problems of today and to contemplate the solutions of tomorrow. If an E(M)U-wide unemployment benefit scheme, or some scheme that reinforces and supports national systems, could actually achieve at least some of the goals stated above, it warrants further investigation. In order to fully appreciate the possibilities and the limitations of a supranational scheme in combination with national schemes, it is paramount to learn from the experiences with actual real world practices of multi-tiered unemployment systems. Nearly everywhere in the European Union, but also in other Western countries, unemployment schemes are already multi-tiered in some form or another. Moreover, there is a strong European tendency to decentralise unemployment administration, social assistance and activation of the unemployed (Van Berkel & Borghi 2008, Wieshaupt 2010, Mosley 2011). It is crucial that, before we even think about adding another layer on top of existing unemployment schemes, we understand the realities and experiences of the (interaction between) existing layers. This paper will focus on the decentralisation efforts and the experiences with multi-tiered systems of unemployment benefits, social assistance and activation that exist today in order to explore the issue of moral hazard. The current European trend of decentralisation is very much linked to activation and moral hazard. The issue of moral hazard is especially relevant for the solidarity among contributors of any unemployment related scheme. This is one of the reasons for enacting activation systems. Passive labour market policies, administrating and disbursing cash benefits, are policies that are often executed at the central level. But the transition from passive to activating unemployment systems requires governments to have more intimate knowledge of unemployed individuals (Van Berkel & Borghi 2008). Activation, in this line of reasoning, requires tailor-made policies and the capacity to administer and monitor those policies. This logic mandates a decentralisation of labour market policies to local governments (OECD 2003: 12-17, Knuth & Larsen 2010). But besides the effort to bring activation closer to the unemployed, there are also other reasons for a multi-tiered system. Because there is a variety of motivations behind multi-tiered systems it does not come as a surprise that there are different forms of decentralisation. Bredgaard and Larsen try to bring order in the multitude of questions considering multi-tiered schemes and reforms. They identify two main dimensions: formal policy and operational policy (Table 1). Formal policy reforms concern the actual content of policies, whereas operational policy reforms deal with the relationship and the responsibilities of actors: who implements policy, who is responsible and to whom? Such questions are exactly the type of questions that are relevant for understanding the possibilities and limitations of multi-tiered systems. Therefore, the main focus of this paper will be on operational policy reforms. In practice, the difference between those two dimensions might not be so clear-cut. This paper will investigate different forms of multi-tiered labour market governance systems to draw lessons for possible E(M)U-wide employment based automatic stabilizers - and especially it will review experiences with issues of moral hazard. Different forms of multi-tiered governance relate to possible European schemes in different ways. First of all, the federal form of labour market governance decentralisation of the United States forms the inspiration for the works by Dullien. Arguably, the way in which the American states and the federal level relate to each other is more akin to the relationship between the member states and the supra-national level of the EU than how municipalities and centralized governments relate to each other. The relation between the American states and the federal government (the leeway they enjoy in labour market governance) but also the size and demographic characteristics resemble the EU member states more closely than the characteristics of municipalities do. In order to assess whether we can draw any lessons from the U.S. experience we need to understand the institutional dimension of the U.S. experience. Secondly, the way in which municipalised or regionalised EU member states deal with issues of moral hazard might provide valuable insights for any policymaker contemplating supranational schemes. The European experiences are, thus, very relevant as well. Thirdly, any European scheme needs to take account of the variety of labour market governance in the European Union itself. In other words, the design of an E(M)U-wide scheme should accommodate or at least recognise the variety of its member states. This paper itself does not represent the full diversity of EU member states, it only deals with a subset of the possible range of constellations. This paper will proceed in the following manner. Firstly, a theoretical framework will be constructed in order to understand the basic concepts inherent to multi-tiered labour market governance systems. Secondly, this theoretical framework will be used to select cases which represent the different forms of multi-tiered governance models. Thirdly, the institutional framework of the cases will be analysed. The insights gained from the cases will be combined with the theoretical framework in the ‘results’ chapter. Finally, the conclusions and pointers for further investigation will be outlined in the last chapter.