Dualising activation. Responses to unemployment and mental health-related disability retirement in Finland at the turn of the millennium

ABSTRACT

‘Activation’, referring to measures that increase the labour supply, has recently been a key concept in discussing employment in the developed countries. This paper analyses the motivations behind activation measures targeted at the unemployed as well as persons disabled due to mental health problems, as expressed through legislation and national policy documents following the 1990s recession in Finland. The analysis points out that the activation measures implemented in Finland at the turn of the millennium have had a tendency to reinforce ‘dualisation’, that is, to polarise citizens as either labour market insiders or outsiders. The analysis shows that activation also involves labels that fix blame on the people themselves for their situation. Hence, the activation measures have increased the risk of exclusion for many of the persons they were supposed to help. The results are discussed in the context of the broader literature on the Nordic welfare and labour market model.

KEYWORDS:

• Activation
• Finland
• unemployment security
• disability pensions
• mental health
• dualisation

Acknowledgements

We would like to thank Lotta Haikkola, Ilpo Helén, Åsa Lundqvist, Anna Metteri, Sue Scott, the CEACG-seminar, the NordWel-Helsinki-seminar and the anonymous referees for their helpful comments at different stages of the paper.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Anna Alanko is a Master of Social Sciences and a doctoral student in the University of Helsinki, Centre for Research on Addiction, Control and Governance (CEACG). Her main areas of research are mental health, mental health policy and the Nordic welfare systems. She has worked within the Nordic Centre of Excellence: The Nordic Welfare State – Historical Foundations and Future Challenges (NordWel).

Sami Outinen is a Doctor of Social Sciences and social science historian at the University of Helsinki. His main areas of research are social democracy, employment and economic policy, Nordic welfare systems and labour market development. He has worked within the Nordic Centre of Excellence: The Nordic Welfare State – Historical Foundations and Future Challenges (NordWel).

Notes

1 These measures stemmed from neoliberal and neoconservative agendas in the USA in the 1980s. They were adopted in Finland via the recommendations of the OECD and European Union (Keskitalo 2008).

2 The division between depression and other mental health problems is central to the way mental health is discussed in Finland, and to the argument presented in this paper. The essential difference is that whereas the symptoms of depression often do not include psychotic symptoms or intellectual disability, the most common diagnoses classified as ‘mental health reasons other than depression’ are schizophrenia and intellectual disability. Among those on disability retirement for mental health reasons, those with depression tend to have closer connections with working life than those with ‘mental health problems other than depression’.

3 BB are available to unemployed persons who would have been entitled to ERB if they had been members of an unemployment fund.

4 The Finnish national pension has included an additional ‘guarantee pension’ since 2011. The total monthly amount for these in 2015 was €766.85, compared to the basic-level unemployment benefits which averaged €703 the same year (pre-taxation figures) (SII 2016). The support leaves the recipients of both benefits clearly below the national poverty line, which in 2014 was €1190 per month after taxation (OSF 2016). The recipients are, however, usually entitled to family and housing benefits and may apply means-tested income support.

5 A reform in the mid-1990s removed the until then universalist NP from those entitled to a certain amount of EP. The change appeared to be a cost-cut exacted from the middle class; in practice, it was the opposite, as it enabled lower rises in the national pensions than in the employee pensions (GP 119/1995).

6 The policy is based on the monetarist assumption that increasing the supply of labour increases employment in the long run. It rejects the Keynesian idea of increasing workforce by increasing public expenditures during economic downturns.

7 Some of the unemployed were traditionally re-educated. However, in this case ‘training’ generally meant ‘workfare’, working without an employment contract. The participants were not paid a salary and could not enjoy other rights guaranteed to employees according to collective agreements and the law (see Julkunen 2001).

8 Kananen (2011) discusses the same activation reforms. However, he concentrates on the dynamics between income support and unemployment benefits.

9 According to official statistics, only 10,000–20,000 jobs were open at the time (Statistics Finland 2004: 385).

10 From 2008 onwards, Ministry of Employment and the Economy.

11 Moreover, the study only included EP recipients and hence the definition excluded those completely outside the labour market.

12 In Finnish, MASTO.