Exclusion and activation. Education and labour market policy as measures against exclusion of people from the labour market in Sweden and the Nordic countries

2009-2014

Olof Bäckman, Institute for Futures Studies

The overarching purpose of the research project was to investigate implications of globalization on employment, income and social exclusion primarily among people with a weak position on the labour market. The project has been particularly focused on youth, the poorly educated and migrants. These groups, who traditionally have had problems finding foothold on the labour market seem now to have become even more vulnerable. However, there are strong indications in earlier research that the degree of precariousness to a large extent depends on the institutional set-up in societies. We may assume that the institutions of education and active labour market policy are of particular importance in this respect.

The Nordic countries are similar in many respects but differ concerning some aspects of both educational systems and active labour market policy. Comparisons of these countries can thus help us gaining improved knowledge of how these particular institutional differences affect individual life chances. The perhaps most obvious difference between the Nordic countries is the importance of the apprenticeship system for vocational education at the upper secondary school level which we find in Denmark and Norway, whereas this type of education has for long been primarily school based in Finland and Sweden. There are also interesting differences in active labour market policies.

The project has utilized the encompassing sources of administrative data available for research in the Nordic countries and we have spent considerable time creating reliable and comparable measurements based on these types of data. The Swedish research group (Olof Bäckman, Tomas Korpi and Renate Minas) has during the whole duration of the project collaborated closely with researchers in Denmark (Vibeke Jakobsen, Copenhagen), Finland (Eva Österbacka, Turkuu) and Norway (Espen Dahl, Oslo and Thomas Lorentzen, Bergen).

Three important results

An important result from the point of view of research practice is the development of the so called SELMA-model for measuring labour market attachment at the individual level with administrative data and to make it comparable across the four Nordic countries represented in the project (Denmark, Finland, Norway and Sweden). The model has been used in several of the studies we have produced and has been tested for validity in an appendix to (5) in the list of publications. Among other things, the model produces small differences between the countries in the proportion of youths outside both the labour market and the educational system. This is quite contrary to what we find if we compare official youth unemployment rates.

Another important result linked to this is that the way countries organize vocational education at the upper secondary level does not seem to affect exclusion risks of dropouts. The exclusion risk in this group is highest in Norway (primarily among women) and lowest in Sweden. The lower risk among Swedish dropouts seems to a great extent to be explained by the fact that here dropouts to a larger extent re-enter education and also that they succeed in graduating. The functioning of the Swedish adult educational system seems to be of particular importance in this respect.

Our comparative studies of the chances of immigrants on the labour markets of Denmark, Norway and Sweden reveal that the more restrictive immigration policies in Denmark, with e.g. reduced levels of means tested social assistance benefits for immigrants, did result in a slightly higher labour force participation rate among non-western immigrants. However, the increase of employment almost exclusively took place within very low paid jobs and/or short term employment. This in turn has boosted income inequality in the lower fractions of the income distribution in Denmark.

New research questions

The high dropout rates and the more severe consequences of dropouts found in Norway raise several questions. For example, the flow between educational tracks at the upper secondary level is high, probably higher than in the other countries, and the implications of this both in terms of dropout rates and exclusion risks are not yet analysed.

It is primarily the high exclusion risk among female dropouts that drive the Norwegian results and why this is the case we have not been able to find out within the project.

As already mentioned, the lower exclusion risk level among Swedish dropouts can to large extent be explained by a successful system for adult education which manage to provide a second chance for many dropouts. During the last 7-8 years we have witnessed cut-backs in the adult educational system and the implications of this have not been analysed in the project since we have not had access to data which cover this period.

Another dimension in need of further analysis is long term consequences of institutional differences and reforms. How do labour market careers develop for former students in the four countries, and how does labour market attachment among immigrants develop after the reforms during the first years after the turn of the century. These questions have been frequently discussed within the project, but which due to lack of both time and resources have remained unanswered.

These are all important questions for future research which should be analysed comparatively. Administrative data that can be used for analysing these issues exist.

The two most important publications

The analysis of school dropouts has been published in the Institute for Futures Studies' working paper series as "Dropping out in Scandinavia. Social Exclusion and Labour Market Attachment among Upper Secondary School Droupouts in Denmark, Finland, Norway and Sweden". A revised version has been submitted for publication in an international journal. A popularized Swedish version of the paper will be published in an anthology on vocational education during spring 2014.

In a research report to the Nordic Council of Ministers - "Att möta globaliseringen. Utbildning, aktivering och social exkludering i Norden" - all results from the project have been synthesized and related to other research within the areas of interest. The report will be completed during spring 2014.

The diffusion of research results has besides publication of reports, articles and book chapters, been accomplished by presentations at conferences and other public events. Members of the project have presented research results in Bamberg, Bergen, Berlin, Copenhagen, Göteborg, New York, Oslo, Poznan, Stockholm and Umeå.

Publications

1.    Bäckman, O., V. Jakobsen, T. Lorentzen och E. Österbacka (2014) ”Early School Leaving and Labour Market Inclusion in the Nordic Countries” kommande i R. Halvorsen och B. Hvinden (red.) Youth, Diversity and Employment: Comparative Perspectives on Labour Market Policies, Cheltenham: Edward Elgar Publishing.
2.    Bäckman, O., V. Jakobsen, T. Lorentzen, E. Dahl och E. Österbacka (2011) “Dropping out in Scandinavia. Social exclusion and labour market attachment among upper secondary school dropouts in Denmark, Finland, Norway and Sweden”, Institutet för framtidsstudier, Arbetsrapportserie 2011:8.
3.    Bäckman, O., V. Jakobsen, T. Lorentzen, E. Österbacka och E. Dahl (2014) ”Avhopp från gymnasieskolan i Norden. Omfattning och konsekvenser”, kommande i A. Panican (red.) Yrkesutbildning för morgondagens arbetsliv? Stockholm: Dialogos.
4.    Jakobsen, V., T. Korpi och T. Lorentzen (2014) ”How immigrants fare in the labour market and across the income distribution in the Scandinavian countries.” Manuskript.
5.    Korpi, T., O. Bäckman och R. Minas (2014) Att möta globaliseringen. Utbildning, aktivering och social exkludering i Norden, kommande, Forskningsrapport, Köpenhamn: Nordiska ministerrådet.
6.    Korpi, T., V. Jakobsen, T. Lorentzen och E. Österbacka (2014) “Decomposing earnings inequality in Nordic countries.” Manuskript.
7.    Korpi, T. V. Jakobsen och T. Lorentzen (2014) ”Earnings volatility in Nordic countries.” Manuskript.
8.    Minas, R., O. Bäckman, V. Jakobsen, T. Korpi, T. Lorentzen och T. M. Kauppinen (2014) “Rescaling inequality? Welfare reform and local variation in social assistance payments” kommande i K. Farnsworth, Z. Irving och M. Fenger (red.) Social Policy Review 26. Analysis and Debate in Social Policy 2014. Bristol: Policy Press.