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The Marketization of Employment Services: Evidence from the UK, Germany, and Denmark
One trend across OECD countries since the late 1990s has been the marketization of employment services. Intense price-based competition is increasingly used to govern these services. Based on an in-depth three-country comparative project, this paper examines the extent and trajectory of marketization in Denmark, Germany, and the UK since the early 2000s, countries that represent different regime types under both welfare regimes and varieties of capitalism theories. The paper also examines the effects of marketization trends on front-line staff and the character of services. We draw on qualitative interviews with public-sector purchasers of services and for-profit and non-profit providers and a detailed analysis of publicly available statistics and documents.
Marketization has taken place in employment services in each country. However, the marketization trends and their effects vary across the three countries due to a wide range of labor market and welfare-state institutions. For example in the UK marketization of employment services seems to intensify insecurity, reduce the salience of collective bargaining and create opportunities for profiteering by private owners of provision. Furthermore, for the unemployed, marketization seems to undermine citizen entitlements by producing more standardized programs of support, as well as creaming and parking effects that penalize those furthest from the labor market. These effects are to some extent also visible in the two other countries, even in Denmark and Germany representing very different welfare state regimes. However, the effects of marketization, especially on working conditions and the services delivered are taking other forms, making these effects more modest.