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Kela boss: Activation model sees no major change in jobseeker attitudes

Unemployed persons who actively sought work from the beginning of the year were the same ones who had previously vigorously pursued employment, according to initial data from the state benefits agency Kela.

Nainen työvoimatoimistossa.
Image: Roni Rekomaa / Lehtikuva

Finland’s Social Insurance Institution (Kela) has estimated that half of clients receiving unemployment benefits have met the criteria for maintaining their benefit levels according to the government’s recently-introduced activation model.

The model seeks to encourage the unemployed to more actively seek occupation by working for 18 hours, participating in specific job-promoting training or engaging in entrepreneurship over a three-month period on pain of having their benefits cut by 4.65 percent.

According to Kela, some 94,000 unemployed jobseekers now stand to get their benefits cut because they have not met the criteria.

Kela said that some 187,400 customers receiving unemployment benefits were covered in the three-month evaluation period that ended in March.

Youth, women more active than others

Pasi Pajula, head of Kela’s Centre of Expertise, said that it is too early to say whether or not the so-called activation model has affected jobseekers’ enthusiasm.

“There has probably been some minimal increase [in activity] as a result of the activation model, but no significant change in behaviour has been observed on this basis,” Pajula commented.

“It seems that people who have been active before are still active. So young adults and women are on average more motivated than men and the elderly,” he added.

Pajula declined to comment on whether or not the new rules have been successful.

“That is very difficult to estimate because this approach came into force in one fell swoop across the entire country. At the same time there have been changes in employment and economic conditions that have also had a powerful impact on how people can find work.

In other words, it is not possible to reliably assess the impact of the activation model alone based on this information,” he explained.

Growing need for income assistance

As the activation model takes hold, the social support agency Kela said that it is bracing for some unemployed people to turn to it for additional income support as their unemployment benefits are reduced due to inactivity.

The agency said that roughly one-third of recipients of unemployment benefits will also receive additional income support.

“As early as the legislative drafting stage we estimated that there would be a need to increase income support. It is a matter of individual behaviour how many will apply for income support because of this [benefit cut],” Pajula noted.

The Kela official said that it would also be premature to assess how far the new model achieves its stated goals. The government has said that the measure aims to ensure that 8,000 people join the ranks of the employed.

“It is too early to evaluate [any increase in employment] on the basis of this initial data especially since we lack comparative figures from work-related unemployment funds,” he added.

Union-administered unemployment funds are used to pay earnings-related unemployment benefits. Information about the behaviour of recipients of earnings-based unemployment benefits during the activation model evaluation period will be available later in the spring.

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