Beyond Social Security: The Economic Value of Giving Money to Unemployed People

Within a traditional social security perspective, the quality of national income maintenance schemes tends to be assessed and compared as far as the degree of income protection is concerned. The respective embeddedness of transfer programmes within national political economies has received much less attention. By contrasting unemployment insurance systems in three European countries, this article discusses both sets of cross-national differences with an emphasis on identifying country-specific roles of benefit programmes, over and above the provision of transfers for those out of work; that is as substituting employment regulation and contributing to labour mobility and maintaining collaborative industrial relations in Denmark; as reinforcing work incentives and allowing wages to fall, particularly for younger workers in Britain; and acting as an instrument for workforce restructuring by circumventing labour law regulation in Germany. These functions are rarely addressed in cross-national comparisons of income maintenance systems but are crucial for a fuller understanding of the role of social security in modern capitalism.