Objectives of activation policies

On the macro level, the effect of activation policies is largely mediated through the labour market environment, but activation strategies are designed to lower unemployment or non-employment, raise overall employment and improve the fiscal balance of the welfare state at least in the long run. Hence, increasing labour market entry and participation is the major concern of activation policies, and for this purpose options of unconditional benefit receipt for the working-age population are to be closed. 

But ending unemployment or inactivity is an important goal not only in terms of income and earnings but also in terms of life satisfaction and well-being as unemployed people are in general more unhappy, less healthy and socially more isolated than employed people (Layard 2005 Clark and Oswald 1994). 

Bringing more people back into work is also seen as the major instrument to combat poverty as for most families paid work remains by far the most important source of income, and the loss of a job generally results in a considerable decrease in income and, as a consequence, in a higher risk of being poor. Therefore, taking up a job reduces the poverty risk significantly (Forster and Mira d Ercole 2005). 

Through improving access to work or subsidised work opportunities, activation strategies can help strengthen societal cohesion and alleviate potential tensions between tax payers and benefit recipients. This implies a re-orientation of social citizenship, away from freedom from want towards freedom to act while continuing to guarantee a rich social minimum. 

---