The Swiss Road to Activation Legal Aspects, Implementation and Outcomes

Activation is a relatively recent development in the decade-long process of welfare state building in Switzerland. Traditionally, like in most other continental European countries, social pohces have been of a compensatory nature. Based on the social insurance framework, Swiss social protection has provided replacement income to those unable to work. Its coverage includes the key traditional social risks old age, invalidity, industrial injury, sickness, long-term care and unemployment, which makes the Swiss welfare state a standard continental European social protection system1. 

These three peculiarities of the Swiss welfare and labour market regime are crucial to the analysis of activation in that country. Federalism and the large role played by private sector insurers are obstacles to a coherent activation policy for some categories of non-working individuals which are catered for by regimes obeying different masters. 

A liberal labour market regime is also an important feature of the context in which activation takes place. Little regulation means that during expansionist cycles, job creation is stronger, also in the low-skill service sector. Job creation in the low-skill service sector is further facilitated by relatively low non-wage labour costs and a very low VAT rate, currently set at 7.6% for most goods and services 

Activation was introduced in Swiss social policy in the early 1990s, after a quick and impressive rise in the unemployment rate. Initially, this instrument was applied to unemployment insurance only, but the idea has since spread to other areas of the Swiss welfare state, most importantly social assistance and invalidity insurance. As will be shown below, these two schemes have seen their caseload increase dramatically over the last decade. The rise reflected what had happened with the unemployment rate, but with a 2-3 year time lag, suggesting that some fundamental transformation of the labour market has occurred (see Fig. 9 below). 

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The Swiss Road to Activation Legal Aspects, Implementation and Outcomes... 

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