The Activation Dilemma: Reconciling the fairness and effectiveness of minimum income schemes in Europe, by Amilcar Moreira

Policy Press, 2008, ix + 155 pp, hbk, 1 84742 046 6, £65

In the UK the 1995 Jobseekers Act made receipt of benefit dependent on searching for and accepting available jobs, and the later New Deal provided work and training opportunities for unemployed people. Most other European countries have seen similar changes, the universal aim being to ‘activate’ and ‘reintegrate’ unemployed people.

In this important book Moreira distinguishes between compulsive ‘workfare’ and an ‘activation’ characterised by both positive and negative incentives, and then explains how such activation relates to Europe’s different minimum income schemes. He finds particularly interesting the variety of relationships between rights and responsibilities in the different schemes.

At a theoretical level Moreira finds helpful Durkheim’s theory of social justice, in which the individual has a right to personal development. This requires someone’s basic needs to be met, and it also requires people to exploit their talents so that other people can develop theirs. This theoretical position coheres with the more empirical material in the second part of the book. Here the author tests the hypothesis that minimum income schemes which promote personal development are more likely to forge positive relationships between individuals and the labour market. The author develops indicators for the extent to which a minimum income scheme respects a person’s right to personal development and also for the scheme’s employment effectiveness and gathers evidence in relation to the indicators. The evidence doesn’t confirm the hypothesis, but it does show that for the majority of indicators which measure a scheme’s respect for personal development (adequate income, level of discretion in implementation, opportunities for employment and training, type of sanctions applied) both respect for the right to personal development and employment effectiveness can be found together as characteristics of a minimum income scheme. Only for one indicator does this relationship not hold. Only if an individual’s right to choose not to be employed is restricted can a minimum income scheme combine employment effectiveness with respect for the right to personal development (measured by the other indicators).

Finally, Moreira suggests that employment and other legislation should be tested to see whether greater respect for the right to personal development might lead to greater economiceffectiveness.

There are two flaws in the argument. Firstly: near the beginning of the theoretical section Moreira evaluates Van Parijs’s arguments for a Citizen’s Income and argues that an unconditional income unfairly favours those who don’t wish to work. It doesn’t, of course. It treats everyone fairly in relation to the receipt of an income. What does treat unfairly those who want to work is a means-tested minimum income scheme which results in 5p of additional net income for every additional £1 of gross income. Secondly: Moreira doesn’t ask himself about the employment effects of the universal benefit we do have: Child Benefit. This is the only benefit not withdrawn as other income rises and it is an important factor in lone parents’ labour market decisions.

The book is a record of important research and the conclusions are useful, but both the theoretical and the empirical material relates to the situation as it is rather than asking such questions as: If marginal deduction rates were to be reduced by a Citizen’s Income replacing means-tested benefits and tax allowance, then would such a positive employment incentive make many of today’s negative incentives unnecessary? We need Moreira to exercise his critical intellect and rigorous methods on such additional questions.