Design and redesign of a quasi-market for the reintegration of jobseekers: empirical evidence from Australia and the Netherlands

Abstract

Some Western countries have linked their policy on reintegrating jobseekers to far-reaching changes in the design of the system. The most striking of these is the introduction of a market system by privatizing the implementing organizations and allowing them to compete with each other and other providers. Prototypes for this development are Australia, with its Job Network (introduced in 1998), and the Netherlands, which has a privatized reintegration market (2001). The aim in introducing these market systems is twofold: to improve the effectiveness and efficiency of implementation while increasing the responsiveness of the service providers and the freedom of choice of jobseekers. In this paper we analyse the conditions for and functioning of the market arrangements in both countries from the theoretical perspective of quasi-markets. This analysis shows that the results of the introduction of market forces have so far been relatively modest. The Australian case displays significant efficiency gains, but this was partly at the expense of quality. Problems with risk selection, such as ‘cherry picking’ and ‘parking’ (problems which also affect the public systems) have still not been adequately resolved. The principle of market forces places special demands on the design and organization of the specific market arrangements.