Introduction

In the 1980s, the Netherlands was one of the first countries in Western Europe to adapt its industrial unemployment provision system to the requirements of a new ‘post-industrial age’ (Clasen and Clegg, 2011a). By drastically reforming the unemployment insurance system, it was opened up to a growing number of temporary, flexible and part-time workers in the tertiary sector (Hoogenboom, 2011). In the next decade, by means of several labour law reforms, the Dutch labour market was made more flexible, resulting in rapidly growing numbers of temporary and part-time workers, as well as self-employed workers without employees (De Beer, 2011).

In the same period, the Netherlands also became one of pioneering countries in the development of ‘activation policies’ in the European Union (EU), that is, of active labour market policies (ALMPs), which, unlike ALMPs in earlier times, combine ‘incentive reinforcement and employment assistance’ (Bonoli, 2010: 450). In the late 1990s, huge investments in activation policies caused government spending on ALMPs to rise from 0.3% of gross national product (GNP) in the late 1980s to more than 0.5% in 2000. Although the proportion fell to 0.4% in the early 2000s due to falling unemployment rates and cutbacks imposed by centre-right governments on ALMP spending, the Netherlands remained one of the Organisation for Economic Co-operation and Development (OECD) countries spending most on ALMPs (OECD, 2007).

However, in the years preceding the 2008 financial and economic crisis, enthusiasm for both flexibilisation and activation had cooled in the Netherlands. Trade unions and populist political parties warned about the insecure position of the rapidly growing number of employees with precarious jobs and of involuntary self-employed workers without employees. Under electoral pressure, the centre parties also gradually withdrew their support for further flexibilisation of the Dutch labour market and cutbacks in unemployment protection.

At the same time, the results of the new activation programmes, which were basically meant to compensate for the growing flexibility of the Dutch labour market by facilitating job-to-job mobility, turned out to be disappointing. While on the eve of the financial and economic crisis in the Netherlands, the contours of a new ALMP paradigm were discussed, its implementation was thwarted by the consequences of the crisis for the government budget.