Publication Date

November 2007


[Excerpt] Like other Western European countries, the Netherlands has adapted and reformed its social security system since the 1980s. As international competition intensifies, a significant share of industrial production has moved to low-wage countries. The high rate of unemployment that ensued caused a dramatic increase in claims for incapacity benefits and later unemployment benefits. Government spending on social security skyrocketed as a result. Consecutive governments wanted to adapt the system to the trends towards flexibility and individualisation of labour market relations. Their efforts culminated in a complete overhaul of the system in 1987.

Government spending on social security decreased after the system was reformed, but the number of benefit claimants continued to rise. By the end of the 1980s, the proportion of non-active members of the labour force had increased substantially, as more and more workers claimed incapacity benefits. Now, along with income protection, prevention and reintegration were being incorporated into the system. Another important new goal was activation (i.e. encouraging participation in the workforce), which reduced social exclusion and strengthened the income position of those on benefits by helping them get back to work. This shifted the focus towards the conduct of all the parties involved: employers and employer organisations, employees and the trade unions, benefit claimants and implementing bodies. The measures taken in this period were of a different nature than the reforms of 1987. The key issue now was to increase each party’s vested interest in reducing social security benefit claims.