‘Activation’, referring to measures that increase the labour supply, has recently been a key concept in discussing employment in the developed countries. This paper analyses the motivations behind activation measures targeted at the unemployed as well as persons disabled due to mental health problems, as expressed through legislation and national policy documents following the 1990s recession in Finland. The analysis points out that the activation measures implemented in Finland at the turn of the millennium have had a tendency to reinforce ‘dualisation’, that is, to polarise citizens as either labour market insiders or outsiders. The analysis shows that activation also involves labels that fix blame on the people themselves for their situation. Hence, the activation measures have increased the risk of exclusion for many of the persons they were supposed to help. The results are discussed in the context of the broader literature on the Nordic welfare and labour market model.

Activation has been discussed in numerous studies concerning employment and labour market policies adopted since the 1990s. Previous studies have called attention to the various meanings of the concept (Clasen and Clegg 2006; Kananen 2011). In the present paper, we define activation as means which aim to increase the supply of labour, and we divide the activation measures in terms of being ‘restrictive’ or ‘providing’. By ‘restrictive’ activation, we refer to measures that use ‘sticks’; in this case, restricting the availability or tightening of the eligibility criteria of social benefits, or ‘workfare’, demanding work engagement as a condition for receiving benefits.1 By ‘providing’ activation, we refer to measures that use ‘carrots’, for example, public investments to improve the employability of working-age people. (Cf. Taylor-Gooby 2008; Caswell et al.2010; Jenson 2012; Morel et al.2012.)

As well as emphasising the importance of understanding the above-mentioned division between these two types of activation measures, our analysis will also question the observation that activation necessarily improves the economy or helps the unemployed (e.g. Kvist 2001). The results of the analysis presented in this paper are more in line with interpretations arguing that the practised activation measures may further marginalise the ‘activated’ (Gallie 2004; Elm Larsen 2005; Holmqvist 2010; Blasco and Rosholm 2011). Correspondingly, the measures have been criticised for (a) tending to concentrate on ‘activation’ operations instead of helping the unemployed find work (Haikkola 2015), (b) perceiving the main problem to be the benefit claimants themselves rather than their unemployment, (c) being unable to tackle insider–outsider divisions, and (d) embodying a generally neoliberal agenda (Clarke 2005; Bambra and Smith 2010; Caswell et al.2010; Kananen 2012).

The paper presents a historical policy analysis of the different aims of regulating labour market participation among two groups that have been outside, or were at risk of ending up outside, the labour market at the turn of the millennium: the unemployed and those threatened by working disability due to mental health problems. Often characterised as the least ‘Nordic’ of the Nordic welfare states, Finland is in itself an interesting case, one which has often been overlooked in discussions on ‘activation’ in the Nordic countries (see e.g. Kildal 2001; Halvorsen and Jensen 2004; Clasen and Clegg 2006).

Excluding full-time studying, unemployment and disability pensions are the first and second most common reasons for working-age people not to work in Finland (Labour Force Survey 2015), and hence unemployment and work disability are continuous challenges in today's Finland (population 5,490,000). In 2015 the average number of unemployed job seekers was 351,900 (MEE 2016). At the end of 2014 the number of disability pensions for all reasons was 228,252, and conditions classified as ‘mental and behavioural disorders’ were the most common primary diagnoses with a proportion of 48% (109 606) of all disability pensions (OSF 2015: 92). The proportion of mental health problems as the reason for disability pension has grown drastically in recent years (Nyman and Kiviniemi 2014).

To date, unemployment and inability to work have mostly been analysed as separate phenomena. However, authors such as Bambra and Smith (2010) and Barbier and Ludwig-Mayerhofer (2004) have previously addressed the use of activation measures in both unemployment and disability contexts. Mental health problems and unemployment also correlate (Ervasti and Venetoklis 2010; OECD 2010; Pensola et al.2010). It has been found that in Finland nearly half of disability retirees have experienced unemployment, and the percentage is especially high for those retiring due to mental health reasons other than depressive disorder2 (Blomgren et al.2011).

The relationship between unemployment and disability has also been discussed in previous studies. It has been proposed that unemployment ‘covers’ disability; that among the ‘unemployed’ there are people who in reality are unable to work and should hence be categorised as ‘disabled’ (Gould 2001; Hytti 2006; OECD 2010). On the other hand, as will be discussed later in this paper, groups of long-term unemployed have shifted to disability retirement to reduce the number of unemployed in Finland (MOL 2001a,b, 2003, 2004; cf. Outinen 2015).

The present study elaborates on these discussions by distancing itself from the categories of ‘disability’ and ‘unemployment’ (cf. Kananen 2011). For our purposes, it is essential to note that the groups, or rather the categorisations, of labour market inactivity form a continuum. The purpose of the paper is to discuss this continuum, and not answer the question of whether ‘unemployment’ covers ‘disability’, or vice versa.

The analysed period begins at a paradoxical moment in the mid-1990s: following the deep recession of the early 1990s, the country's economy began to recover in the middle of the decade but without substantially lowering unemployment. Another paradox was that even with the unemployment and retirement policies having been reformed to encourage participation in salaried work, the number of disability retirees grew.

The analysis presented here shows, first, that the activation policies in Finland for the unemployed and those at risk of disability retirement or retiring because of mental health problems have several similarities. Second, it seems that the activation measures have tended to polarise citizens by aiming restrictive activation at the disadvantaged and providing activation at the favoured. Third, in both cases, some of the disadvantaged individuals’ problems in the labour market have been attributed to themselves: poverty and marginalisation resulting from being outside the labour market has been seen to result from the individuals’ ‘unwillingness’ or ‘inability’ to work. Fourth, due to the Finnish social security system being divided into basic and earnings-related systems, both the unemployed and those at risk of losing their ability to work for mental health reasons have received better services and higher benefits when they have earlier had a relatively higher income and a longer work history. This has resulted in a separation of individuals into the relatively favoured and the further marginalised, with the latter usually having a short or no working history. Hence, the analysis suggests that the activation measures have increasingly led to a ‘dualisation’ that divides persons and their entitlements according to their status in the labour market and polarises them as ‘insiders’ or ‘outsiders’ (cf. Emmenegger et al.2012). Thus, our analysis confirms earlier criticism which has argued that activation measures seem unable to affect the insider–outsider division. In fact, in the cases we have analysed here, the measures have ended up exacerbating the division.

As mentioned above, Finland experienced a severe economic recession in the early 1990s during which the unemployment rate increased from 4 to 20%. The Finnish economy began to recover in 1995 but unemployment remained high: above 10% despite steady economic growth (2–6% per annum), until the first years of the new millennium. By the end of the 1990s, many had been unemployed for several years and had hence become ‘long-term unemployed’. Some 140,000 people (30% of all unemployed) had been continuously unemployed over a year in 1994, and the figure was still 72 000 (25%) in 2003 (Statistics Finland 2004: 313, 385–6).

The Finnish national unemployment security system has consisted of two parts since its inception in the early 1960s. The unemployment benefits depend on an applicant's relation to the unemployment funds, as well as the length of both the preceding working career and the unemployment period. Earnings-related unemployment insurance benefits (hereafter ERB) are provided to the members of sectoral unemployment funds, and basic unemployment benefits (hereafter BB) to all unemployed persons who do not fulfil the qualification criteria of earnings-related benefits or are not members of unemployment funds. The benefits were further divided by a reform in 1994, but this did not affect the basic dual structure of the system.

Along with the 1994 reform, the basic benefits were divided so that the unemployed who did not qualify for either ERB or BB3 were provided a benefit renamed ‘labour market subsidy’ (hereafter LMS). Hence, the LMS category came to include the most disadvantaged unemployed.

In 1996, shortly after the recession, there were some 207,000 recipients of basic-level unemployment benefits (BB or LMS), and, despite decent economic growth, still 163,000 in 2003 (Statistics Finland 2004). This means that a relatively large group of unemployed remained in a disadvantaged position as receiving basic-level unemployment benefits meant that one's income remained below the poverty line (measured by current EU standards; incomes below 60% of average net income; Outinen 2012).

As with the unemployment security system, the Finnish pension system has consisted of two parts since the 1960s. Those with a working history receive an earnings-related employee pension (hereafter EP), and those without a working history the basic-level national pension (hereafter NP).4 Those who retire with a partial or short working history receive a combination of the employee pension and the national pension.5

The disability retirement criteria in the Finnish pension legislation were tightened in 1996 with the declared aim of increasing participation in salaried work (Hannikainen and Vauhkonen 2012; Hannikainen 2013), but the change has been interpreted as a change in wording rather than a paradigmatic shift towards activation (van Gerven 2012). After the change, disability retirement due to mental health reasons and especially depressive disorder paradoxically began to rise. In the years following the reform of 1996, this increase in disability due to mental health reasons and particularly depressive disorder was identified as a core problem in Finnish mental health policy (MSAH 2005, 2008, 2011; cf. footnote 1).

As explained in footnote 1, the categorisation between ‘depression’ and ‘other mental health reasons’ is at the core of our analysis. The disability pensions issued for mental health reasons are broadly divided into two types. Those who retire due to depressive disorder mostly have a longer working history and are hence within the earnings-related EP system. Those who retire for other, generally more serious, mental health reasons mostly do not have a long working history and hence they receive either a combination of the EP and NP or only the basic-level NP (Blomgren et al. 2011). This arrangement means a smaller amount of income support for those experiencing generally more difficult mental health symptoms. A study on the use of different pension schemes found particularly the lowest pension income to be associated with a more disadvantaged status, but that those with the lowest pensions were most satisfied with their life and perceived their working capacity as good (Karisalmi et al. 2009).

The data included Finnish law texts, committee reports, and ministry programmes. In the case of unemployment security, the data related to acts in effect during the 1990s and early 2000s. Mental health policy was examined using policy documents.

The analysis combined and compared the development of the unemployment security and mental health policies in Finland at the time. It focused on problem-setting and characterisations of the groups at the core of the ‘problems’, that is, the unemployed and the disability retirees. The analysis was inspired by the governmentality analysis method proposed by Bacchi (2009), and by the sociosemiotic analysis of modalities (Sulkunen and Törrönen 1997). We applied these traditions to find out how the groups of people at the focus of our analysis (i.e. the unemployed and the potential disability retirees) were represented and, especially how their ‘willingness’ and their ‘abilities’ were characterised in the policy texts.

We asked the following questions during the analysis: What do the policies suggest, and what kind of conceptualisation of the ‘unemployment’ and ‘disability retirement’ do the suggestions reflect? Second, how are the unemployed and the disability retirees talked about? What are they seen to be willing and able to? The first part of the analysis focused on the proposals presented in the documents, which Bacchi refers to as ‘problematisations’. The second part focused on the characterisations of the target groups. The first part involved mapping the policy suggestions presented in the plans, while the second followed the targets of the policies, and how they were presented.

Below we begin with unemployment policy in the mid-1990s and finish by analysing mental health-related disability pension policy in the 2000s. In both policy spheres, the provision of unconditional benefits has been seen as a disincentive to participating in salaried work. This has led to dualising activation: in both policy spheres the better-off groups have been targeted by providing activation measures, and restrictive activation measures have been directed to their more vulnerable counterparts. In the sphere of unemployment policies, the focus has been on moving the most capable unemployed into salaried work and urging the more disadvantaged groups into the labour market by implementing benefit retrenchments and workfare measures. In the sphere of mental health-related disability pensions the focus has been on distinguishing the most employable workers and aiming to guarantee their possibility to continue in paid labour, while the disadvantaged have been left to minimum-level benefits and outside any measures. The analysed reforms and initiatives, their target groups and the types of activation they represent are listed in Table 1.

Table 1.
Dualising activation measures.
YearMeasureTarget groupActivation?
1992 Lengthening the waiting period for unemployment benefits for labour market newcomers The recipients of LMS (Disadvantaged unemployed) Yes, restrictive 
1994 Negative activation work-training programme for selected recipients of LMS The recipients of LMS (Disadvantaged unemployed) Yes, restrictive 
1996 Lengthening the qualifying period for ERB All unemployed Yes, restrictive 
1996 Making LMS conditional for young unemployed Young labour market newcomers with no occupational education (Disadvantaged unemployed) Yes, restrictive 
1993–1997 Renewing the national employment subsidy system All unemployed Yes, providing 
2001 ‘Pension is Possibility’ programme Disadvantaged with (mental) health problems No 
2004 Report published by the Finnish Centre of Pensions (FCP) All disability retirees Yes 
2005 The Finnish Ministry of Social Affairs and Health's reaction to disability retirement All disability retirees Yes 
2007 Report by the FCP, focusing particularly on depression The favoured with mental health problems Yes, providing 
2008 MAST established The favoured with mental health problems Yes, providing 
YearMeasureTarget groupActivation?
1992 Lengthening the waiting period for unemployment benefits for labour market newcomers The recipients of LMS (Disadvantaged unemployed) Yes, restrictive 
1994 Negative activation work-training programme for selected recipients of LMS The recipients of LMS (Disadvantaged unemployed) Yes, restrictive 
1996 Lengthening the qualifying period for ERB All unemployed Yes, restrictive 
1996 Making LMS conditional for young unemployed Young labour market newcomers with no occupational education (Disadvantaged unemployed) Yes, restrictive 
1993–1997 Renewing the national employment subsidy system All unemployed Yes, providing 
2001 ‘Pension is Possibility’ programme Disadvantaged with (mental) health problems No 
2004 Report published by the Finnish Centre of Pensions (FCP) All disability retirees Yes 
2005 The Finnish Ministry of Social Affairs and Health's reaction to disability retirement All disability retirees Yes 
2007 Report by the FCP, focusing particularly on depression The favoured with mental health problems Yes, providing 
2008 MAST established The favoured with mental health problems Yes, providing 

4.1. ‘Unwilling to work’: activation in the Finnish unemployment security system in the 1990s

We first look at the Finnish unemployment system's activation reforms. The reforms were presented by two Finnish governments: The Centre-Right government (1991–1995) and the Left–Right coalition government (1995–1999) during and after the recession. The focus of activating the unemployed was on the restrictive activation of those with the lowest income. The policy initiatives problematised the issue of unemployment as if the unemployment security per se would disincentivise the unemployed to work, and cuts to unemployment security were mostly presented as if they would activate the unemployed to seek jobs and decrease the unemployment rate.6

The first restrictive activation measure was taken in 1992 when unemployment had started to increase. The Centre-Right government at the time proposed to lengthen the period that labour market newcomers seeking unemployment benefits had to wait before being able to receive them. The government proposal and accompanying legal text targeted newcomers by arguing that the proposed restriction would prompt the youngest unemployed to seek work or further education (Government Proposal [hereafter, GP] 338/1992; Amendment of the Unemployment Security Act 1652/1992). Thus, the reform itself represented the restrictive form of activation, and presupposed that the labour market newcomers had to be urged to improving their labour market abilities.

The second activation measure was taken in 1994 when the Finnish government introduced a restrictive activation work-training programme for some LMS recipients. Participants in the work-training programme were given work in the public, private or third sectors, but they were neither paid a salary nor contracted to the employer, and they only received the LMS. This measure can be interpreted as ‘workfare’, and it was a novelty in the history of the Finnish social security system.7 The government proposal represented the idea that the unemployed had to be urged to work by strengthening the sanctions. It justified the reform by arguing that this measure would increase the participants’ employment opportunities, implying that the possibility of receiving unemployment benefits without working had prevented their employment:

[the work-training] [W]ould enable the work trainees to later sign a normal contract with their employers, assist labour market newcomers to find a suitable job and improve the occupational skills of the long-term unemployed. (GP 235/1993)

In addition, the subsequent Left–Right coalition government (1995–1999) implemented new restrictive activation measures.8 For example, it lengthened the qualifying period for ERB from 6 to 10 months. The previous availability of ERB for two years after six months in salaried work was characterised as too generous: it would provide ‘a relatively lengthy period of earnings-related social security after only a relatively short working history’ (GP 72/1996). Another restrictive activation reform was to make LMS conditional for under-25-year-old labour market newcomers with no occupational education. To receive LMS, they were now obliged to take part in education or training (GP 72/1996).

The coalition government's proposal further argued that the unemployment security system was not originally planned to function under the current circumstances of high and long-term unemployment, and that the unemployment security ‘had become expensive in an era of mass unemployment’ (GP 72/1996). It again considered that the unemployment benefits were too generous and a disincentive for employment.

The proposal put forward the idea that the unemployment security system ‘caused passive job seeking’ among unemployed people and ‘restricted the possibilities to improve the labour market eligibility of the unemployed’. It asserted that activation would ‘increase the incentives of the unemployed to take short-term jobs’. The proposal also accused the existing unemployment security system of favouring informal economic activity, because there were not enough incentives to inform public employment authorities about short employment periods, and wanted to ‘decrease the preconditions for a grey economy’. Finally, the government's proposition insisted that the existing unemployment security system ‘would encourage life-style unemployment’ (author's emphasis), and hence depicted the provision of unemployment security per se as leading to an undesirable way of life, that is to say, living from benefits (GP 72/1996).

By characterising the provision of unemployment security as a threat to peoples’ willingness to work, the later government of the 1990s attempted to activate those receiving LMS despite there being far fewer jobs than unemployed persons.9 Moreover, the activation measures of the previous Centre-Right government had not notably reduced the high level of unemployment. The later government continued implementing restrictive activation measures. It also emphasised individuals’ responsibility to earn their livelihood, implicitly blaming the unemployed themselves of prolonged unemployment periods, and even argued that some unemployed were criminals by suspecting that the current unemployment security system encouraged working in the grey economy. Hence, the government proposals implied that there had to be something wrong with the unemployed themselves (cf. Outinen 2012: 631).

As an exception to this restrictive activation trend, the Centre-Right and coalition governments used one providing activation measure in 1993–1997: they renewed the publicly paid added wages system. Its 1997 version, for instance, allowed for the paying of an employment subsidy (a) to employers who would create a new, mainly permanent job for an unemployed person, (b) to new entrepreneurs, or (c) for many kinds of training, rehabilitation and work-sharing measures usually lasting 10–12 months (Employment statute 130/1993; Employment statute 1363/1997). Altogether these publicly funded employment programmes lowered unemployment by 50,000–66,000 persons (2% of the workforce or as much as 10% of the unemployed) between 1994 and 1999 (Statistics Finland 2004: 386).

The earlier government in the 1990s seemed to believe that unemployment would fall by implementing new restrictive activation measures at that time of deep recession in Finland. The later government strengthened both the restrictive and providing activation measures. It created a circular justification by blaming the unemployed themselves for their lack of work, even if the activation measures had not managed to provide jobs for a clear majority of the unemployed.

All in all, the restrictive activation measures practised in Finland during the 1990s did not have a strong impact on the unemployment rate of the poorest unemployed. It remained high particularly among the most disadvantaged unemployed, the recipients of LMS. This concurrently reinforced the dualisation between the receivers of ERB and those of BB/LMS, and decreased the share of the former from 55% to 45% in 1993–1999 (Statistics Finland 2004: 386).

Even if the focus of unemployment policy was on the implementation of the Finland's new restrictive activation measures during the 1990s, most participants in the public employment measures were still activated under the category of providing activation, such as public sector employment programmes and re-education (Statistics Finland 2004: 386). However, this did not manage to mitigate neither the dualising activation of the unemployed (ERB receivers and the participants in providing activation measures vis-a-vis the participants in restrictive activation measures including long-term unemployed, labour market newcomers and temporary workers) nor the increasing division of the Finnish labour market into permanent and temporary workers (cf. Outinen 2015).

4.2. ‘Unable’ to work: disability retirement in Finnish mental health policy

In the case of disability retirement related to mental health problems, the emphasis was quite different from that of the unemployment security reforms. The focus of the activation reforms was to prevent the disability retirement of the relatively favoured, that is, those with mild and moderate mental health problems and particularly depression. The policies were promoted as encouraging the participation in work of people suffering from mental health problems, but on closer inspection they can be seen to exclude the relatively disadvantaged.

Despite the overall aim of activation described above, the Finnish Ministry of Labour (hereafter, MOL)10 launched in 2001 the programme ‘Pension is a Possibility’ (hereafter PePo), aiming to shift the older long-term unemployed with severe health problems to disability pension (MOL 2001a,b, 2003, 2004). The programme, which conflicted with all other declared aims, had two target groups: people with health problems relating to ageing or work-related injuries, and, secondly people without connections to working life who were characterised ‘unable’ to participate in the labour market:

The second target group are the long-term unemployed who typically have a collision of problems: marginalization from working life, long-term substance-abuse and/or mental health problems, difficulties in life management, fragmentary working life, weak vocational education and skills, and weak education possibilities. According to different experts, the mentioned target groups are often particularly difficult to employ, oriented to retirement, easy to identify due to prolonged unemployment. They are unable to work on the labour market in their own, in experts’ and in employers’ opinion. These persons’ remaining ability to work is usually so weak that they are not considered having realistic rehabilitation possibilities to working life. (MOL 2004: 2)

Soon after the PePo programme the stated focus shifted to the prevention of disability retirement. In contrast to the PePo programme, the documents discussing the prevention of disability retirement characterised those at risk of retiring because of mental health problems as victims of a non-activating disability pension scheme. The argument was that after increasing different activation measures, those at risk of disability retirement would be willing and able to ‘continue’ working. On closer examination, however, this did not encompass everyone.

The governmental policy to reduce disability retirement was influenced by a 2004 report discussing mental health and disability pensions, published by the statutory expert body Finnish Centre of Pensions (hereafter FCP). The report divided the disability retirees with mental health problems to two groups, of which one was favoured. The first group, the favoured, were those transferred to disability pension directly from working life who had had an income above the average. The second group had experienced long-term unemployment, had generally little contact with the labour market and can hence be perceived as relatively disadvantaged. (FCP et al. 2004: 30.)

In 2005, the Finnish Ministry of Social Affairs and Health (hereafter MSAH) also raised the issue of disability retirement and mental health problems. A memorandum was published which first discussed the disability retirement for any mental health reasons. Eventually the focus shifted to the particular status of depressive disorder, which was perceived, similarly to the previous FCP report, as more treatable than mental health problems in general. The working group stated that the target group, those suffering from depressive disorder, had a stronger relation to working life than did people suffering from other mental health problems. The disability pensions of the favoured would also generally be more expensive due to their belonging to the higher earnings-related EP pension scheme (MSAH 2005).

Another report by the FCP in 2007 focused especially on depressive disorder as a cause of disability retirement, aiming to detect how people retiring due to depression were different from other disability retirees (FCP et al. 2007: 15). The report repeated that those retiring due to depression were more connected to working life, had better income and were generally in a more favoured position than those retiring due to other mental health reasons.11 The report presented this difference as a reason to focus on depressive disorder.

Later the same year, 2007, the MSAH set an entire programme called ‘MAST’12 (MSAH 2008). The programme was explicitly based on the FCP (2007) report. It claimed to target the whole working-age population, and its key aims were to prevent depression-related disability pensions by disseminating information and education at workplaces and health care facilities. It argued that focusing on depression as the reason for disability retirement was important because those suffering from depression were perceived as more employable than those suffering from other mental health problems:

Those who had moved to disability pension because of depression also had a better education level than other people on disability pension, and often a relatively long working career. (MSAH 2008: 12)

Upon a closer look, it seems that the target group of the programme was not the whole population but those within or close to the labour market. Terms such as ‘continuing’ and ‘returning to’ working life were repeatedly used, and even though the programme noted that this was easier for those who had had a permanent job, it suggested no means of improving the general employment situation or of providing jobs for people with disabilities who did not have a job to return to.

The MAST programme pursued its aims by focusing on wellbeing at work and improving the care of depression in occupational health care, the unique Finnish system of providing free health care for people contracted to an employer, a system which in itself can be criticised for increasing socio-economic inequity (cf. e.g. Vuorenkoski 2008, 146–47). One of the most repeated suggestions of the MAST programme was to improve particularly the care of depression in the occupational health care.

The occupational health service is in a key position in the identification of depression, timely treatment, starting the rehabilitation and in evaluation of the ability to work of employed people. To support the preconditions for returning to work, it is important to strengthen the co-ordination role of the occupational health services [ … ]. After an absence from work caused by depression, the return to work should be carried out in cooperation between the workplace and the occupational health service. (MSAH 2008: 16, emphasis original)

The connection between mental health problems and other disadvantages such as unemployment was often mentioned in the MAST programme reports but no means were suggested to respond to the issue. Even if the higher risk of the unemployed suffering from economic and health problems was addressed, it was not considered the task of the current programme to intervene:

Mental health problems and deficiencies in the working ability of the unemployed are often the reasons for marginalization from the labour market. In the steering group it was stated that [in another organisation - AA&SO] there was a project for the health services of the long-term unemployed […], which already takes the matters forward.’ (MSAH 2011: 21)

Throughout the documents published within the MAST project a wealth of issues causing deliberate dualisation were suggested, such as emphasising the occupational health care system and ‘returning’ to work, or shifting elsewhere the responsibility to discuss the connection between unemployment and working ability. It therefore seems that the MAST programme consciously chose not to deal with the complex relationship between a disadvantaged social position, the low demand for labour, and mental health problems other than depression.

All in all, in contrast to the discussion of unemployment and the activation of people presented as ‘unwilling’ to work, the disability retirees who had been closer to working life were discussed as self-evidently willing to continue their careers. However, the discussion on the prevention of disability retirement ignored persons suffering from mental health problems other than depressive disorder. These individuals were perceived as ‘unable to work’ even if, as mentioned, their self-reported working ability had been determined to be good (Karisalmi et al. 2009). We found providing activation directed at persons suffering from mental health problems, but it focused only on those diagnosed with depression, and who were well educated, perceived easy to employ but expensive to provide pensions to. Moreover, there seemed to be a more or less deliberate silence about what could be done for the disadvantaged.

Our analysis shows that the activation measures practised in Finland around the turn of the millennium contain tendencies that contribute to ‘dualisation’ by favouring the groups whose proximity to the labour market was the closest. This seems to have been possible through labelling some citizens outside the labour market as being responsible for their situation, by characterising them as ‘unwilling’ or ‘unable’ to work. The favoured groups were characterised as both willing and able, but their working conditions were presented to need intensified activation measures. These measures have also been ‘dualistic’ by further marginalising the groups less proximate to the labour market and blatantly favouring individuals with a better connection to working life.

Comparing the two cases discussed above, we argue that when the problem was unemployment, the new activation measures were restrictive, and the measures were targeted at the most disadvantaged who were both urged to work by weakening their unemployment security and obliged to work without a salary. For both the long-term unemployed and those with mental health problems other than depression, the activation principle was discarded by characterising the target group as ‘unwilling’ or ‘unable’. For the favoured group, the activation measures were providing. These trends ended up contributing to the removal of those suffering from serious mental health problems as well as the most disadvantaged unemployed from the labour market.

Comparing our two cases, we argue that as opposed to the activation of the unemployed, within the context of disability the activation measures were targeted at the relatively fortunate whose labour was in greater demand. At the same time, the ones whose labour was not in demand were left to the basic-level disability pension only. We also found a tendency to avoid addressing the connection between receiving the basic-level disability pensions and a generally underprivileged position (cf. Karisalmi et al.2009).

It has been argued that extreme dualisation should not occur in the Nordic welfare states, and that dualisation indeed fundamentally contradicts their principles (Emmenegger et al.2012). Our study, however, shows that extensive but varying dualisation has been practised in Finland during the millennium shift period. We propose that this finding should be discussed in the light of the following viewpoints.

First, the tendency to dualise activation is congruent with some of the previous analyses of Nordic welfare states. Although these states are known for ‘decommodification’ (guaranteeing a socially acceptable standard of living even if persons occasionally choose not to do salaried work; Esping-Andersen 1990), the provision of social security was never independent of salaried work. Citizens have not been free from selling their labour, but have also not had to sell it at any cost (Kettunen 2010). This way, the aim of increasing labour participation can be seen as paralleling the Nordic tradition. However, the policies discussed above seem to have weakened the social equality typical of Nordic welfare societies and have reflected the Nordic pre-welfare-state axiom (Kettunen 2011).

Second, we propose to further investigate the connection between unemployment and mental health problems. Earlier studies have argued that the threshold for psychiatric diagnosing has been lowered, and arguably the diagnosis of depression may today be attached to statuses of mental health which previously have been seen as phases of normal life, not mental disorders (Horwitz 2002; Rose 2006; Vilhelmsson et al. 2011; Busfield 2012). As unemployment and mental health problems correlate, one might ask how do these phenomena interact: are those experiencing mental health problems at higher risk of unemployment? Moreover, how much does unemployment or the threat of it increase the likelihood of experiencing mental health problems (cf. Vulkan et al. 2015)?

At the beginning of this article we discussed earlier findings that have shown ‘activation’ further increasing the marginalisation of some populations. The analysis presented in the present article adds that ‘activation’ practised in Finland at the turn of the millennium seems to be combined with blaming people themselves for their difficulties and treating those outside of paid labour in an unequal and dualised manner. The practised measures seem to have increased the risk of marginalisation and poverty among unemployed and disability retirees who have either suffered from long-term unemployment or have had a short or no working history. The measures have therefore made the situation worse for some of the people they were originally supposed to help. Further, the dualising activation discussed in this article is incongruent with Nordic welfare state principles. Yet it seems that dualisation has been rather easy to justify by the use of suitable characterisations that have framed the problem in terms of disadvantaged individuals’ (un-)willingness or (dis-)ability to work.

We would like to thank Lotta Haikkola, Ilpo Helén, Åsa Lundqvist, Anna Metteri, Sue Scott, the CEACG-seminar, the NordWel-Helsinki-seminar and the anonymous referees for their helpful comments at different stages of the paper.

No potential conflict of interest was reported by the authors.

Anna Alanko is a Master of Social Sciences and a doctoral student in the University of Helsinki, Centre for Research on Addiction, Control and Governance (CEACG). Her main areas of research are mental health, mental health policy and the Nordic welfare systems. She has worked within the Nordic Centre of Excellence: The Nordic Welfare State – Historical Foundations and Future Challenges (NordWel).

Sami Outinen is a Doctor of Social Sciences and social science historian at the University of Helsinki. His main areas of research are social democracy, employment and economic policy, Nordic welfare systems and labour market development. He has worked within the Nordic Centre of Excellence: The Nordic Welfare State – Historical Foundations and Future Challenges (NordWel).

1

These measures stemmed from neoliberal and neoconservative agendas in the USA in the 1980s. They were adopted in Finland via the recommendations of the OECD and European Union (Keskitalo 2008).

2

The division between depression and other mental health problems is central to the way mental health is discussed in Finland, and to the argument presented in this paper. The essential difference is that whereas the symptoms of depression often do not include psychotic symptoms or intellectual disability, the most common diagnoses classified as ‘mental health reasons other than depression’ are schizophrenia and intellectual disability. Among those on disability retirement for mental health reasons, those with depression tend to have closer connections with working life than those with ‘mental health problems other than depression’.

3

BB are available to unemployed persons who would have been entitled to ERB if they had been members of an unemployment fund.

4

The Finnish national pension has included an additional ‘guarantee pension’ since 2011. The total monthly amount for these in 2015 was €766.85, compared to the basic-level unemployment benefits which averaged €703 the same year (pre-taxation figures) (SII 2016). The support leaves the recipients of both benefits clearly below the national poverty line, which in 2014 was €1190 per month after taxation (OSF 2016). The recipients are, however, usually entitled to family and housing benefits and may apply means-tested income support.

5

A reform in the mid-1990s removed the until then universalist NP from those entitled to a certain amount of EP. The change appeared to be a cost-cut exacted from the middle class; in practice, it was the opposite, as it enabled lower rises in the national pensions than in the employee pensions (GP 119/1995).

6

The policy is based on the monetarist assumption that increasing the supply of labour increases employment in the long run. It rejects the Keynesian idea of increasing workforce by increasing public expenditures during economic downturns.

7

Some of the unemployed were traditionally re-educated. However, in this case ‘training’ generally meant ‘workfare’, working without an employment contract. The participants were not paid a salary and could not enjoy other rights guaranteed to employees according to collective agreements and the law (see Julkunen 2001).

8

Kananen (2011) discusses the same activation reforms. However, he concentrates on the dynamics between income support and unemployment benefits.

9

According to official statistics, only 10,000–20,000 jobs were open at the time (Statistics Finland 2004: 385).

10

From 2008 onwards, Ministry of Employment and the Economy.

11

Moreover, the study only included EP recipients and hence the definition excluded those completely outside the labour market.

12

In Finnish, MASTO.

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