Rethinking the Welfare State: The prospects for ... - e-Library

Rethinking the selfare state 208
We envision that participation in some form of AMLP would be mandatory for all
individuals who have been receiving unemployment benefits for between 6 and 8 months.
At that time, every participant would be required to meet with a government employment
counselor who would assist in needs assessment. The counselor would also provide
information on different programs. There are both costs and benefits to a government
counseling service. Ultimately, however, we argue that there is a role for government
counseling because the unemployed are a vulnerable group and information asymmetries
are likely to compromise the quality of individual choices. The structurally unemployed,
in particular, may be less equipped to make informed decisions in the absence of
counseling, and in any case the plethora of options available to participants in a fully
contestable system are likely to prove bewildering even to the most discerning of
consumers—much like selecting a university or college. That said, a successful voucher
system must take care to ensure that the flaws of other labour training models do not
creep into the design. Government counselors must help participants understand their
choices, not make those choices for them. Any form of counseling which advocates
cookiecutter solutions or pushes participants towards favoured programs as a matter of
administrative convenience would undercut the competitive gains that we expect from a
voucher system.
The needs assessment would determine if the participant’s unemployment was
frictional or structural. If unemployment is deemed to be frictional, the participant would
be given a voucher representing the average cost of a JSA program, with a specified
period of time within which to use the voucher. Benefits sanction would result if the
voucher is not used in the allotted period of time. If the participant fails to obtain
employment, further assessments would be made. If unemployment is deemed to be
structural, the participant would require a more comprehensive program. Specific skillsshortages
would be assessed and the counselor would discuss the relevant options with
the individual. Varying voucher amounts would be available for those requiring on-thejob
skills training, short-term classroom training, or long-term remedial training. For
those who may require some combination of assistance measures, vouchers would be
made available on a progressive basis, preventing the waste of resources while ensuring
that services are still made available to those who require more intensive assistance.
On the supply-side, we argue that the market for JSA and training services should be
made contestable, allowing public, private for-profit, and private non-profit agencies to
compete for vouchers. The virtues of competition need not be restated. In order to
mitigate potential problems, it may be necessary for providers to be governmentaccredited
in order to be reimbursed through the voucher scheme. This would ensure a
minimum standard of quality for participants, enhancing their chances for employment.
Further, independent evaluations of agencies could be undertaken by an independent
government-sponsored agency on a regular basis, perhaps, as suggested earlier, on the
basis of mandatory disclosure of performance information. This would allow both
government and consumers to have the best possible information on the effectiveness and
efficiency of different providers. In order to promote equality and ensure that the positive
redistribution effects of these vouchers are realized, the state will also have to enact
regulations on the acceptance of clients and the payment structure for providers. In order
to ensure that these clients are being served effectively, as well as to ensure that public
resources are having the desired social effects, we argue that reimbursement should