Activation Policies for the Poor in OIC Member States
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1. Conceptual Framework and Methodology
This section sets out the conceptual and policy framework for the report, presenting descriptions of
the concepts of activation, definitions of the parameters of activation policies, and an illustration of
the links between employment, social and poverty reduction policies. We conclude this section by
detailing the methodology and framework used for the study, based on the definitions provided and
the links between policies.
1.1 Overview of activation
There has been a global development of SSN systems in the last century. The primary motivation for
these systems is to provide income protection to citizens to reduce the impact of social risks, such as
unemployment, employment injury, disability, sickness and maternity, on individual and household
income. The presence of SSN systems must be considered because it is these systems which first led
to the emergence of activation in high income countries such as the UK, US and countries in Northern
Europe.
A number of these countries suffered economic shocks and policy errors in the 1970s and 1980s
leading to increased youth and long term unemployment. This, in turn, led to high levels of welfare
expenditure. To address these issues, various responses were introduced, broadly grouped together
as ‘activation measures’. One of the key elements of these measures was ‘Active Labour Market
Programmes’ (ALMPs). By the late 1980s and 1990s there were marked differences in how well high
income countries were dealing with high levels of unemployment and increased benefit caseloads –
and the extent and nature of activation measures is thought to help explain these differences.
Studies carried out at the time found that high levels of unemployment, and persistent long-term
unemployment, were more entrenched in countries where lengthy periods of unemployment benefit
entitlement were combined with particular policy decisions and institutional trends. In several
countries this included:
 The design and separate delivery of employment services and unemployment benefits
 The weak definition and implementation of benefit conditionality (i.e. the criteria for which an
individuals could receive a benefit)
 Reforms that enabled and encouraged older workers in particular to be economically inactive
and/or to take early retirement
By contrast, unemployment levels were either contained or more rapidly reduced in countries with
activated benefit systems, i.e. where people were supported to be active and benefits were only paid
to those actively seeking employment.
Since these studies have taken place, countries with established social safety net systems have been
encouraged (by institutions such as the ILO, OECD and the World Bank) to implement activation
reforms for the unemployed and to extend activation policies to employable working age people in
receipt of disability and other minimum income benefits. Increasing labour market participation for
working age people is regarded as an effective way to reduce poverty and social exclusion, whilst
containing the costs of social protection systems. Through enhancing the employability of
unemployed people and other inactive people, activation polices are intended to improve labour
supply and will, where relevant, help meet the challenge of ageing populations.
Activation reforms are particularly important in the wake of the latest global financial crisis when
demands on social safety net systems have increased at the very time when their financing becomes
more difficult. In most countries directly impacted by the financial crisis, the first priority was to
stabilise the economy and to mitigate the impacts of economic contraction on those who had lost, or
were at risk of losing, their jobs.