The Politics of Sanctioning the Unemployed

Unemployment benefit claimants who become unemployed voluntarily, refuse offers of employment, or fail to fulfill their job-search obligations risk being sanctioned, meaning they may lose parts or all of their benefit for at least some time. Over the last three decades, many advanced democracies have reformed these sanctioning rules, often introducing harsher penalties. This paper examines this dynamic change in the strictness of these rules. I argue that stricter sanctions are introduced in response to voter demands for cost containment during periods of increasing unemployment. Rising unemployment increases demands for social protection, but at the same time raises concerns about the financial sustainability of the existing benefit schemes. Stricter sanctions, I argue, are introduced as a way to justify increased spending on the unemployed during times in which revenue bases are shrinking. They are a signal to voters that, while the ‘honest and deserving’ unemployed will continue to receive support, none of the scarce funds will be spent on the `undeserving’. I use a mixed-methods design to show empirical support for my argument. The quantitative part consists of a regression analysis using a novel comparative time-series dataset on the strictness of unemployment benefit sanctions in 21 OECD countries between 1980 and 2012. The qualitative part consists of an in-depth case study of the politics of sanction reforms in Australia between 1974 and 2012. This paper complements the existing literature on social and labor market policy responsiveness by showing that public opinion and subsequently public policy respond in more than one way to increasing needs for social protection, and increasing protection and social spending is but one of them.