Precarious workers' choices about unemployment insurance membership after the Ghent system reform : The Finnish experience

Abstract

The literature on the Ghent system has focused on the link between voluntary unemployment insurance and union membership in terms of industrial relations. Less attention has been paid to unemployment benefits and employees' decision‐making concerning unemployment insurance, even though the core function of the Ghent system is to provide unemployment insurance. This paper examines both of the options that precarious workers (i.e., part‐timers, temporary employees, and low‐skilled service employees) choose regarding unemployment insurance membership and the change in union density after the Ghent system reform in Finland. First, the results show that the growth of the independent unemployment insurance fund was the main reason for declining union density in the 2000s and early 2010s. Second, in terms of precarious workers, we find that the emergence of the independent fund has affected their choices about unemployment insurance membership and that their choices depend on the type of precarious employment they have. Moreover, part‐timers and temporary employees younger than 35 years of age are much less likely to enroll in unemployment insurance than older employees who have the same types of employment contracts.