The Ghent system is the name given to an arrangement in some countries whereby the main responsibility for welfare payments, especially

unemployment benefits Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is the proportion of people above a specified age (usually 15) not being in paid employment or self-employment but currently available for work d ...

, is held by

trade union A trade union (British English) or labor union (American English), often simply referred to as a union, is an organization of workers whose purpose is to maintain or improve the conditions of their employment, such as attaining better wages ...

s rather than a

government agency A government agency or state agency, sometimes an appointed commission, is a permanent or semi-permanent organization in the machinery of government (bureaucracy) that is responsible for the oversight and administration of specific functions, s ...

. The system is named after the city of

Ghent Ghent ( ; ; historically known as ''Gaunt'' in English) is a City status in Belgium, city and a Municipalities of Belgium, municipality in the Flemish Region of Belgium. It is the capital and largest city of the Provinces of Belgium, province ...

Belgium Belgium, officially the Kingdom of Belgium, is a country in Northwestern Europe. Situated in a coastal lowland region known as the Low Countries, it is bordered by the Netherlands to the north, Germany to the east, Luxembourg to the southeas ...

, where it was first implemented. It is the predominant form of unemployment benefit in

Denmark Denmark is a Nordic countries, Nordic country in Northern Europe. It is the metropole and most populous constituent of the Kingdom of Denmark,, . also known as the Danish Realm, a constitutionally unitary state that includes the Autonomous a ...

Finland Finland, officially the Republic of Finland, is a Nordic country in Northern Europe. It borders Sweden to the northwest, Norway to the north, and Russia to the east, with the Gulf of Bothnia to the west and the Gulf of Finland to the south, ...

Iceland Iceland is a Nordic countries, Nordic island country between the Atlantic Ocean, North Atlantic and Arctic Oceans, on the Mid-Atlantic Ridge between North America and Europe. It is culturally and politically linked with Europe and is the regi ...

and

Sweden Sweden, formally the Kingdom of Sweden, is a Nordic countries, Nordic country located on the Scandinavian Peninsula in Northern Europe. It borders Norway to the west and north, and Finland to the east. At , Sweden is the largest Nordic count ...

. Belgium has a hybrid or "quasi-Ghent" system, in which the government also plays a significant role in distributing benefits. In all of the above countries, unemployment funds held by unions or labour federations are regulated and/or partly subsidised by the national government concerned. Because workers in many cases need to belong to a union to receive benefits, union membership is higher in countries with the Ghent system. Furthermore, the state benefit is a fixed sum, but the benefits from unemployment funds depend on previous earnings.

Ghent system in Sweden

From January 2007, the Swedish state decreased its financial support to the unemployment funds (most of them union-run, a few funds aimed for small entrepreneurs and one independent fund), with the result being that membership fees to unemployment funds had to be raised considerably, and union density declined from 77% in 2006 to 71% in 2008. In January 2014 the fund fees were restored to about the same level as before 2007. In 2015 Swedish union density was 69% and the density of union unemployment funds 73% (75% if the independent Alfa fund is added).Kjellberg, Anders and Ibsen, Christian Lyhne (2016
"Attacks on union organizing: Reversible and irreversible changes to the Ghent-systems in Sweden and Denmark"
in Trine Pernille Larsen and Anna Ilsøe (eds.)(2016) ''Den Danske Model set udefra (The Danish Model Inside Out) - komparative perspektiver på dansk arbejdsmarkedsregulering'', Copenhagen: Jurist- og Økonomforbundets Forlag, p. 287

Ghent system in Czechoslovakia

Ghent system in Czechoslovakia was adopted in 1925 mainly thanks to social democrats. It was largely opposed by the communist trade unions due to restrictions in work of communist red unions.

Notes

References

Petri Böckerman & Roope Uusitalo (2006). "Erosion of the Ghent System and Union Membership Decline: Lessons from Finland."
British Journal of Industrial Relations, 44:2, 283–303. * Kjellberg, Anders (2009
"The Swedish Ghent system and trade unions under pressure"
''Transfer'' no 3-4 2009 (pp. 481–504). ISSN 1024-2589 * Kjellberg, Anders (2006
"The Swedish unemployment insurance - will the Ghent system survive?"
''Transfer'' no 1 2006 (pp. 87–98). ISSN 1024-2589 * Kjellberg, Anders and Ibsen, Christian Lyhne (2016
"Attacks on union organizing: Reversible and irreversible changes to the Ghent-systems in Sweden and Denmark"
in Trine Pernille Larsen and Anna Ilsøe (eds.)(2016) ''Den Danske Model set udefra (The Danish Model Inside Out) - komparative perspektiver på dansk arbejdsmarkedsregulering'', Copenhagen: Jurist- og Økonomforbundets Forlag (pp. 279–302)

''European Industrial Relations Observatory On-Line'' (October 24, 2005)
Jens Lind (2007), "A Nordic saga? The Ghent system and trade unions"
''International Journal of Employment Studies'' (January 4, 2007)
Lyle Scruggs (2001), "The Ghent System and Union Membership in Europe, 1970-1996"
University of Connecticut Website. {{Portal bar, Organized Labour Ghent Trade unions Social programs Welfare economics Labour law