The Ghent system is the name given to an arrangement in some countries whereby the main responsibility for welfare payments, especially unemployment benefits, is held by trade/labor unions, rather than a government agency.
The system is named after the city of Ghent, Belgium, where it was first implemented. It is the predominant form of unemployment benefit in Denmark, Finland, Iceland and Sweden. 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 union benefits depend on previous earnings.
- 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.
- Aleksi Kuusisto (2005), "Independent unemployment insurance fund 'undermining unions'" 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.
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