Ghent system

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A system of relief from unemployment involving government subsidies to unemployment funds run by trade unions. The name is derived from the Ghent municipal authority, which supplemented local trade union unemployment insurance schemes with public funds in 1901. The Ghent system spread widely in the early decades of the twentieth century but today only four countries rely upon it as the primary means of allocating unemployment relief: Belgium, Denmark, Finland, and Sweden. In these countries, unions are involved in administering unemployment insurance and also play a role in finding work for the unemployed. The effect is to boost union membership by providing incentives to join and retain membership, even when unemployed.

Subjects: Human Resource Management.

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