Toespraak minister Koolmees bij CPB Lecture

Toespraak van minister Koolmees bij de CPB Lecture op 12 juni 2019 in Den Haag. De tekst is alleen in het Engels beschikbaar.

1. Introduction

Good afternoon!

Thank you for the invitation to speak here today, Laura van Geest. And thank you Magne Mogstad and Egbert Jongen, for your thorough analyses about inequality.

Unfortunately I could not witness your presentations, yet I did read them in advance. Inequality was the driving force of the greatest Dutch economist and Nobel Prize winner Jan Tinbergen

While he won that prize 50 years ago, his research questions are still very relevant: how does society work? And how can we improve its functioning?

His driving force — inequality — is also very topical, as the previous presentations have shown. At the same time, we must place this driving force in a historical context. Tinbergen's calling for life developed during his first job. That of a postman, a part-time student job.

Tinbergen delivered mail in neighbourhoods the average Leiden student would not venture into. There, he was confronted with dire poverty.

He was quite shocked about it, he wrote later. He devoted his entire professional life to diminishing income inequality.

2. Unequal growth of opportunities

Today, inequality is still with us. Yet this inequality is different from that which Tinbergen witnessed as a postman in Leiden. Today's inequality is more subtle, more complex, and could have greater consequences.

I often speak of ‘the inequality of opportunity’ in our society. Research by the Dutch Education Inspectorate, for example, has shown that children of equal ability can receive radically different school advice from their teacher in their final year at elementary school.  It’s because the teacher also unconsciously takes into account how much their parents earn, what language they speak, or what education they have received.

I find that shocking and unfair: The lives of these children have only just started and already some are lagging behind.

Even more concerning is that when these children grow older, they may continue to receive fewer opportunities. It reminds me of the game of Monopoly, which has a similar mechanism. If you miss the Coolsingel and Kalverstraat in the first rounds, or in Norwegian, I have been informed, Ullevål Hageby and Rådhus Plassen, then you already know: this is going to be a very long afternoon ...because even though you defend your Dorpstraat with all your might, you know you're going to lose.

Our future should never be such an all-or-nothing game, determined by the luck or bad luck of the dice you throw. Yet profit and loss in our society revolve less and less around the haves and have-nots, as in Tinbergen’s time, but around the cans and cannots: The forerunners, and those who can’t catch up.

A good example is the inequality regarding people with a migrant background. While differences are decreasing slightly, the reality still is that this group is lagging behind.

The statistics presented earlier today clearly show this. People of Turkish, Moroccan, Surinamese or Antillean descent earn a quarter less than those of Dutch origin. People with a migrant background experience two to three times more chance of unemployment and a 25 percent lower chance of finding a job within a year after graduating. And once they have a job, it is harder for them to get promotion.

Perhaps worst of all is that there is a lower intergenerational mobility among people with a migration background than among people of Dutch origin. Once they lose, their children will not win either.

The causes for this inequality are complex. A poor study choice is only part of the story. It also has to do with the lack of a good network. With discrimination and with prejudice. People with a Dutch name are about 60 percent more likely to be invited to an interview than people with an Arabic-sounding name.

In the end, such labour discrimination costs us money. But the immaterial damage is much greater. Labour market discrimination puts our society at a disadvantage.

3. Evidence-based policies

It’s clear we need to diminish this inequality of opportunity. The question arises: how?

Tinbergen stated that within every economic model, there should be at least as many instruments as objectives. The effects of those instruments must be thoroughly measured.

Today we call this evidence-based policy. I find this very important. Without this basis, policy soon becomes guesswork. And if policy doesn't work, you need to admit this and adjust it.

The Dutch integration process, for example. This process has had a two-faced character for too long. While we expected newcomers to be self-reliant and independent from day one, we made it impossible for them to learn the language quickly, or to do voluntary work.

In the end, it has resulted in a false start for newcomers. A monopoly game that can’t be won. That’s why I am implementing a new integration system, in which newcomers start learning the language as soon as they arrive, and by which they are able to start work a lot sooner. We need to make policies that work, not just when it comes to the initial integration process, but also to increase opportunities in the labour market.

Egbert already mentioned a number of possible solutions. Some of them are work in progress, for example concerning flexible work. With recently passed legislation, I want to reduce the cost and risk differences between permanent and flexible work.

But as Egbert pointed out, the vulnerable labour market position of people with a migrant background is a complex issue. Whilst there are promising solutions, we do not know whether they are effective.

When I started my work, I examined the knowledge that was available and I found out that there was almost no scientific insight into what really works for this group. I want to develop policies that work. That is why I am carrying out 8 pilot schemes to gain insight into the labour market position of people with a migrant background. The effectiveness of the pilots will be investigated thoroughly. A series of pilots involve tests with learning and working simultaneously.

For example, the Dutch network operator Liander offers 20 status holders both an education and a job as installation electrician. On their graduation day, I saw with my own eyes the immediate ‘triple win’ effects:  

  • The programme enables Liander to acquire new personnel in times of structural shortages.
  • Status holders get the chance to get a diploma and find a sustainable job.
  • And municipalities can guide people to structural work more easily.

Another pilot is aimed at removing prejudices from the job application process, for example, by implementing more neutral vacancy texts. The employers involved are super enthusiastic about this programme.  And I can see why. Because in the end, it supports employers in selecting the best person for the job.   

Of course we must be realistic about the effects of these pilots. ln the short run, they will not lead to major shifts. They will, however, provide insight into what really works. They help the government to use instruments effectively and efficiently. And they can help employers to gain insight into increasing the employment opportunities of people with a migrant background while acquiring new personnel in times of shortages.

In his presentation, Egbert made an interesting offer to combine forces between science and policy. I can be quite clear about this: offer accepted!

It would be great if we can conclude in 15 years' time that this cooperation has led to greater opportunities on the labour market for people with a migrant background.

In the meantime, I am looking forward to reading the publication that the CPB and SCP are preparing on ‘promising integration policy’. This publication will help build up the evidence base needed to shape effective policy.

4. Conclusion

Ladies and gentlemen,

The day before his retirement, Jan Tinbergen got the job of a lifetime. On his last working day at the Netherlands Economic Institute he was allowed to drive 1 of the oldest trams from Rotterdam to its final resting place ....

You could say: ‘the icing on the cake of a glorious career’. As a boy, Tinbergen secretly dreamed of a career as a tram driver. He knew all the trams from The Hague not only by heart, but also from head to toe: the year of construction, the type, the number of seats and even the location of the balcony.

Throughout his career, Tinbergen had the opportunity to develop himself. And he did just that.

The common thread of our own stories here, is also that of the opportunity. The fact that you and I are here is thanks to an accumulation of opportunities.

For me, that is the so-called ‘stapelaarsroute’. The educational stacking route: mavo-havo-vwo. I am very happy that I got that chance. But not everyone is granted that opportunity. Today’s presentations show the need for immediate action.

The current government is taking this action and will continue to do so.

Geen woorden maar daden. Not words but deeds, or as Jan Tinbergen would say: not words but numbers are the basis for a more equal future. A future that may already have been set in motion. Because there are also positive developments.

For example, children with a migrant background are doing just as well in primary school and sometimes even better than children of Dutch origin when it comes to maths and reading comprehension.

And in the higher levels of secondary education, the number of students with a migrant background is increasing faster than that of students of Dutch origin.

As an optimist, I believe these can be signs of a promising, more equal future. 

Thank you!