What Can Active Labour Market Policies Do

9/11/2011

Evidence Offers Clear Messages on Effective Help for the Unemployed The ESRI has published a comprehensive study of evidence on how best to boost the job prospects of the unemployed. The study concludes that assistance in searching for jobs, giving training in job search techniques, retraining workers for sectors where skills are in demand, and targeted subsidies that support work experience in the private sector, are the most effective ways of helping unemployed people get back to work. ESRI researchers examined evidence from more than fifty international research projects on “active labour market policies”, in which unemployment benefit claimants are assessed when they sign on and are required to engage in programmes designed to help them back into work. The evidence shows that some types of programmes are more likely to lead to sustained employment than others. The researchers found that:

• Job search assistance increases the chances that unemployed people find work, and this tends to be more effective when combined with monitoring of job search activity and sanctions for non-compliance.
• Training programmes are also effective, provided they are directly linked to skill demands. The development of sector skills councils to provide a dynamic framework within which the skill needs of employers are communicated on an ongoing basis to training providers and policy makers may prove useful in this respect.
• Schemes that subsidise employers to take on workers can also be effective, but must be carefully designed and implemented in order to avoid subsidising jobs that would have been created anyway.
• Public sector job creation is generally unsuccessful in boosting the job prospects of unemployed individuals.

The paper argues that “effective job search assistance and monitoring should be the corner-stone of all services to unemployed people and serve as the gateway to employment and training opportunities, irrespective of prevailing labour market conditions. Even during a recession activation is essential to maintain connection with the labour market.” The authors note that “Ireland invests substantial resources in active labour market programmes to help unemployed people get back to work. In the context of mass unemployment and the fiscal crisis of the state, it is essential that this investment achieves the best value for money: we need to identify and allocate spending to those active labour market programmes that do most to enhance the employment prospects of those who participate in them.”

Note to Editors: 1."What Can Active Labour Market Policies Do", by Dr Elish Kelly, Dr Seamus McGuinness and Dr Philip O’Connell (ESRI), is the first paper in a special series of ESRI studies that aim to survey available evidence to address issues related to Ireland’s ongoing economic crisis. It will be published online on the ESRI website (www.esri.ie) at 00:01 a.m. Wednesday 9 November. The embargo is until 00:01am Wednesday 9 November. 2. A total of 12 studies are being undertaken as part of this “Renewal” project, which is supported by FBD Trust. 3. The paper will be presented at a conference on improving productivity and growth, to be held at the ESRI on Wednesday 9 November, which will also feature papers on what can be done to boost innovation in firms and how to target public investment in infrastructure to get the best returns. 

Link to Publication details