What Works, Who Works? The Employment and Earnings Effects of Active Labour Market Programmes among Young People in Ireland

The international literature on active labour market programmes has generated inconsistent and confusing, but generally pessimistic, conclusions regarding their impact on the employment prospects of participants. This paper argues that much of this confusion is due to a general lack of attention to qualitative differences between programmes. The paper develops a typology of active labour market programmes, differentiating between training and employment measures on the basis of their orientation to the labour market and argues that programmes with a strong orientation to the market are more likely to improve the job prospects of participants than those characterised by weak market linkages. That hypothesis is tested using the results of a survey of young participants in labour market programmes in Ireland. The analysis shows that programmes with strong linkages to the labour market both enhance the employment prospects of their participants and increase their earnings, even when we take account of relevant individual characteristics such as education and previous labour market experience.