Scandinavian Working Papers in Economics

Working Paper Series,
IFAU - Institute for Evaluation of Labour Market and Education Policy

No 2001:14: What works and for whom: a review of OECD countries' experiences with active labour market policies

John P. Martin () and David Grubb ()
Additional contact information
John P. Martin: IFAU - Office of Labour Market Policy Evaluation, Postal: Labour Market Policy Evaluation, P O Box 513, SE-751 20 Uppsala, Sweden
David Grubb: IFAU - Office of Labour Market Policy Evaluation, Postal: Labour Market Policy Evaluation, P O Box 513, SE-751 20 Uppsala, Sweden

Abstract: Although rather discouraging in general, the evaluation literature indicates some measures that have been successful. Job-search assistance, wage subsidies in the private sector, and labour market training do work for some groups, even if the impacts are not large. Also, the evaluation literature focuses on the impacts of one-off programs. Regular interventions, such as job-search monitoring, intensive interviews, and referrals to vacant jobs, have rarely been evaluated rigorously. Recently, introduced "activation" strategies in some OECD countries do appear to yield significant employment gains for participants. An important element in such strategies is experiments with alternative ways of improving the performance of the public employment service. Activation policies which combine high-quality assistance to find work with pressure on unemployed people to accept job offers can be effective with respect to unemployment duration, but more rapid returns to work sometimes comes at the cost of accepting lower re-employment earnings. Although active policies might give rise to displacement effects in the short run, this need not be case the over the medium run of a few years. Declines in structural employment rates achieved by many OECD countries in the 1990s give some reasons for optimism in this respect.

Keywords: job search; wage subsidies; labour market training

JEL-codes: J38; J64; J68

53 pages, September 25, 2001

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