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Activation and Active Labour Market Policies in OECD Countries: Stylized Facts and Evidence on their Effectiveness

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  • Martin, John P.

    () (University College Dublin)

Abstract

Activation policies aimed at getting working-age people off benefits and into work have become a buzzword in labour market policies. Yet they are defined and implemented differently across OECD countries and their success rates vary too. The Great Recession has posed a severe stress test for these policies with some commentators arguing that they are at best "fair weather" policies. This paper sheds light on these issues mainly via the lens of recent OECD research. It presents the stylized facts on how OECD countries have responded to the Great Recession in terms of ramping up their spending on active labour market policies (ALMPs), a key component in any activation strategy. It then reviews the macroeconomic evidence on the impact of ALMPs on employment and unemployment rates. This is followed by a review of the key lessons from recent OECD country reviews of activation policies. It concludes with a discussion of crucial unanswered questions about activation.

Suggested Citation

  • Martin, John P., 2014. "Activation and Active Labour Market Policies in OECD Countries: Stylized Facts and Evidence on their Effectiveness," IZA Policy Papers 84, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izapps:pp84
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    References listed on IDEAS

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    Cited by:

    1. Spermann, Alexander, 2014. "Zehn Jahre Hartz IV – Was hilft Langzeitarbeitslosen wirklich?," IZA Standpunkte 76, Institute for the Study of Labor (IZA).
    2. Werner Eichhorst, 2017. "Labor Market Institutions and the Future of Work: Good Jobs for All?," Working Papers id:11689, eSocialSciences.
    3. Alessio Brown & Johannes Koettl, 2015. "Active labor market programs - employment gain or fiscal drain?," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-36, December.
    4. repec:wfo:monber:y:2017:i:6 is not listed on IDEAS
    5. Eleftherios Goulas & Athina Zervoyianni, 2017. "Active labour-market policies and output growth - is there a causal relationship?," Working Paper series 17-20, Rimini Centre for Economic Analysis.
    6. Dosi, Giovanni & Pereira, Marcelo C. & Roventini, Andrea & Virgillito, Maria Enrica, 2018. "What if supply-side policies are not enough? The perverse interaction of flexibility and austerity," GLO Discussion Paper Series 168, Global Labor Organization (GLO).
    7. Kilhoffer, Zachary & Beblavý, Miroslav & Lenaerts, Karolien, 2018. "Blame it on my youth! Policy recommendations for re-evaluating and reducing youth unemployment," CEPS Papers 13342, Centre for European Policy Studies.
    8. Alexander Spermann, 2015. "How to fight long-term unemployment: lessons from Germany," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-15, December.
    9. Eichhorst, Werner & Konle-Seidl, Regina, 2016. "Evaluating Labour Market Policy," IZA Discussion Papers 9966, Institute for the Study of Labor (IZA).
    10. repec:wfo:wstudy:59029 is not listed on IDEAS
    11. Verónica Escudero, 2018. "Are active labour market policies effective in activating and integrating low-skilled individuals? An international comparison," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-26, December.
    12. repec:sav:ebooks:003 is not listed on IDEAS
    13. Torben Andersen, 2015. "The Danish Flexicurity Labour Market During the Great Recession," De Economist, Springer, vol. 163(4), pages 473-490, December.
    14. MORITA Tadashi & SAWADA Yukiko & YAMAMOTO Kazuhiro, 2016. "Subsidy Competition, Imperfect Labor Market, and Endogenous Entry of Firms," Discussion papers 16096, Research Institute of Economy, Trade and Industry (RIETI).
    15. Giovanni Dosi & Marcelo C. Pereira & Andrea Roventini & Maria Enrica Virgillito, 2018. "What if supply-side policies are not enough ? The perverse interaction of flexibility and austerity," Sciences Po publications 2018-04, Sciences Po.
    16. repec:wfo:wstudy:58885 is not listed on IDEAS
    17. repec:spr:chinre:v:10:y:2017:i:4:d:10.1007_s12187-016-9436-5 is not listed on IDEAS
    18. Fitzenberger, Bernd & Furdas, Marina & Sajons, Christoph, 2016. "End-of-year spending and the long-run employment effects of training programs for the unemployed," ZEW Discussion Papers 16-084, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    19. Christopher J. O'Leary & Burt S. Barnow, 2016. "Lessons from the American Federal-State unemployment insurance system for a European unemployment benefits system," Upjohn Working Papers and Journal Articles 16-264, W.E. Upjohn Institute for Employment Research.
    20. Van Belle, Eva & Caers, Ralf & De Couck, Marijke & Di Stasio, Valentina & Baert, Stijn, 2018. "The Signal of Applying for a Job Under a Vacancy Referral Scheme," GLO Discussion Paper Series 173, Global Labor Organization (GLO).
    21. Tadashi Morita & Yukiko Sawada & Kazuhiro Yamamoto, 2017. "Subsidy competition, imperfect labor markets, and the endogenous entry of firms," Discussion Papers in Economics and Business 17-07, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
    22. repec:wfo:monber:y:2017:i:6:p:493-505 is not listed on IDEAS
    23. Thor Berger & Carl Benedikt Frey, 2016. "Structural Transformation in the OECD: Digitalisation, Deindustrialisation and the Future of Work," OECD Social, Employment and Migration Working Papers 193, OECD Publishing.
    24. Roberto Iacono, 2017. "Minimum income schemes in Europe: is there a trade-off with activation policies?," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 6(1), pages 1-15, December.
    25. Lindley, Joanne & Mcintosh, Steven & Roberts, Jennifer & Czoski Murray, Carolyn & Edlin, Richard, 2015. "Policy evaluation via a statistical control: A non-parametric evaluation of the ‘Want2Work’ active labour market policy," Economic Modelling, Elsevier, vol. 51(C), pages 635-645.

    More about this item

    Keywords

    activation; active labour market policies; Great Recession; unemployment insurance; benefit conditionality;

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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