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Are active labour market policies effective in activating and integrating low-skilled individuals? An international comparison

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  • Escudero, Veronica

Abstract

This paper examines the effectiveness of active labour market policies (ALMP) in improving labour market outcomes, especially of low-skilled individuals. The empirical analysis consists of an aggregate impact approach based on a pooled cross country and time-series database for 31 advanced countries during the period 1985–2010. A novelty of the paper is that the analysis includes aspects of the delivery system to see how the performance of ALMP is affected by different implementation characteristics. Among the notable results, the paper finds that ALMP matters at the aggregate level. Training, employment incentives, supported employment and direct job creation measures show the most favourable results, both, in terms of reduced unemployment, but also in terms of increased employment and participation. Interestingly, start-up incentives are more effective in reducing unemployment than other ALMP policies. Moreover, the positive effects seem to be particularly beneficial for the low-skilled. In terms of implementation, the paper finds that the most favourable aspect is the allocation of resources to programme administration. Finally, a disruption of policy continuity is associated with negative effects for all labour market variables analysed.

Suggested Citation

  • Escudero, Veronica, 2014. "Are active labour market policies effective in activating and integrating low-skilled individuals? An international comparison," MPRA Paper 55319, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:55319
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    Cited by:

    1. Goulas, Eleftherios & Zervoyianni, Athina, 2018. "Active labour-market policies and output growth: Is there a causal relationship?," Economic Modelling, Elsevier, vol. 73(C), pages 1-14.
    2. Björn Nilsson, 2017. "The School-to-work transition in developing countries," Working Papers DT/2017/07, DIAL (Développement, Institutions et Mondialisation).
    3. repec:spr:epolit:v:35:y:2018:i:2:d:10.1007_s40888-018-0102-x is not listed on IDEAS
    4. Escudero, Verónica. & López Mourelo, Elva., 2015. "The Youth Guarantee programme in Europe features, implementation and challenges," ILO Working Papers 994888913402676, International Labour Organization.
    5. Escudero, Verónica. & Horne, Richard & Kühn, Stefan. & Milasi, Santo. & López Mourelo, Elva. & Pignatti, Clemente. & Silvander, Johanna. & Tobin, Steven., 2014. "An employment-oriented investment strategy for Europe," Studies on Growth with Equity, International Labour Office, Research Department, number 994870563402676, June.
    6. Floro Ernesto Caroleo & Elvira Ciociano & Sergio Destefanis, 2017. "The role of the education systems and the labour market institutions in enhancing youth employment: a cross-country analysis," Discussion Papers 1_2017, CRISEI, University of Naples "Parthenope", Italy.
    7. 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.
    8. repec:ilo:ilowps:488891 is not listed on IDEAS
    9. Escudero, Verónica & Horne, Richard & Kühn, Stefan & Milasi, Santo & Elva López, Mourelo & Pignatti, Clemente & Silvander, Johanna & Tobin, Steven, 2014. "An employment-oriented investment strategy for Europe," Studies on Growth with Equity 487056, International Labour Office, Research Department.

    More about this item

    Keywords

    unemployment; employment; participation rate; active labour market policies; implementation; public employment services; training; start-up incentives.;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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