Effective active labour market policies can help smooth transitions in the labour market. While all measures have merits, evaluations have shown only early retirement has clear shortcomings. The impacts of active labour market policies are often seen in the medium term, not immediately, and they interact with other labour market institutions like unemployment benefits. Ensuring proper delivery, evaluation, and monitoring of active labour market policies is essential to increase their effectiveness across European Union member states. Different types of active labour market policy instruments are more or less effective depending on the target group, with labour market services and vocational training showing more positive outcomes compared to employment incentives and startup incentives.

1. Effective active labour
market policies
EESC conference "Effective tools of active labour market policies
during the crisis
Brussels, 5th March 2013
Lars Michael Engsted
Policy Coordinator
DG EMPL

2. Evidence and reasoning

3. ALMP and long term unemployment
Source: Eurostat, LMP

4. Effects of active labour market policies
Source: For persistence rate: DG EMPL calculations based on Eurostat, Eu-LFS. Expenditures on ALMPs: Eurostat LMP
database. Note: spending on active labour market policies includes categories 1-7 in the LMP database

5. Effectiveness of ALMP

6. Effectiveness of ALMP (1)
• ALMP help smooth transitions in the labour market
• All measures have merits but also shortcoming, only early
retirement shows shortcomings
• Impacts in the medium term vs immediately after
implementation;
• ALMP interact with other LM institutions, notably passive
labour market policies;

7. Effectiveness of ALMP (2)
• Delivery of ALMPs continues to be problematic in some
MS;
• Evaluation and monitoring is essential to increase AMLP
effectiveness;
• The structure of ALMP spending per category varies over
Member States.

8. Staff capacities
to face increasing case loads
Number of PES reporting increased/decreased in
staff 2008-2012
Source: European Job mobility laboratory: PES Crisis response questionnaire, 2012

9. Effective active labour
market tools

10. ALMP expenditures by type of action
2010, in % GDP
Source. Eurostat. LMP database

11. Main type of ALMP instruments (1)
 Labour market services
 Most cost-effective ALMP measures
 Better outcomes than training programmes
 Training
 Positive effects for specific groups
 Vocational rather than general training
 More sustainable impact in the medium run
 Employment incentives
 Large deadweight losses
 Non-subsidized workers replaced by subsidized workers

12. Main type of ALMP instruments (2)
 Supported employment
 Less positive impact on post-programme outcomes
 Limited outflow into regular jobs
 Start-up incentives
 Effective if targeted at selective groups
 Deadweight loss
 Youth measures
 Less successful
 Design less appropriate

13. Thematic review seminar on long term
unemployment (autumn 2012)
 The prospects of labour demand expansion through
wage subsidies are poor
 Smaller scale subsidy is effective if targeted and
combined with relevant work experience
 Work experience and training measures contribute to
improving skills match and maintaining employability
 Prevention and early intervention are important and
should be combined with an individualised approach

14. Peer review on integrating young people into
the labour market (autumn 2012)
 Training opportunities should combine vocational
education with practical work experience
 Strong involvement of employers in the governance and
delivery of apprenticeship training is a key prerequisite
 Early individualised support can assist disadvantaged
young people to access training opportunities
 Counsellors and mentors should have access to
significant networks of stakeholders

15. Thank you for your
attention