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Reviewing development of active labour market policies and the evaluation techniques

By Zubovic Jovan and Subic Jonel


Active labor market policies are commonly used tool to fight unemployment. In the early 1960s all Scandinavian countires have introduced several different measures to have an effect on their labor markets. In the late 1970s in most developed countries of OECD government expenditures on those policies reached the level of 1-1.5% of GDP. High levels of expenditures created a need to assess the impact of such measures and perform their cost-benefit analysis. Evaluations have in the previous 30 years been undertaken by using different methods: from experimental and quasi-experimental, to micro and macro analyses. Most precise evaluations are based on complex econometric methods. Moreover, during last decade there have been several meta-analyses to make cross-analysis of evaluations made worldwide in a long time-span. General conclusions of most papers are that ALMP do not have very high influence on the employability. The best results are experienced in services provided by local national employment services, as well in training programs, especially in on-job training. In the last few years there have appeared some indications that subsidized employment has high positive effects, however there is no general consensus on that matter. Despite large number of published papers on evaluations, there has been no research aimed on analyzing overall ALMP effects on the economy, and creation of a model which could ex-ante estimate future effects of ALMP.

Topics: J08 - Labor Economics Policies, H55 - Social Security and Public Pensions, E24 - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital, J21 - Labor Force and Employment, Size, and Structure
Year: 2011
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