Enhancing the Effectiveness of Active Labour Market Policies: - - PowerPoint PPT Presentation

▶

Feb 25, 2023 35 likes •166 views

Enhancing the Effectiveness of Active Labour Market Policies: Evidence from the Programme Evaluation in OECD Countries by Robert G. Fay Economic Policy Castellanza, 6 May 2008 Simone Biaggi, Andrea Colombo The unemployment is one of the main

SLIDE 1

Enhancing the Effectiveness of Active Labour Market Policies: Evidence from the Programme Evaluation in OECD Countries by Robert G. Fay

Economic Policy Castellanza, 6 May 2008 Simone Biaggi, Andrea Colombo

SLIDE 2

Page 2 Economic Policy – 6 May 2008

The unemployment is one of the main threat for the The unemployment is one of the main threat for the The unemployment is one of the main threat for the The unemployment is one of the main threat for the economic growth economic growth economic growth economic growth

One of the main problem of the industrialized countries is the unemployment, that cause:

Social costs Unemployment costs (i.e. benefits) Loss of efficiency Individual unsatisfaction

Most of the Organization for Co-operation and Development Countries (OECD) are increasing the role of the Active Labour Market Policies (ALMPs), such as:

Job creation scheme in the public sector Wage subsidies in the private sector Training programmes Job-search assistance

SLIDE 3

Page 3 Economic Policy – 6 May 2008

OECD combats against high and persistent unemployment and spend ca. 1% of GDP Tools:

reforms in SUPPLY SIDE (labour and product markets, taxation policy, industrial

policy, education and training, macroeconomic policies)

DEMAND SIDE (low inflation low wages more hiring)

Important to consider

Short and long term effects Deadweight costs Intervention time Social effects

Net Impact = gross impact – deadweight loss – substitution effects – displacement effects

SLIDE 4

Page 4 Economic Policy – 6 May 2008

The evaluation problems

Individual effects?
Net social gains?
TR > TC?

Ideal evaluation

steps

Interviews Post-programme data Random assignment experience Quasi-experiments Evaluation

methods

SLIDE 5

Page 5 Economic Policy – 6 May 2008

Job-search assistence

Effects of Job-search Assistance

Appears to be effective for most groups of unemployed people Lowest intervention cost with the largest relative payoffs Effective by itself or in conjunction with other tools Uncertainty of long term effects Long time to see effects

SLIDE 6

Page 6 Economic Policy – 6 May 2008

Formal classroom training

Effects of Formal Classroom Training

Effective for well targeted individual groups Long time to see effects

SLIDE 7

Page 7 Economic Policy – 6 May 2008

Subsidies to emplyoment

Effects of Subsidies To Employment

Decrease long term unemployment Helps women re-entrants in job market Successful when combined with training and job-search assistance Careful and continues control must be maintained Possible high deadweight losses and substitution effects (less with well targeted groups)

SLIDE 8

Page 8 Economic Policy – 6 May 2008

Aid to the unemployed to start an enterprise

Effects of Aid To start A new enterprise

Works for a small target of individuals Creating a new company, a big number of new employees is created Possible high deadweight loss and displacement effects Effects hard to evaluate

SLIDE 9

Page 9 Economic Policy – 6 May 2008

Public sector job creation

Effects of Public Sector Job creation

Last resource for people with big barriers to enter in labour market Political consent Often ineffective

SLIDE 10

Page 10 Economic Policy – 6 May 2008

Problems linked to evaluation methods

Choice depends on programme objectives, evaluation objectives, costs, timeliness of results Ethical considerations must be kept into consideration Statistic distortions (i.e. representative group selection) Negative payoffs are caused by

Evaluation problems (too short, wrong statistic groups) Programme problems (the course does not improve participant careers)

SLIDE 11

Page 11 Economic Policy – 6 May 2008

Different solutions for different groups

Youths are the most difficult to be helped Women receive the greatest benefits from class training, wage subsidies and job-search There are methods to effect positively many different individual groups politicians must take decisions implying trade-offs It is impossible to eliminate unemployment, because ALMPs and government resources are limited

SLIDE 12

Page 12 Economic Policy – 6 May 2008

Conclusion

Job-search assistance are effective for most groups Programmes appear effective for women but not for youths Gains are modest Careful targeting is important Programmes may work better over time ALMPs should be consider together Difficult to generalise results

SLIDE 13

Page 13 Economic Policy – 6 May 2008