Active labour market policies
Active labour market policies (ALMPs) are government programmes that intervene in the labour market to help the unemployed find work. Many of these programmes grew out of earlier public works projects designed to combat widespread unemployment in the developed world during the interwar period. Today, academic analysis of ALMPs is associated with economists such as Lars Calmfors and Richard Layard. Demand side policies are policies used by the government to control the level of Aggregate demand (AD)
There are three main categories of ALMP:
- Public employment services, such as job centres and labour exchanges, help the unemployed improve their job search effort by disseminating information on vacancies and by providing assistance with interview skills and writing a curriculum vitae.
- Training schemes, such as classes and apprenticeships, help the unemployed improve their vocational skills and hence increase their employability.
- Employment subsidies, either in the public or private sector, directly create jobs for the unemployed. These are typically short-term measures which are designed to allow the unemployed to build up work experience and prevent skill atrophy.
Active labour market policies are prominent in the economic policy of the Scandinavian countries, although over the 1990s they grew in popularity across Europe. Notable examples include the New Deal in the UK and many welfare-to-work programmes in the US.
A number of authors (Boix 1998; Esping Andersen, 1990; Huo, Nelson et al. 2008) have argued that countries with stronger left wing political parties and trade unions have more developed ALMP. On the other hand, Social democratic parties may not promote ALMP if their constituents are well protected workers and hence face little risk of being unemployed (Rueda, 2007). More recently, the notion that different types of ALMP have similar political determinants has been contested (Bonoli, 2010; Vlandas, 2011, 2013).
- Boix, C. Political parties, growth and equality : conservative and social democratic economic strategies in the world economy, Cambridge, Cambridge University Press, 1998
- Bonoli, G.The political economy of active labour market policy, Politics & Society 38(4): 435-457, 2010
- Calmfors, L. Active labour market policy and unemployment: a framework for the analysis of crucial design features, OECD Economic Studies, 1994
- Esping-Andersen, G. The three worlds of welfare capitalism, Cambridge, Polity, 1990
- Huo, J., M. Nelson, and J. Stephens, Decommodification and activation in social democratic policy: resolving the paradox, Journal of European Social policy 18: 5-20, 2008
- Layard, R., S. Nickell and R. Jackman, Unemployment: macroeconomic performance and the labour market, Oxford University Press, 1991
- Robinson, P. Active labour-market policies: a case of evidence-based policy-making?, Oxford Review of Economic Policy, Volume 16, No. 1, 2000
- Rueda, D. Social democracy inside out. Partisanship and labour market policy in industrialised democracies, Oxford University Press, 2007
- Vlandas, T. The dependent variable problem in quantitative studies of Active Labour Market Programmes: Uncovering hidden dynamics?, Recwowe Working paper, REC-WP 03/2011, 2011. Can be accessed at the Recwowe Publication centre
- Vlandas, T. Mixing apples with oranges? Partisanship and active labour market policies in Europe , Journal of European Social Policy February 23(1): 3-20, 2013