Monday, 27 July 2015

Active labor market programs - employment gain or fiscal drain?

an article by Alessio JG Brown (IZA - Institute for the Study of Labor, Bonn, Germany) and Johannes Koettl (The World Bank, Washington DC, USA) published in IZA Journal of Labor Economics Volume 4 Number 1 (2015)


This paper provides a new perspective by classifying active labor market programs (ALMPs) depending on their objectives, relevance and cost-effectiveness during normal times, a crisis and recovery. We distinguish ALMPs providing incentives for retaining employment, incentives for creating employment, incentives for seeking and keeping a job, incentives for human capital enhancement and improved labor market matching. Reviewing evidence from the literature, we discuss especially indirect effects of various interventions and their cost-effectiveness. The paper concludes by providing a systematic overview of how, why, when and to what extent specific ALMPs are effective.

JEL codes: J08, J22, J23, J38, E24

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