Labour market policy programmes

In 2005 there were approximately 123,000 participants per month in the governmental repertoire of ALMP programmes (AMS 2006). This is 2.7% of the total Swedish labour force and approximately one third of the unemployed. 

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Insurance benefits are paid out in the form of daily allowances. There is a qualifying period of five days unemployment within a space of 12 months. The benefit is granted for 300 days at the longest. After that, it can be prolonged for another 300 days if no job has been found and the Employment Service confirms that no offers are available under the labour market policy programme. 

The central piece of labour market policy legislation is the Law on the Labour Market Policy Programme (here LAP) dating from the year 2000,12 supplemented by the extensive ordinance governing the programme.13 The LAP declares the... 

Organisation and legal protection of labour market policy programmes... 

Active Labour Market Programmes - Arbetsmarknadspolitiska program Arbetsmarknadsstyrelsen - National Labour Market Board Forordning om arbetsmarknadspolitiska program - Ordinance on Labour Market Policy Programmes... 

Given displacement, substitution, deadweight, wage and fiscal effects, the macro-economic effectiveness and efficiency of active labour market policy programmes as well as the sustainability of effects is less clear. In particular, some studies point at the fact that activating interventions based on the threat potential and demanding principle may help move benefit recipients to low-skill, low-pay and instable jobs so that they ran the risk of continued partial reliance or repeated return to benefits. 

Although basic income support for needy jobseekers is foremost a genuine social policy programme to avoid poverty, it has a strong focus on the labour market. With Hartz IV the interface of social and labour market policy has been redefined and the traditional divide between both policy areas eroded. It focuses on need (not on unemployment as such) and on interventions to reduce need - with attempts at labour market integration featuring prominently as a promising way to end up benefit dependency. 

Hence, municipal activation requirements started a new form of active measures in a Swedish labour market policy perspective. This trend seems to be maintained since the new Government s proposals entail, in general, increased individual responsibilities and obligations in order to combat unemployment. The new Job and Development Guarantee, which was put into practice very recently, is a clear example of this form of activation requirement policy. This programme... 

Wells W (2001) From restart to the new deal in the United Kingdom. In Labour Market Policies and the Public Employment Service. OECD Proceedings, Paris White M (2004) Effective job search practice in the UK s mandatory welfare-to-work programme for youth. PSI Research Discussion Paper 17. Policy Studies Institute, London White M, Lakey J (1992) The Restart Effect. Policy Studies Institute, London White M, Riley R (2002) Findings from the macro evaluation of the new deal for young people. Research Report No. 168. DWP, London Wright S (2003) The street level implementation of unemployment policy. In Millar J (ed.) Understanding Social Security Issues for policy and practice. The Policy Press, Bristol... 

Finally, the effects of activation pohcies on unemployment should be seen relative to the resources spent on administration and programme activities. These resources have to be financed via taxes which, in turn, can result in distorting effects on the labour market. Hence, a reduction in unemployment - open and total - may be achieved at a too high cost. The country studies show that the use of compulsory elements in unemployment insurance and social policies implies that active labour market policies are used much more intensively and that additional resources have to be dedicated to programme activities. 

Regarding the cost implications, activation policies are costly both in terms of administration and programme costs. Country evidence does not show major cuts in public expenditure if all benefit schemes, active labour market policies, administration expenses and additional tax measures are taken into account. Comparative data, however, show that resources spent on active and passive labour market policies in OECD countries is especially high in Denmark, the Netherlands and Germany (Fig. 28). 

In Denmark, activation of unemployed within the scope of labour market policy is the overall topic for a multitude of legal requirements and extra-legal activities. However, it is a central element of Danish labour market policy that the term activation has its own legal quality insofar as the unemployed is both entitled to activation but also has the duty to participate in activation programmes after a certain period of unemployment. Activation is not linked with an entitlement to a specific measure but at least to an activity within a bundle of measures. Thus, in this sense activation is a legal category. 

Katarina H. Thoren is a University Adjunct at the School of Health Sciences and Social Work Vaxjo University in Sweden. She is also a PhD Candidate in social work at the School of Social Service Administration, University of Chicago. Her main research interest includes comparative welfare state policy, activation and labour market policy, social assistance policy and programmes and the implementation and organisational practices of social policy. She is a member of the RAPSE (Research Group on Activation Policy and Social Exclusion) at Vaxjo University. 

If the overall labour market conditions seem rather promising, the lack of a tradition in activation may also mean that the adoption of a truly activation-oriented policy for non-working people will take time before it is adopted and can deploy its impact. This may be one key reason why, in spite of the overall favourable conditions, the performance of those activation polices that have so far been evaluated is at best mixed. Our hypothesis is that activation has been introduced half-heartedly so far, often more in response to the political need to do something about unemployment rather than with a clear employment maximisation objective. This is probably more the case in activation measures developed within the social assistance system or, in those cantons where such programmes exist, in unemployment assistance programmes (see Sect. 4.3.2 and Bonoli and Bertozzi 2007). 

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