The Costs of Firm Exit and Labour Market Policies: New Evidence from Europe

2018 ◽  
Vol 19 (1) ◽  
Author(s):  
Dan Andrews ◽  
Irene Ferrari ◽  
Alessandro Saia

Abstract The churning of firms is an inherent process of industrialized economies, which entails a high rate of job destruction. Thus, a key question is: what are the policies that minimize the costs of worker displacement due to business closure? Accordingly, this paper exploits a retrospective panel of workers in 13 European countries over the period 1985–2008 to explore the factors which shape the reemployment prospects of workers displaced due to business closure. The results suggest that higher spending on active labour market policies increases the reemployment prospects of the unemployed workers displaced by business closure, both in terms of unemployment duration and in terms of stability of reemployment. On the contrary, there is evidence of a negative and sizable impact of passive labour market policies on unemployment duration.

Author(s):  
Manos Matsaganis

This chapter reviews the changes in labour market policies under conditions of harsh austerity and mass unemployment in Greece in 2010-2015. Three policy areas are covered: income support to the unemployed, active labour market policies, and employment protection legislation. We find that labour market policies in Greece have failed to rise to the challenge of harsh austerity and mass unemployment. A legacy of backwardness, neglect, and general lack of sophistication proved difficult if not impossible to overturn under the emergency conditions prevailing since 2010. Moreover, as regards the less controversial aspects of the structural reforms demanded by the country’s creditors under the bailout agreements (for instance, supporting job creation, upgrading the Public Employment Service, and improving the absorption, as well as the effectiveness of EU funding), the domestic actors’ preferred approach of passively adjusting to European funding opportunities, rather than genuinely puzzling for solutions, left no room for a more constructive engagement. The adverse effects of the resulting handicap are there for all to see.


2013 ◽  
Vol 23 (1) ◽  
pp. 3-20 ◽  
Author(s):  
Tim Vlandas

There are competing theoretical expectations and conflicting empirical results concerning the impact of partisanship on spending on active labour market policies (ALMPs). This paper argues that one should distinguish between different ALMPs. Employment incentives and rehabilitation programmes incentivize the unemployed to accept jobs. Direct job creation reduces the supply of labour by creating non-commercial jobs. Training schemes raise the human capital of the unemployed. Using regression analysis this paper shows that the positions of political parties towards these three types of ALMPs are different. Party preferences also depend on the welfare regime in which parties are located. In Scandinavia, left-wing parties support neither employment incentives nor direct job creation schemes. In continental and Liberal welfare regimes, left-wing parties oppose employment incentives and rehabilitation programmes to a lesser extent and they support direct job creation. There is no impact of partisanship on training. These results reconcile the previously contradictory findings concerning the impact of the Left on ALMPs.


2017 ◽  
Vol 47 (1) ◽  
pp. 77-97 ◽  
Author(s):  
FLAVIA FOSSATI

AbstractThe literature addressing attitudes about social policy and the welfare state has been telling us for decades that welfare interventions are supported by those individuals who benefit from a specific measure. The diffusion of ‘demanding’ active labour market policies (ALMPs), however, challenges this relationship. Using a novel dataset, I analyse which individual- and country-level factors explain public support for demanding ALMPs in five Western European countries. The results show that labour market risk and ideological orientation influence public attitudes towards these ALMPs. Thereby, unemployed individuals sympathising with the political right are more strongly opposed to demanding measures than employed individuals with the same political preferences. Moreover, aggregate support is found to be correlated with the country's ALMP legacy, varying from high levels in Germany and the UK to low levels in Denmark and France. The findings suggest that most ALMPs are in fact implemented despite the opposition of their beneficiaries.


2005 ◽  
Vol 21 (1) ◽  
Author(s):  
Jaap de Koning

Active labour market policies: more effective than is often assumed Active labour market policies: more effective than is often assumed Active labour market policy aims at improving the functioning of the labour market. By providing employers and jobseekers with labour market information and job mediation and applying specific reintegration measures to the unemployed, it tries to improve the matching between vacancies and jobseekers, to reduce the level of unemployment, to make job chances more equal and to stimulate employment. A review of the international literature shows that a majority of the available studies point to positive effects of active policies on job entry chances. However, there are strong differences between the different types of measures. For incentives for jobseekers (sanctions, bonuses, etc.), job counseling and placement subsidies the evidence for favourable (net) effects is clear. The available studies show mixed results for training. For subsidized (‘artificial’) labour most studies find no effects or negative effects. The results also differ between groups. Active policies seem to be more effective for women than for men, more effective for older persons than for the young and more effective for the disadvantaged than for those with a relative good profile in the labour market. The effects on job entry chances are probably small on average. The latter is also true for the macroeconomic effects. The effects might be bigger if one knew more about the effectiveness of the various measures for different groups. Then a more optimal use of measures might be possible. Evaluation is needed to get this information. However, currently hardly any evaluation research is done in the Netherlands.


Author(s):  
Vanessa Puig-Barrachina ◽  
Pol Giró ◽  
Lucía Artazcoz ◽  
Xavier Bartoll ◽  
Imma Cortés-Franch ◽  
...  

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