Do Disadvantaged Young Adults Benefit Less from Social Investment? Studying Matthew Effects in Activation Measures

In Germany, social investment can be crucial for disadvantaged young adults, as intergenerational mobility is low and credentials are decisive for employment. However, the literature on policy implementation calls attention to ‘Matthew effects’, by which the most disadvantaged often have the least access to social investment. We contribute to ongoing research on Matthew effects by examining whether the worst-off among young German welfare recipients are assigned to active labour market policy measures that are more advantageous or less advantageous. Findings for a register sample of 20–22 year olds in 2014 support hypotheses that those with the lowest education and employment experience participate less often in the most advantageous measures; particularly in firm-based upskilling and employment assistance, and more often in measures that proved to be not as beneficial, such as workfare programmes. On a positive note, welfare experience during adolescence as an indicator of low socio-economic status in the family of origin does not additionally affect access to social investment policy measures.

Do social investment policies reduce income inequality? An analysis of industrial countries

Scholars and policymakers who call for social investment (SI) policies hope that SI policies reduce income inequality and poverty, among other policy goals. Meanwhile, some others point out potentially less pro-poor effects of SI policies. There are relatively few cross-national studies that empirically examine the distributional effects of SI policies. The current study seeks to fill the gap by investigating the effects of SI policies on income inequality in OECD countries. The empirical analysis finds mixed results. Parental leave benefits reduce market income inequality, but other family support policies do not lessen inequality, and family allowances and paid leave (the length of generous leave) even increase it. The effects of some family policies are partly context-specific. In contexts where there are a large number of single-mother households, parental leave benefits reduce market income inequality. There is no stable evidence that education and active labour market policy (ALMP) reduce market income inequality. Education and ALMP, however, reduce disposable income inequality (even after controlling for left governments and Nordic countries). The article suggests that in countries with high education and/or ALMP spending, the skills of workers towards the lower end of the income distribution may be relatively high (even though their pre-tax and transfer income may be low), and it may make their income salvageable with redistributive policies. In this sense, SI policies and conventional redistributive policies may be complementary in reducing disposable income inequality.

Linking electoral realignment to welfare politics: an assessment of partisan effects on active labour market policy in post-industrial democracies

This article examines the political determinants of the variations in active labour market policies across advanced democracies. Specifically, it investigates the conditions under which a welfare state accommodates rather than disregards the interests of labour market outsiders. Relying on the literature on post-industrial electoral realignment, this article argues that ideological orientations not only in socio-economic but also in sociocultural dimensions dictate the policy preferences of political parties for labour market programmes. This study then hypothesizes that libertarian governments are more likely than authoritarian governments to support human capital formation of labour market outsiders. An analysis of cabinet-based periodization data of 21 advanced industrialized countries from 1985 to 2017 shows that left- and right-libertarian governments favour public spending on active labour market programmes, thereby supporting this study’s hypothesis. Furthermore, it also reveals that while left-libertarian governments increase expenditures for direct job creation schemes, right-libertarian ones do so for employment assistance and training programmes.

Impact of Changes to Procedures on the Evaluation of the Effectiveness of Forms of Professional Activation in Poland

Active labour market policy is connected with the necessity to account for the funds allocated for it. The conducted analysis forms a part of research on the evaluation of the effects of changes introduced by legal regulations. The aim of this research is to assess the impact of changes to the methodology of calculating on values of the cost and employment effectiveness of basic forms of economic activation in Poland. They were introduced in 2015 in connection with ongoing discussion regarding the effectiveness of the evaluation methods used. The Ministry of Economic Development, Labour and Technology is currently responsible for activating the unemployed in Poland, and funds come from the Labour Fund. The analysis used is the regression discontinuity design. This analysis showed that significant changes occurred only in the slope of the regression line for cost effectiveness after 2015 for both procedures of its calculation. This shows that the new, introduced methods of calculating effectiveness were cosmetic in nature and did not significantly affect their values. A good recommendation for improving the method of evaluating forms of economic activation of the unemployed could be to extend the time of required employment.

Labour Market Regulation and Youth Unemployment in the EU-28

The rise of youth unemployment has been one of the most serious problems which policymakers have had to deal with over the last two decades. Neoclassical economic theory suggests that the deregulation (i.e. higher flexibility) of the labour market stimulates firms to hire young people and—therefore—reduces youth unemployment. The aim of this study is to empirically test the validity of this hypothesis, analysing data on youth unemployment and labour market regulation index (LMRI) for 28 European countries in the period between 2000 and 2018. The empirical results—using two different econometric techniques (time and fixed effects that allows to take into account the presence of heterogeneity of countries in the model and pooling mean group (PMG) estimator providing results about the short and long run relationship between LMRI and youth unemployment)—do not provide evidence in support of the neoclassical hypothesis. In particular, the effect of higher flexibility of the labour market is negative and statistically significant (at 1%) only when a dummy variable for the Eastern country group is included in the model. Vice-versa, the paper shows that higher economic growth and higher investment in active labour market policy represent the key variables to reduce the youth unemployment. In conclusion, the paper raises many doubts that the introduction of flexibility measures in itself can represent a useful tool to counteract the increase of youth unemployment in Europe.

Evaluation of the Effectiveness of Employment Programme on Young Unemployed People

Youth unemployment is of paramount concern for the European Union. Young people are facing potentially slow and difficult transitions into stable jobs. What optimally supports young people on the labour market poses a challenging question for economic policy makers. Active labour market policies can be beneficial to young unemployed people. The aim of active labour market policy is to improve employability of the unemployed. The consequences of an overly generous welfare state can be a reduction in motivation to work. The effectiveness of employment programmes is therefore a crucial step in the process. This paper aims to estimate the treatment effect of subsidized employment programmes on young Dutch unemployed people using difference in differences propensity score matching. We test whether the effects of subsidized employment programmes for young Dutch unemployed people are positive and strong in both the short and long term on the probability of re-employment and on the probability of participation in the regular educational system in comparison with the outcome produced in the event that an individual would continue seeking employment as an unemployed person. The probability of re-employment in short-term circumstances is positive, but small. Whereas with long-term examples (two years after the programme start) the probability is negative. Alternatively, the probability of participation in regular educational systems is positive in the short-term as well as in the long-term, but evidently decreases in the long-term. Welfare reforms undertaken in the Netherlands are directed towards enhancing efficiency. The role of social partners in social security administrations is reduced and the reforms are intended to promote reintegration of people who are out of work. There is a general agreement that the Netherlands is going in the right direction by giving priority to work and study over benefits, as it has become evident that generous social benefits make employment policies inefficient.

Fast track to the labour market? Experiences of learning in an active labour market policy measure for migrant teachers in Sweden

This article analyses the case of a Swedish so-called “fast-track” programme for newly arrived migrant teachers with the use of a conceptual model of lifelong learning dimensions (Boyadjieva & Ilieva-Trichkova, 2016). The material is based on individual and focus group interviews with individual participants, public employment officers and university teachers. While some aspects of the course can be seen as transformative and allowing for intrinsic learning, the participants’ need for work often overshadowed more ambitious course goals. Nevertheless, the course provides participants with the opportunity to reflect on new aspects of teaching and broader societal values.

Assessment of the net effect of the active labour market policy in Bulgaria

The assessment of the net effect of active labour market policy contributes to the effective use of public funds in order to achieve optimal results and provide opportunities for future changes in the priority areas of the employment action plans. The paper examines the basic concepts for assessing the net effect of active labour market policy and assesses the net effect of this policy in Bulgaria. In the process of assessing the impact of active labour market policy at the individual level for each program and measure included in the National Employment Action Plan in 2015 and funded from the state budget, the gross effect, deadweight effect, the substitution and displacement effects are estimated. The quasi-experimental design method is applied to assess the net effect of programs and measures on the labour market in Bulgaria. The estimation results demonstrate that the total net effect has the value of 14.5%. The net effect for women is significantly higher than for men. Regarding education, the highest net effect can be seen among those with primary or no education Regarding age, the highest net effect is observed among young people up to 24 years of age. As related to the duration of unemployment, the highest net effect can be seen among long-term unemployed people (over 24 months). In terms of working capacity, the highest net effect is observed among people with reduced working capacity. Regarding the type of settlement, the highest net effect can be seen in rural areas. The paper provides a number of conclusions and recommendations for increasing the effectiveness of active labour market policy and for improving the state of the labour market in Bulgaria. The analysis shows that in Bulgaria it is necessary to maintain the variety of different programs and measures on the labour market, covering different target groups.