Labour Market Policy and Unemployment

Labour Market Policy and Unemployment

Impact and Process Evaluations in Selected European Countries

Labour Markets and Employment Policy series

Edited by Jaap de Koning and Hugh Mosley

This book examines the effectiveness of active labour market policies and their contribution to the prevention of social exclusion. The evaluation studies reported in this volume focus on two aspects of active labour market policies that have been relatively neglected in previous research and merit special attention.

Chapter 5: The impact of active labour market policy on job hirings and unemployment in the Netherlands

Jaap de Koning and Marike Arents

Subjects: social policy and sociology, labour policy


Jaap de Koning and Marike Arents 1 INTRODUCTION This chapter focuses on the impact of active labour market policies (ALMP) on job hirings and unemployment in the Netherlands. Using data on the regional level for a number of years, we use simple models to investigate whether ALMP contributes to more job hirings from unemployment and to decreasing unemployment. Since unemployment of long duration is particularly troublesome, special attention is given to long-term unemployment and the transition from long-term unemployment to employment. Long-term unemployment is strongly related to social exclusion. If ALMP contributes to a reduction in long-term unemployment, it would also be effective in combating social exclusion. During the 1990s the Netherlands came to be regarded as an example of good practice in both economic and labour market policy. Economic growth reached higher levels than in most other industrialized countries and the official unemployment rate dropped to a level which had not been seen since the 1970s. However, when we take a closer look it becomes clear that we are still very far from a solution to the unemployment problem. First of all it is important to note that the official unemployment figure strongly underestimates the unemployment problem. The reason for this is that many people with an unemployment benefit are not counted as unemployed officially. Beneficiaries over a certain age are not obliged to apply for jobs. Moreover, those who have an obligation to actively search for a job may not always do so...

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