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Labour Market Policy and Unemployment

Impact and Process Evaluations in Selected European Countries

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.
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Chapter 2: Models for aggregate impact analysis of active labour market policy

Jaap de Koning


Jaap de Koning 1 INTRODUCTION This chapter reviews the models which are currently in use for the aggregate impact analysis of active labour market policy (ALMP), or which may be used in the future. The European Commission and the EU member states see ALMP as an important tool in combating the unemployment problem (European Commission, 1996). The OECD is also a strong advocate for this type of policy, but insists that a number of preconditions be met to ensure the effectiveness of ALMP (OECD, 1994). Effective management and implementation of these policies are among the points mentioned by the OECD. One of the main focal points of this book is implementation, which will be addressed in detail later in this chapter. But while high priority is given to ALMP by policy-makers, surprisingly little is known about the aggregate impact of ALMP on unemployment and other labour market variables. The literature reviews conducted by the OECD (OECD, 1993) and by Bellmann and Jackman (1996a, 1996b) clearly illustrate this point. Most studies in this field use micro-data to assess the impact of a specific programme on the labour market position of the programme participants. But the effect on programme participants is of limited value. In the first place, the positive effects of ALMP measures on the employment chances of participants may be at the expense of nonparticipants, without having any real effect on the aggregate level. In the reverse situation, it is also possible to have no measurable effect on participants...

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