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ESRI paper on Active Labour Market Policies released

November 9th, 2011 · 1 Comment · Recession, Social Policy

Today the ESRI releases the first paper in a new series on Renewal. The study reviews international and national evidence on Active Labour Market Policies and their impact on getting those who are unemployed back into work.

What Can Active Labour Market Policies Do, by Dr Elish Kelly, Dr Seamus McGuinness and Dr Philip O’Connell (ESRI) examines 50 pieces of research into initiatives in Ireland and internationally including.

  • Job search assistance (where people are interviewed and directly and actively assisted to find work and training sometimes with threat of sanction if claimants do not participate,)
  • Training programmes
  • Wage subsidised programmes in the private sector
  • Public Sector job creation.

The paper argues

effective job search assistance and monitoring should be the corner-stone of all services to unemployed people and serve as the gateway to employment and training opportunities, irrespective of prevailing labour market conditions. Even during a recession activation is essential to maintain connection with the labour market.

Significant resources have been invested in job search assistance, training and labour market programmes in Ireland.  There has been very little research into the efficacy of these initiatives here mainly because of full employment in the era of the Celtic Tiger.

In terms of private sector wage subsidies the researchers point to the general success of these programmes as forms of work experience and also job creation in the longer term but warn that there is often deadweight – this is where subsidies are given to create jobs which would have been created anyway.

From my examination of the research on internships JobBridge is not a wage subsidy programme but there is no doubt that there are real concerns about deadweight.

The researchers say it is too early to address the impact of Jobbridge. (Remember that if you see someone pointing to this paper as evidence that wage subsidy/jobbridge works!  There are other forms of wage subsidy in Ireland like PRSI subvention or cancellation where someone long term unemployed is recruited but take up is very small. And yes I know JobBridge is subsidising wages – in fact it’s obliterating them in many cases.)

Public sector job creation programmes are more extensively reviewed.  These include initiatives like Community Employment.  Researchers point to international evidence that long term employment prospects of those on such programmes are poorer, there is a stigma associated with such schemes.  Although there may be a social good with the work performed the employment prospects of participants are less likely to improve than those who are on training programmes or receiving job search assistance.

Overall the researchers point to the success of job search assistance and training initiatives which are combined with assistance in helping people find employment.  They welcome the changes in this sector in Ireland but warn there is more to be done.

However, it is as yet unclear how the provision of training is to be organised between DSP, SOLAS and the education and training providers. The core principle governing that relationship between activation and training provision should be that the transition needs to be seamless, based on the needs of both unemployed individuals and current and future employers.


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