Skip to main content

Table 1 Relevant instruments, target groups, and intended effects of ALMPs

From: Active labor market programs - employment gain or fiscal drain?

Target area Category (based on aims) Instruments Targeted workers Intended effects
Labor Demand I. Provide Incentives for retaining employment Work sharing and short work Insiders Reduce outflow from employment
Wage subsidies Retain labor market attachment
II. Provide Incentives for creating employment Outsiders Increase inflow into employment
Hiring subsidies Increase labor market attachment
Business start-up support
Labor Supply III. Provide incentives for seeking and keeping a job In-work benefits, subsidies, tax credits Insiders and Outsiders Increase inflow into employment by strengthening work incentives
Reduce outflow from employment
Increase labor market attachment
Provide income support
Public works Outsiders Increase inflow into employment by strengthening work incentives
Increase labor market attachment
Provide income support
Activation and Workfare Outsiders Increase inflow into employment by strengthening work incentives
Sanctions
IV. Provide incentives for human capital enhancement On-the-job training Outsiders and Insiders Increase inflow into employment
Classroom training Increase productivity
Improve match quality
Labor Market Matching V. Improved labor market matching Job search assistance Outsiders Improve job search efficiency
Increase inflow into employment
Employer intermediation services Outsider and insiders Improve job search efficiency
Improve match quality
Increase inflow into employment
Counseling and monitoring Outsider Improve job search efficiency
Increase inflow into employment
  1. Note: “Insiders” refer to those who are currently employed, “outsiders” to the unemployed, long-term unemployed, discouraged, informal workers, and inactive.
  2. Source: Authors.