Measures of Active Labor Market Policy - such as training, wage subsidies, public employment measures, and job search assistance - are widely used in European countries to combat unemployment. This study provides novel insight on this important policy issue by discussing the role of the European Commission's Employment Strategy, reviewing the experiences made in European states, and giving the first ever quantitative assessment of the existing cross-country evidence.

Using panel data for 15 industrial countries, active labor market policies (ALMPs) are shown to have raised employment rates in the business sector in the 1990s, after controlling for many institutions, country-specific effects, and economic variables. Among such policies, direct subsidies to job creation were the most effective. ALMPs also affected employment rates by reducing real wages below levels allowed by technological growth, changes in the unemployment rate, and institutional and other economic factors. However, part of this wage moderation may be linked to a composition effect because policies were targeted to low-paid individuals. Whether ALMPs are cost-effective from a budgetary perspective remains to be determined, but they are certainly not substitutes for comprehensive institutional reforms.

Jobs provide higher earnings and better benefits as countries grow, but they are also a driver of development. Poverty falls as people work their way out of hardship and as jobs empowering women lead to greater investments in children. Efficiency increases as workers get better at what they do, as more productive jobs appear, and less productive ones disappear. Societies flourish as jobs bring together people from different ethnic and social backgrounds and provide alternatives to conflict. Jobs are thus more than a byproduct of economic growth. They are transformational —they are what we earn, what we do, and even who we are. High unemployment and unmet job expectations among youth are the most immediate concerns. But in many developing countries, where farming and self-employment are prevalent and safety nets are modest are best, unemployment rates can be low. In these countries, growth is seldom jobless. Most of their poor work long hours but simply cannot make ends meet. And the violation of basic rights is not uncommon. Therefore, the number of jobs is not all that matters: jobs with high development payoffs are needed. Confronted with these challenges, policy makers ask difficult questions. Should countries build their development strategies around growth, or should they focus on jobs? Can entrepreneurship be fostered, especially among the many microenterprises in developing countries, or are entrepreneurs born? Are greater investments in education and training a prerequisite for employability, or can skills be built through jobs? In times of major crises and structural shifts, should jobs, not just workers, be protected? And is there a risk that policies supporting job creation in one country will come at the expense of jobs in other countries? The World Development Report 2013: Jobs offers answers to these and other difficult questions by looking at jobs as drivers of development—not as derived labor demand—and by considering all types of jobs—not just formal wage employment. The Report provides a framework that cuts across sectors and shows that the best policy responses vary across countries, depending on their levels of development, endowments, demography, and institutions. Policy fundamentals matter in all cases, as they enable a vibrant private sector, the source of most jobs in the world. Labor policies can help as well, even if they are less critical than is often assumed. Development policies, from making smallholder farming viable to fostering functional cities to engaging in global markets, hold the key to success.

This paper provides a meta-analysis of microeconometric evaluation studies on the effectiveness of active labor market policies. The analysis is built upon a systematically assembled data set of causal impact estimates from 57 experimental and quasi-experimental studies, providing 654 estimates published between January 1990 and December 2017. We distinguish between the short and longer term impacts in our analysis; at 6, 12, 24, and 36 months after program start. After correcting for publication bias and country-specific macroeconomic characteristics, subsidized labor and public employment programs have negative short-term impacts, which gradually turn positive in the longer run. Schemes with enhanced services including job-search assistance and training programs do not have these negative short-term effects, and stay positive from 6 until 36 months after program start.

The United States lacks a comprehensive and coordinated labor market policy. The components of U.S. labor market policy are derived from the activities and programs of many different agencies and Congressional committees. In addition to the Department of Labor, major aspects of labor market policy are sponsored by the Departments of Health and Human Services and Education, and the Social Security and Veterans Administrations. There is no centralized authority over these various activities and there is no one administrative agency responsible for the implementation of active labor market policies. This study seeks to evaluate the effectiveness of U.S. labor market policies that are presented and social and political barriers to policy impact are discussed.

Given the labor market challenges that countries in the Middle East and North Africa (MENA) region are facing (notably high unemployment, prevalence of skills mismatches, low labor market mobility, and lack of formal employment networks), employment services could be a relevant policy instrument to assist unemployed individuals to find jobs. Despite high and increasing unemployment rates, employers in the region are facing difficulties to find workers whose competences and skills fit their employment needs. The study first surveys international best practices for the delivery of employment services and then reviews the provision of these services in a selected group of countries in the MENA region, with a focus on public provision through existing public employment agencies. Findings indicate public agencies in the region face many challenges for the effective delivery of employment programs, namely poor administrative capacity,system fragmentation, lack of governance and accountability, regulation bottlenecks, and flaws in program design. In order to help unemployed workers to obtain the competences required by available jobs, this study proposes a reform agenda based on the development of strong partnerships between public agencies, public providers, and employers for the design and implementation of flexible employment programs that respond to real employment needs. These partnershipss will need to be developed with strong governance mechanisms that make beneficiaries, private providers, and firms accountable for making sure that investments in employment programs lead to employment insertion. The book is directed to policy makers, practitioners, economists, and anyone interested in international best practices to promote a more effective delivery of employment services.