Active Labor Market Programs - Employment Gain or Fiscal Drain?


  • Brown
  • A.J.G.
  • Koettl
  • J.

This paper provides a new perspective in classifying ALMPs depending on their main objective, also in light of their relevance and cost-effectiveness during normal times, during a crisis, and during recovery. We distinguish ALMPs that provide incentives for retaining employment, incentives for creating employment, incentives for seeking and keeping a job, incentives for human capital enhancement, and improved labor market matching. We will discuss their direct and indirect effects determining their cost- effectiveness as well as to provide examples which may provide lessons to learn for transition and developing countries. This paper provides a systematic overview of how, why, when and to what extent specific policies are effective.



JEL Classification
J08, J22, J23, J38, E24


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