Active Labour Market Policies: What Works for the Long-Term Unemployed?

Eppel Rainer (), Huemer Ulrike, Mahringer Helmut and Schmoigl Lukas
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Eppel Rainer: Department of Labour Economics, Income and Social Security, Austrian Institute of Economic Research, Vienna, Austria
Huemer Ulrike: Department of Labour Economics, Income and Social Security, Austrian Institute of Economic Research, Vienna, Austria
Mahringer Helmut: Department of Labour Economics, Income and Social Security, Austrian Institute of Economic Research, Vienna, Austria
Schmoigl Lukas: Department of Labour Economics, Income and Social Security, Austrian Institute of Economic Research, Vienna, Austria

The B.E. Journal of Economic Analysis & Policy, 2024, vol. 24, issue 1, 141-185

Abstract: There is still a lack of knowledge on how to effectively help the long-term unemployed into employment. We evaluate a wide range of active labour market policies for this target group, using a dynamic matching approach. Measures vary considerably in the extent to which they improve labour market prospects. Human capital-intensive training programs that substantially enhance vocational skills and employment programs are most effective, short activating job search training the least. Our results suggest that not only wage subsidies in the private sector, but also direct job creation in the public and non-profit sectors can work, if properly designed.

Keywords: long-term unemployment; active labour market policy; public employment service; training; wage subsidies; direct job creation (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1515/bejeap-2023-0079

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