Activation as Strategic Response to the Unemployment Crisis
Philip O’Connell, Presentation to Social Protection Seminar, Dublin, March 3rd, 2012
Outline
Activation: What Works?
Research evidence on the effectiveness of different types of active labour market programmes
Are We Doing the Right Thing?
The extent to which current training provision for the unemployed is appropriate and adequate in terms of both composition and content
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Long-term Unemployment has risen steadily during crisis: reducing LTU should be a key objective of labour market policy 16 14 12 10 % 8 6 4 2
Short-term
Long-term
Source: Constructed from the Quarterly National Household Survey, Central Statistics Office
Jul-11
Apr-11
Jan-11
Oct-10
Jul-10
Apr-10
Jan-10
Oct-09
Jul-09
Apr-09
Jan-09
Oct-08
Jul-08
Apr-08
Jan-08
Oct-07
Jul-07
Apr-07
Jan-07
0
Active Labour Market Programmes
Supply side
Job Search Assistance/Encouragement
Training
Interviews/counselling, job placement services, etc Increase effectiveness of job search + monitoring & sanctions Enhance skills and employment prospects
Demand Side
Public-sector Employment schemes
Retain contact with labour market
Incentives to employers or self-employment
Encourage employers to create new jobs or retain existing jobs
The Impact of Job Search Assistance
Job Search Assistance – International evidence
Effective for many groups Low cost More effective with regular monitoring and sanctions
In Ireland ( NEAP 2006-08):
About 25% of eligible clients fell through the system About 25% not eligible - received job search assistance in the past Those that receive assistance without monitoring/sanctions may reduce job search
Problem: Lack of regular monitoring, assistance or sanctions
Programmes with strong market linkages show strong positive effects on employment (1990s, 2006-8) Market Orientation Labour Market Leverage Supply – Training
Weak
Strong
General Training
Specific Skills
Generally Weak
Strong Positive
But strong positive - Medium & High level skills impact of training in - Employment and wages job search
Demand – Employment
Public Employment
Employment Incentives
No Impact on Employment
Strong Positive - Men & over 25s
Overall Impact of Training (2006-08)
Participants in FAS training were 9% less likely to be unemployed Holds when controlling for a wide range of factors: age, education, labour market experience, marital status, location, access to transport, previous exposure to unemployment etc. Highest returns: Short duration training in Job search techniques High level Specific Skills training Returns to General training were much lower Zero for Low Skilled training. Problem: Nearly 70% of training effort in General and low Specific Skill training.
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The Need for Intelligence Labour market policy is compromised by information deficit Demand:
Weak labour market monitoring Lack of engagement with employers - e.g. Sectoral skills councils
Supply:
No School Leavers Survey since before the crisis Most evaluation research is dated – 1990s and 2006-08 No regular evaluation of outcomes from FAS or the Education sector NESC (2011) : Ireland needs to develop a proper evaluation system Guide policy Deliver effectiveness, efficiency and value for money
Pathways to Work
Battle against unemployment as top priority Commitment to reducing Long-term Unemployment
Integration of income support with activation 21,000 additional training places Profiling to target resources on those most at risk Extension of employer PRSI scheme Greater emphasis on training in CE
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Pathways: Concerns Activation: Research shows that continual monitoring, assistance, encouragement and sanctions is key Lack of immediate activation Absence of rigorous monitoring system
Jobseekers required to update case-workers on progress at frequent specified intervals
Capacity?
OECD: insufficient staff to implement active system before the crisis Live Register has grown from 290,000 in 2009, to 440,000 in 2012
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Community Employment
CE delivers many important services CE has pockets of best practice sand effectiveness in getting participants back to work But, on average, and overall, CE has been found consistently to be much less effective than other schemes in getting people back to work True even when we control for a wide range of personal factors age, sex, education, literacy, previous labour market Unlikely that extra spend on training can overcome this CE + Rural Social Scheme + Jobs Initiative + TUS = 40% of budget Better to recognise it is not an ALMP, recognise its useful role in social inclusion and reallocate part of the budget to a social service heading?
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The Way Forward: Basic Principals: Demand and Supply Demand Pathways recognises the importance of designing programmes to match labour market needs Can Expert Group on Future Skill Needs + FAS Skills and Labour Market Research Unit meet that challenge? Need for ongoing and up-to-date information Specific sector skills councils
Ensure nature and content of education and skills are market relevant to enhance job chances of trainees Programmes should ideally include job placement component
Supply Respond to upward shift in educational profile of unemployed Provide intensive retraining to tackle structural unemployment among former construction workers 12
The Way Forward: Basic Principals: Providers
Education and Training is excessively provider driven
There should be no attempt to “shoehorn” provision into legacy structures or to design provision around such structures Can SOLAS + Local Education and Training Boards meet training needs?
NEES as broker/coordinator of training?
Providers should be chosen on the basis of their ability to deliver quality training
Not designed to meet training needs of unemployed or skill needs of employers
Provision could be incentivised according to results (job placements) to help ensure ongoing effectiveness
All education, training and employment schemes should be subject to rigorous evaluation to enable timely closure / restructuring of ineffective interventions
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