Rethinking the Welfare State: The prospects for ... - e-Library

Labour market training 193
extent that structurally unemployed workers are receiving PLMPs, this is unlikely to have
any discernable impact on their employment prospects. Income maintenance alone
provides no incentive to pursue training. Although most countries still spend a larger
proportion of resources on PLMPs, the trend is one of decreased proportions of money
allocated to such measures accompanied by a corresponding increase in the resources
devoted to ALMPs. 30
Government-run active labour market policies: supply-side subsidies
In contrast to PLMPs, “the intent of active labor market policies…is to act like a
trampoline to facilitate those who fall to bounce back into the labor market.” 31 Existing
ALMPs may be divided into four broad types: job search assistance, short-term
classroom training, on-the-job training (i.e. subsidized employment), and long-term
remedial training. Evaluating the net impact of each of these types of ALMPs is
methodologically complex. In addition to direct costs and benefits, evaluation involves
taking into account deadweight losses (program participants who would have found
employment without the program), substitution losses (program participants who find
jobs that would have been filled by non-participants), and displacement losses (program
participants displacing currently employed non-participants), all of which defy accurate
measurement. 32 Notwithstanding the complicated nature of accurate program evaluation,
there is growing evidence from the United States and Canada respecting the efficacy of
the various types of ALMPs. Kluve and Schmidt report that, “training measures and job
search assistance are more likely than subsidy-type schemes to display a positive impact
on program participants.” 33 In contrast, almost all evaluations of job creation and
employment subsidies in the public sector report that these initiatives fail to deliver. 34
Other studies suggest that the results of ALMPs have been mixed. 35 It is to the problems
associated with the implementation of ALMPs that we now turn.
Job search assistance (JSA)
In both Canada 36 and the United States, 37 government-administered job posting and
placement programs help individuals to find jobs for which they are qualified. In some
cases, these programs have roughly the same success rates as job-training programs and
at much lower cost. 38 Evaluations of the JSA element of the Job Training Partnership Act
(JTPA) in the United States have found that “these programmes have also been
successful in reducing social assistance receipt, although they do not typically eliminate
it.” 39 Meyer surveyed five ALMP experiments in the United States and found that “job
search monitoring and assistance together significantly reduce the duration of claims.” 40
Further, the OECD reports that, “Intensified job placement and counselling programmes,
aimed at encouraging effective job search by the unemployed, have proved especially
cost-effective.” 41 Some commentators also believe that JSA is superior to training
programs because “it ensures that disadvantaged individuals receive jobs rather than only
providing them with job training and then assuming employment will follow.” 42 While
debatable, this conclusion does highlight an important issue for policy-makers: not every
unemployed worker requires extensive training or education.