Active labour market policies

Active labour market policies are measures that facilitate the transition from joblessness to employment by affecting workers’ job search behaviours, changing workers’ skills or increasing their labour market contacts. The impacts of direct policy measures on those exposed can work through expectations, have lock-in effects (slowing down the transitions), and treatment effects, which arise after policy exposure. Indirect (general equilibrium) effects often arise as unintended side effects on the non-treated, such as crowding out effects. Policy mechanisms operate through labour supply (worker skills) or demand (labour costs) but also through matching. Empirical evidence is large, mainly about direct effects and in many cases, there is consensus regarding results. The more mixed evidence is obtained in studies of vocational training programmes.