Effectiveness of Active Labour Market Policies: Literature Review

Abstract

The field of labor market policy covers a very wide array of instruments, through which governments intervene on behalf of citizens encountering difficulties in the labor market (Clegg, 2015). This paper focuses on the Active Labor Market Policies, as an instrument to improve access to jobs for unemployed jobseekers, especially jobseekers belonging to vulnerable categories. The aim of this paper is to present the latest findings regarding the ALMPs effectiveness, through a literature review process. The qualitative method approach analyzes the effectiveness of ALMPs in the context. This paper is based on and presents the review of many articles and working papers in this field. Many observational evaluation studies have been published. The min findings indicate that there are many factors determining the effectiveness of the interventions (through ALMPs) like program length, monetary incentives, individualized follow up and activity targeting. Also, a recent study suggests that these programs are more likely to yield positive results when GDP growth is higher and unemployment lower, and that programs aimed at building human capital show significant positive impact. This paper contributes to the increase in knowledge regarding the effectiveness of ALMPs in general and especially in Albania, focusing on the recent literature and data regarding ALMPs implementation in this country.