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The strategy of an active labour market policy (ALMP) is popular, but its content is still far from clear. With this historical and contextual analysis, the author aims to capture the strategy’s core content. Development of the strategy has been full of paradoxes. However, the goal of improving the functioning of the labour market so as to promote full employment without accelerating inflation has remained, as have the central attributes of ALMP, its selectivity and supply‐side measures. Labour market circumstances have changed significantly since the creation of the strategy and many of its premises have been questioned. Although the strategy has been vital, it is today once again in crisis. However, encouraging employment development in some European countries shows that an active labour market policy can play an important role together with economic policy and the policy of the social partners.

The purpose of this paper is to assess the evolution of labour‐market performance in the Organization for Economic Co‐operation and Development (OECD) over the last decade, considering the robustness of the claims made in an important OECD follow‐up study.

The paper sets up an empirical framework calibrated on an important OECD follow‐up study, and suggests some ways in which the impact of unobserved heterogeneity and outliers on policy estimates can be treated in a cross‐section framework. The framework applies to the data for 30 OECD countries.

The paper finds that changes in labour‐market performance are inversely linked to lagged unemployment. Changes in the share of construction workers are also significant even in the presence of various kinds of policy change indicators. As far as the latter are concerned, the results highlight the role of unemployment benefits and, especially, active labour‐market policies.

The kind of policy change indicators used do not allow the adoption of panel data techniques.

An important policy role seems to emerge for unemployment benefit reforms and, even more so, active labour‐market policies. The evidence also supports the contention that the construction sector is important for labour‐market performance.

The paper brings to the fore novel evidence about cross‐country labour‐market performance at a time when this issue is of high interest for citizens and policy‐makers.

The paper discusses the various models that can be used to analyse the aggregate impact of active labour market policy (ALMP) on labour market outcomes. The aggregate approach to policy evaluation is important. Contrary to evaluations based on micro data, it takes substitution, displacement and other indirect effects into account. The most promising framework for analysing the aggregate impact of ALMP is offered by a flow model approach of the labour market. However, other approaches such as VAR models are also treated in the paper. After discussing the theoretical models the paper gives a review of the empirical literature, in which these models are used to measure the aggregate impact of ALMP. On the basis of the results we are bound to conclude that ALMP makes a big difference to the level of unemployment. There is some evidence that disadvantaged groups benefit more from this type of policy than other groups. The fact that the impact is small on average may hide considerable variation between regions and sites. Future research should concentrate on attempting to relate this variation to differences in implementation. Then we might be able to identify the factors that are decisive for the success or failure of programmes which could then be used to improve ALMP.

Purpose – Since the mid-1980s, unemployment policy reforms in Europe and throughout the rich democracies have stressed publicly supported activation of the unemployed through both reductions in perceived disincentives to work as well as commitments for improved training, employment services, and related policies. In this chapter, I systematically explore the domestic and international political economic sources of these policy changes.

Methodology/approach – I test a set of hypotheses – original and derivative – about the domestic and international determinants of labor market policy change through pooled time-series cross-section analysis of 1980-to-2002 annual data from 18 capitalist democracies. The dependent variables consist of national spending on active labor market policy, measures of passive unemployment compensation benefits, and the ratio of active to passive unemployment program spending. Causal models account for spatial diffusion of policy reforms as well as core political and economic determinants of policy change.

Findings – I find that Left party governments and coordinated market institutions buoy resources for active labor market programs, maintain relatively generous passive unemployment supports and entitlements, and, at the same time, foster a shift to more active social policy. International trade openness promotes generous active labor market policies while more left-leaning voters and veto points within the polity significantly constrain reductions in unemployment benefits and entitlement rights. De-industrialization reinforces policy reforms toward activation while high unemployment rates engender cuts in passive unemployment benefits and eligibility conditions.

Originality/value – Overall, the chapter demonstrates that the economic effects on policy change notwithstanding, politics fundamentally matters: domestic political dynamics and variations in institutions explain the preponderance of the change (or lack thereof) in unemployment policy.

The chapter elaborates a critical theoretical narrative about the political economy of European capitalism. It illustrates how precariousness has been exacerbated by the impact of the global financial crisis and the emergence of a new system of European governance. Theoretical accounts in the sociology of work and labor studies have demonstrated the complexity of the outcomes and widely discussed the role of national labor market institutions and employment policies and practices, political ideology, and cultural frameworks impinging upon precarious work as a multidimensional concept. The chapter’s core concern is to illustrate how shifts in power resources, and particularly the weakening and deinstitutionalization of organized labor relative to capital, has acted as a central social condition that has brought about precariousness during the years leading up to and following the 2007–2008 crisis. In so doing, the chapter aims to overcome the existing theoretical accounts of precariousness which have often been limited by one or another variant of “methodological nationalism,” thereby exploring the transnational apparatuses that are emerging across national economies to date, and which impinge upon the structures and experiences that workers exhibit in an age of growing marketization.

Introduction: Despite its significance, the research on international migration with a specific focus on the European Union (EU) needs to be strengthened with comprehensive studies, for developing better immigration and integration policies. Considering the amplitude of migration flows in Europe and recent challenges brought by the Covid-19 pandemic crisis, the Brexit decision and humanitarian dimension of the migration phenomena (asylum seekers and refugees), the need for better immigration and integration policies within the host countries’ labor markets stands out as a major research direction, especially in case of immigrants looking for better working and living conditions. Aim: This chapter aims to design specific immigration clusters within the main EU-10 destination countries (including Spain, Italy, Belgium, Denmark, Finland, France, UK, Germany, Austria, and Sweden) (cluster analysis procedure); and to identify feasible ways and specific policies for immigrants’ labor market success (spatial analysis and macroeconometric models). Method: The methodological framework consists of two parts: (i) immigration clusters analysis, based on the interlinkages between several fundamental migration coordinates, namely, economic welfare at destination, employment opportunities for the foreign population, migrant integration policies and associated governmental efforts, educational background; and (ii) spatial analysis models, namely spatial lag–autoregressive and spatial error, and other three econometric procedures, respectively, the robust regression, Panel Corrected Standard Errors, and Arellano-Bond Dynamic Generalized Method of Moments. National data compiled for the 10 main EU receiving economies during 2000–2015, with a particular focus on Spain were used. Findings: The impact of the proposed research is reflected through a set of new specific tailored ways, policies and strategies that can be adopted and implemented by the policy-makers across Europe. Our empirical results show that, overall, EU-10 countries still fail to identify immigrants with high levels of education and skills acquired to enhance their potential for labor market integration. Policy-makers should always monitor the specific ways in which migration policies lead to concrete positive labor market outcomes for immigrants and that the tools used for implementing these policies are suitable in achieving predefined migration goals. Therefore, a particular focus should be on developing a new immigration system to select migrants for their skills and high level of human capital, by following the best practices examples of other receiving countries.

Globally, Denmark stands out in terms of achieving high employment rates, containing unemployment and providing a labour market model combining flexibility, security and activation with a strong role for the social partners. The Danish labour market institutions and policies are seen as the catalyst for the transformation from industrial economy to a globalised, post-industrial and knowledge-based economy in which socio-economic equality and workforce security go hand in hand with competitiveness and the adaptability of business. In the 2000s, this mutual relationship came to be known as the Danish flexicurity model. Meanwhile, as a policy blueprint, ‘flexicurity’ has never really influenced Danish politics, and the reforms implemented since the 2000s have deviated from the premises of the model. This paper critically assesses the Danish model and its institutional components. It tracks the emergence of the Danish collective bargaining model as well as the flexicurity model. It scrutinises the challenges and performance of the current Danish labour market institutions and policies in a comparative perspective and discusses the extent to which the Danish experiences can and should be imitated abroad.

The purpose of this paper is to provide quantitative estimates on the impact of active labour market policy (ALMP) on youth unemployment in Europe based on a macroeconomic panel data set of youth unemployment, ALMP and education policy variables and further country-specific characteristics on labour market institutions and the broader demographic and macroeconomic environment for all EU-Member States.

The authors follow the design of an aggregate impact analysis, which aims to explain the impact of policy on macroeconomic variables like youth employment and unemployment (see Bellmann and Jackman, 1996). This follows the assumption that programmes, which are effective in terms of improving individual employment opportunities, are going to make a difference on the equilibrium of youth unemployment.

The findings show that both wage subsidies and job creation are reducing aggregate youth unemployment, which is in contrast to some of the surveys of microeconomic studies indicating that job creation schemes are not effective. This finding points towards the importance to assist young people making valuable work experience, which is a benefit from job creation, even if this experience is made outside regular employment and/or the commercial sector.

In terms of the variables to model public policy intervention in the youth labour market, only few indicators exist, which are consistently available for all EU-Member States, despite much more interest and research aiming to provide an exhaustive picture of the youth labour market in Europe. The only consistently available measures are spending on ALMP as a percentage of gross domestic product (in the different programmes) and participation stocks and entries by type of intervention.

The different effects found for the 15–19 year olds, who seem to benefit from wage subsidies, compared to the effect of job creations benefitting the 20–24 year olds, might relate to the different barriers for both groups to find employment. Job creation programmes seem to offer this group an alternative mechanism to gain valuable work experience outside the commercial sector, which could help form a narrative of positive labour market experience. In this way, job creation should be looked more positively at when further developing ALMP provision, especially for young people relatively more distant to engagement in regular employment.

Improving the situation of many millions of young Europeans failing to find gainful employment, and more generally suffering from deprivation and social exclusion, has been identified as a clear priority for policy both at the national level of EU-Member States and for EU-wide initiatives. With this study, the authors attempt to contribute to the debate about the effectiveness of policies which combat youth unemployment by estimating the quantitative relationship of ALMP and other institutional features and youth unemployment.

To research the relationship between youth unemployment and ALMP, the authors created a macroeconomic database with repeated observations for all EU-Member States for a time series (1998–2012). The authors include variables on country demographics and the state of the economy as well as variables describing the labour market regimes from Eurostat, i.e. the flexibility of the labour market (part-time work and fixed-term employment as a percentage of total employment) and the wage setting system (level and coordination of bargaining and government intervention in wage bargaining).

We examine the effect of increasing online job vacancies on labor market efficiency in the context of a developing country. The findings suggest that the rise in online job vacancies has enhanced labor market efficiency by improving the match between job seekers and employers. This hypothesis is supported by an increase in the hiring and net employment growth rates. The study shows a reduction in the vacancy rate in segments of the labor market, with a significant share of vacancies posted online, after implementing a policy requiring firms to report vacancies to the Public Employment Service in Colombia. The results from a Beveridge Curve estimation imply a 1.2 percentage point (pp) decrease in the vacancy rate for a given unemployment rate and increments in the hiring and employment growth rates of 1.1pp and 1.3pp after the policy change, respectively. These results support the notion that policies to reduce information barriers can improve labor market performance.