How effective are active labour market programs?

In the latest Evidence Base journal of the The Australian and New Zealand School of Government Professor Jeff Boreland investigates the effectiveness of active labour market programs, like Work for the Dole. 

Australia spends a lot on active labour market programs - at present about 0.3% of its GDP. These include programs directed at increasing or improving the job search efforts of the unemployed, programs that provide work experience or on-the-job training (including public sector job creation and wage subsidies), and those that provide formal training and education.

In the latest Evidence Base journal issue, Professor Jeff Borland looks at the empirical evidence on active labour market programs in Australia, supplemented where relevant with international evidence.

Prof Borland concludes that active labour market programs can’t by themselves have a major impact on the rate of unemployment, but some spending on them is justified by outcomes such as increasing the pool of unemployed who are job ready, and sharing the burden of unemployment. Job search and wage subsidy programs are good ways to assist unemployed who are less disadvantaged. For unemployed with higher levels of disadvantage, he suggests that priority should be given to programs that create jobs with opportunities for linked training, and that provide a pathway to a permanent job.

Posted by Sarah Toohey. Cross posted from The Australia and New Zealand School of Government Blog