Aktiivisen työvoimapolitiikan mahdollisuudet työllisyysasteen kasvattamisessa

Abstract

This article considers the impact of active labor market policy on the employment rate. It reviews the literature on wage subsidies, training and job search assistance. Particular attention is paid on the side effects of active labor market policies such as the lock-in effect, substitution effect and displacement effect. Recent research concerning the implementation of active labor market policies is also reviewed. The evaluation studies show that private sector wage subsidies have positive employment effects both in the short and long runs. Public sector wage subsidies do not have positive employment effect on any time frame. Research suggests that wage subsidies may have substantial displacement and substitution effects. Training programs have strong lock-in effects in the short run, but positive employment effects in the long run. Job search assistance has a positive employment effect especially in the short run but has also significant substitution effects. The quantitative impact of active labor market policy on the employment of the treated is 5-12 percentage points a couple of years after the program end. The impact on the employment rate is smaller due to substitution and displacement effects.