1. Active Labour Market Policies

Sustainable Development

Decent work

Economy Social Environment Employment Protection Rights Dialogue
Relevant SDG Targets
1.5, 8.5, 9.a, 9.b
Relevant Policy Outcomes
1, 2, 10, 3, 4, 6

On this page: DWA-SDG Relationship | Cross-cutting policy drivers | Partnerships | ILO Capacity | Resources

In 2016, 197 million people were unemployed and youth unemployment stood at 71 million. The challenge for governments is to generate opportunities for full, productive, freely chosen and decent employment for all women and men who seek work.

In this context, the primary goal of active labour market policies (ALMPs) 18 is to increase employment opportunities for job seekers through more effective and efficient matching of jobs (vacancies) and jobseekers while improving the employability of workers to reduce the skills mismatch. In so doing, ALMPs can contribute to employment and economic growth and reduce unemployment as rapidly as possible and with the best possible job match, by providing jobseekers with the support they need to successfully re-enter the labour market (15).

ALMPs are usually targeted at specific groups facing particular labour market integration difficulties: younger and older people, demobilized soldiers and those particularly hard to place, as well as those who are far away from the labour market such as people with disabilities, the youth neither in employment, education or training (NEET), and migrants. Active labour market policies may be classified in four categories:
  • a. employment intermediation services (job search assistance, information provision, counselling and matching);
  • b. labour market training;
  • c. subsidized employment (public employment/works programmes, wage and hiring subsidies, job retention subsidies); and
  • d. entrepreneurship and self-employment.
These may be directed at specific groups of labour market participants, such as the (long-term) unemployed and retrenched workers, the youth as well as other disadvantaged population groups, such as rural women, those in informal employment, and indigenous peoples (particularly women). The objective of these measures is primarily economic – to increase the probability that the unemployed will find jobs or that the underemployed will increase their productivity and earnings. However, the case for active labour market policies has also been linked to potential social benefits in the form of the inclusion and participation that comes from productive employment. In developing countries, public works have mostly served as a poverty alleviation measure rather than a labour market re-integration tool, especially when skills acquisition is not an important component of the programmes.

Investments in physical, financial, natural, human and social capital are not only necessary, but also have significant potential to contribute to building climate resilience and disaster risk management. These employment intensive programmes can restore and protect the productive capacity of lands, build resilient infrastructure capable of addressing climate change and natural disasters and at the same time, create livelihood and income security for the most vulnerable. The development of appropriate climate resilient infrastructure can also contribute to environmental preservation, land conservation and productivity. In addition, such infrastructure can mitigate the impacts of future disasters – disaster risk reduction – and provide jobs to the communities that need them the most.

Prominent examples of such ALMPs include the Mahatma Ghandi National Rural Employment Guarantee Scheme (MGNREGA) in India which guarantees one hundred days of wage-employment per financial year to a rural household whose adult members volunteer to do unskilled manual work, as well as the South African Expanded Public Works Programme (EPWP) which aims to provide “an important avenue for labour absorption and income transfers to poor households in the short to medium-term, also providing poverty and income relief through socially useful activities". Both of these schemes have also taken specific measures to provide women with equal opportunities for employment and skills development.

In order to ensure value for money, measurement of the effectiveness and cost efficiency of active labour market programmes continues to attract the attention of politicians, policy makers and the public at large, particularly in developed countries but also increasingly in emerging and developing countries. Impact assessments of various labour market programmes – quantitative and qualitative – are being implemented to assess labour market outcomes brought about by such programmes, including for particularly vulnerable groups such as women and youth.

DWA-SDG Relationship

ALMPs are situated at the intersection between the employment (seen in broad terms – quantity and quality) and social protection dimensions of the Decent Work Agenda, and are designed to add social value to economic investments, and economic value to social expenditures. Consequently, ALMPs address both the economic and the social dimension of sustainable development and in specific cases, the environmental dimension as well. ALMPs are primarily linked to SDG target 8.5, “by 2030 achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value”. They will also play a key role in supporting target 8.b, which calls for a global strategy on youth employment and 9.a , 9.b and 9.3 which aim to facilitate sustainable and resilient infrastructure development in developing countries, support domestic technology through employment-intensive public works interventions and promote access of small-scale industrial and other enterprises to financial services and their integration into value chains and markets. SDG target 8.5 is associated with ILO policy outcomes 1, 2 and 10. The ILO has developed numerous ALMP tools and strategies, such as employment-intensive investments, technical and vocational training programmes, the establishment and modernization of public employment services, career counselling and guidance, employment services for the youth, and targeted programmes for the integration of persons with disabilities.

Cross-cutting policy drivers

The ILO puts emphasis on the full respect of all relevant international labour standards in the implementation of ALMPs.

In addition to those listed under section 3, there are other Conventions, such as the Employment Service Convention, 1948 (No. 88), the Private Agencies Convention, 1997 (No.181), the Vocational Rehabilitation and Employment (Disabled Persons) Convention, 1983 (No. 159), and the Older Workers Recommendation, 1980 (No. 162).

Moreover, the ILO advises governments and other implementing partners on the application of such labour standards in labour market programmes. The dual nature of ALMPs as economic and social interventions makes them particularly attractive to all three members of the ILO constituency; their design, implementation and monitoring stand to benefit from concerted action initiated through social dialogue between government and the social partners.

The phrase “and equal pay for work of equal value” highlights the gender equality and non-discriminatory dimension of SDG target 8.5. ALMPs designed in support of this target must incorporate this dimension, and apply relevant labour standards. The ILO supports member states in their assessment and strengthening of their capacity to provide employment services to women such as the support given to the Turkish Public Employment Service Agency in both the last and current biennium.

Partnerships

ALMPs have gained prominence in recent years as a concrete solution to (youth) unemployment. Related ILO programmes are being financed by the World Bank, the European Union, UN agencies and several bilateral development partners, but also (and increasingly) by the national budgets of implementing countries. In many cases the ILO’s role consists of providing specific, technical labour market policy expertise while the ALMPs themselves are implemented by other partners, including government agencies and the private sector with technical advisory support from the ILO.

The Inter-Agency Social Protection Assessments (ISPA) Initiative, which involves some 20 international development partners, provides a concrete example of successful partnership around ALMPs. The ILO is leading the ISPA working group on public works programme tool assessment  to analyse the strengths and weaknesses of existing policies, schemes and programmes, as well as administrative and implementation structures in place, thus contributing to social protection systems and offering active labour market policy options for further action.

ILO Capacity

At ILO headquarter level the technical units in charge of employment policy (EMP/LAB), employment-intensive investments (EMP/INVEST), skills development (SKILLS), employment services and active labour market policies, application of standards, gender, equality and diversity, and workers and employers activities can and do provide support to ALMPs in the field. All ILO technical teams in the field include specialists covering several, if not all, these areas of expertise.

Resources

Resources on active market labour policies can be found at various ILO web sites,

18 - Passive labour market policies are those that are concerned with providing replacement income during periods of joblessness or job search, such as unemployment insurance or social transfers. They are included, for brevity, under the section on the extension of social protection. It should be noted that due to mainly fiscal constraints countries, particularly in the industrialized world, are adopting activation measures whereby recipients of passive policies are obliged to actively search for employment or participate in active measures, otherwise they face sanctions. In such cases, active and passive measures become mutually supportive and complementary.

15. EC. European Semester Thematic Fiche - Active Labour Market Policies . Brussels : European Commission, 2014.