Labour market policies

Abstract

Labour market policies are an important part of the institutional framework that regulate the labour market. They can be divided into three macro-categories: 1 employment protection legislation; 2 passive policies; 3 active policies. These interventions are addressed to different targets: the unemployed, those at risk of unemployment, and the so-called discouraged. The historical trend of labour market policies and comparative data show a strong variability between countries both in reference to the strictness of employment protection legislation and the amount of public spending concentrated on active and passive labour policies, and in relation to the number of people protected by these measures. The comparative analysis further shows that each labour market policy regime is associated with a specific institutional configuration: limited economic support and weak legislative protections combined with underdeveloped active labour policies, in the non-inclusive growth (NIG) economies. Strong interventions in active labour policies and extensive training schemes characterise other national cases (egalitarian inclusive growth, EIG). Compulsory public insurance schemes with social rights linked to employment status and dualisation are typical features of other countries (dualistic inclusive growth, DIG); fragmented safeguards and a lack of active policies characterise other national cases (non-inclusive low growth, NILG).