What works best when? The role of active labour market policy programmes in different business cycles

Abstract

Nordlund M. What works best when? The role of active labour market policy programmes in different business cyclesInt J Soc Welfare 2011: 20: 43–54 © 2009 The Author, Journal compilation © 2009 Blackwell Publishing Ltd and the International Journal of Social Welfare.At what point in a business cycle do long‐term unemployed persons gain most from participation in active labour market policy programmes (ALMP) as compared with openly unemployed persons? This article studies this question from the perspective of individual human capital with the hazard of labour market exit and chances of future labour market stability and equal post‐unemployment income as output variables. All the long‐term unemployed in Sweden were followed on a four‐year basis, with 1993 (recession) and 1999 (boom) as starting years. The study shows mainly positive effects among participants regardless of the state of the market. However, ALMP training has a ‘bridging’ effect over different labour market conditions, and a quick return to the regular labour market is, therefore, not as important for the success of participation as it is among ALMP employment participants.