Assessing the Effects of Active Labour Market Policies: A Review of the New Zealand and International Literature

Abstract

Active labour market policies encompass training programs, wage subsidies, welfare-to-work and placement services. They are used by governments around the world to alter both the level of unemployment and/or the composition of unemployment. Such policies aim: to affect the demand for labour by maintaining or creating jobs; to increase the supply of labour via training and rehabilitation; and to encourage labour mobility via placement counselling and mobility incentives. Most OECD governments have sought to implement effective active labour market policies as part of their response to unemployment. This paper examines the record of different types of active labour market programmes in a number of OECD countries. Through an examination of existing evidence on different kinds of active labour market policies, the paper attempts to determine which programmes best achieve government policy objectives. New Zealand active labour market policies are reviewed in light of the international evidence.