Innovation and Action on Active Labour Market Policies

The ETF event on ‘Active Labour Market Policies and Human Capital Development: Fostering Innovation and Impactful Actions for Recovery’ on 28 April had a large and highly engaged participation.

The event, which is the third in the ETF’s series exploring employment and skills development, focused on the findings of ETF’s research on Active Labour Market Policies (ALMPs) in 2020 which included an assessment of their effectiveness in responding to the impact of Covid-19 crisis and dealing with its aftermath. The ETF’s research also included a mapping of innovative practices of ALMPs among EU Member States, EU Neighbourhood and Central Asia countries.

The opening address of the event was given by the ETF Head of Skills Identification and Development Unit, Manuela Prina who highlighted the ‘urgency’ for effective ALMPs particularly for ETF partner countries.

Panellists from the European Commission, Jochen Schmidt and Kamil Valica, from the Directorates from Neighbourhood and Enlargement Negotiations, and Employment, respectively were joined by Amira Ramhorst, Team Leader of the Employment and Social Affairs Platform Western Balkans, Regional Cooperation Council, and Theodora Xenogiani from the OECD. The ETF research was presented by international experts Eamonn Davern and Lukasz Sienkiewicz from the Fondazione Giacomo Brodolini.

The sessions and panels were moderated by ETF experts Iwona Ganko, Cristina Mereuta, Franca Crestani and Eva Jansova.

Session one - the impact of the pandemic on Active Labour Market Programmes and Public Employment Services.

“Labour market interventions and subsidies need to be targeted, rigorous, and well informed with outreach to disadvantaged individuals and communities,” said Eamonn Davern. Challenges include an insufficient coordination of data and compatibility of IT systems and deciding when to remove or ease ALMPs so as not to create distortion. Employment services need to look at skills for the future and the digital and green transitions, enhance public private partnership, and personalise employment services with better cooperation with providers.

Case studies from the ETF partner countries of North Macedonia, Moldova, and Jordan illustrate the variety of experiences on ALMPS due to the pandemic. North Macedonia, for instance, benefitted from labour market adaptations in place in response to the 2008 economic crisis. Moldova has had the dual challenge of introducing new labour market policy responses at a time of budgetary reductions and Jordan has had to deal with coordination issues within its overarching institutional framework.

“The changes enforced by the pandemic such as developments of their digital infrastructure will assist all countries with future labour market adaptations,” assured Davern.

Amira Ramhorst from the Western Balkans Regional Cooperation Council described the challenges for ALMPs in the region to address the pandemic effect and post-pandemic effect which has exaggerated already existing concerns in the region such as high youth unemployment, low activity rates and high gender gap. The EU’s enlargement road map for the Western Balkans will extend its youth guarantee scheme and adapt to the region. A pilot has already been implemented in North Macedonia. “Strong buy-in from all stakeholders is needed to succeed,” said Ramhorst “with better understanding of employers and the needs of employees”. Uncertainty and volatility still exist in the region due to the pandemic impacting the ALMPs delivery, expertise, and response. Ramhorst thanked the ETF for facilitating peer learning in the region and across regions to address these many issues.  

Jochen Schmidt from the European Commission also extended his complements to the ETF for informing the EU’s policy development and the Commission’s future assistance. “Supporting changes for the knowledge-based economy and the twin transitions of green and digital are priorities for the EU’s external cooperation,” said Schmidt.  He gave an overview of his work with the Eastern Partnership which is focused on young people within two dimensions, the political sphere, and the economic sphere. In the latter the key features are investing in people and reform of education and training systems, overcoming the digital divide and the upskilling of disadvantaged youth,  social entrepreneurship, employment policies and working with employment services. As in the Western Balkans initiatives linked to the youth guarantee will be piloted the Eastern Partnership including youth entrepreneurship for the green economy.

Key features of the EU’s support to young people in the Eastern Partnership interventions are ‘outreach and communication, career guidance, and enhancing mobility through Erasmus+’ said Schmidt.

Session two- Build back better: fostering more impactful ALMPs

Session two of the event presented findings on how to improve ALMPs was presented by Lukasz Sienkiewicz.

“Interventions are more effective when customised to enterprise demand and delivered in partnership mode between the public and private sectors for which good management capacity is needed,” stressed Sienkiewicz.

Panellists in the second session of the event, Kamil Valica from the European Commission and Theodora Xenogiani from the OECD, agreed that the policy mix is crucial to ensure the effectiveness of ALMPs. Employment support measures need to be combined with training, career guidance and job search assistance. For greater impact and they need to take a comprehensive approach starting from the design to ensure the effective results are planned and that they are not just a subsidy or a means of cheap labour. It is important to build the evidence base on what works. Monitoring and evaluation needs to be strengthened including on the social impact for which feedback from participants is needed to understand how the support measures have impacted their lives. Low-income countries with low institutional coherence will of course face greater challenges implementing effectively ALMPs.

A future perspective to ALMPs is needed looking towards post-pandemic and digital and green transitions. Xenogiani from the OECD underscored the importance of larger additional investments to support transition from declining sectors to growing sectors and the necessary upskilling and reskilling this entails.

Kamil Valica announced the scaling up of the youth guarantee throughout the EU Neighbourhood as a result of a renewed partnership. Valica, the final speaker at the event underscored the key points raised in the discussions from both sessions and pointed to the value and merits of the youth guarantee scheme which caters for different categories of needs and combines counselling and guidance to young people to help them address barriers to entering the labour market.

Other than increased employment, other benefits from ALMPs uncovered by the ETF’s research include the empowerment of social groups or, as in the case of Azerbaijan, where ALMPs facilitated a shift of informal work to formal work.  They also tend to be more effective with people at a medium distance from the labour market rather than high distance where more comprehensive and long-term support is needed.

Background

The ETF’s research papers put forward several potential policy recommendations for consideration by ETF Partner Countries for the review of their employment and skills development policies and service delivery to better deal with the labour market disruption caused by the COVID-19 pandemic and address the challenges and opportunities of green and digital recovery, including the need to strike a balance between short term firefighting type of measures and long term strategic measures.The ETF will organise a cross-country event at the end of October to explore in greater depth the issues which have emerged from the research.

The ETF is also undertaking a regional analysis on the impact of migration on human capital development which impacts on the development of ALMPS.

More information is available on the ETF's OpenSpace here