Active labor market programs for the integration of youths and immigrants into the labor market: the Nordic experience

Abstract

The purpose of this study is to survey the evaluation literature on active labor market programs (ALMPs) in the Nordic labor market in order to provide a general overview of the success and failure of different types of ALMPs as well as a more detailed account of the Nordic experience with targeted programs towards vulnerable groups such as unemployed youth and immigrants. The consensus in the evaluation literature is that the types of ALMPs that are efficient in reducing unemployment duration and increasing employment chances for the unemployed in general are also the most efficient for vulnerable groups. Programs that more closely approximate regular employment such as those provided by wage subsidized employment programs yield the most unequivocally positive results for subsequent employment outcomes. In addition, intensive contact and counseling with Public Employment Service (PES)caseworkers is found to be effective for vulnerable groups. Several studies suggest that the latter is a program effect per se and not due to threat effects for unemployed youth and immigrants, perhaps due to less negative perceptions concerning intensive contacts with the PES among vulnerable groups in comparison to other unemployed groups. Intensive contacts with the PES may also promote better matches between individual training needs and actual training programs as well as compensate for relatively less developed networks and employer contacts among unemployed youth and immigrants.