Tuesday, 28 October 2014

Evaluating Active Labour Market Policies in Portugal, OECD references Martins and Pessoa e Costa (2014) CGR working paper.


In the recently published Economic Survey of Portugal, the OECD has referenced Centre for Globalisation Research's Working Paper: “Reemployment effects from increased activation: Evidence from times of crisis”, by Pedro Martins, Professor of Applied Economics at Queen Mary School of Business and Management, and CGR research associate Sofia Pessoa e Costa. The paper provides evidence on the effects on Active Labour Market Policies (ALMPs) in times of recession through the analysis of a large activation programme introduced in Portugal in 2012, founding that doubled the monthly reemployment probability. The OECD used the evidence to highlight the need to strength ALMPs in order to improve Portuguese labour market performance, as detailed in the following paragraph: 
“Scaling up active labour market policies (ALMPs) can also improve labour market performance of the people with difficulties in the labour market, particularly the unemployed and youths. Recently adopted enhancements of ALMPs include short training courses, financial support for internships, a hiring subsidy paid to companies that provide training and the temporary reimbursement of social security contributions for hiring unemployed individuals below 30 or above 45 years. Going forward, career counsellors in job centres could take a more active role in managing referrals to specific ALMP programmes. This would both promote the enrolment of job seekers who would benefit the most from these programmes, and ease capacity constraints. Efforts in this direction have already started and empirical results suggest a significant positive impact on re-employment (Martins and Pessoa e Costa, 2014). Monitoring and sanctions, while very strict in principle, are in practice far less stringent, as proof of job search is often perfunctory and benefit cancellation seldom enforced. Welcome progress has been made in the evaluation of programmes to help the unemployed, and these efforts should be further strengthened and used to channel scarce resources into the most effective programmes.”
For further information read:
  • OECD Economic Survey of Portugal 2014:   
Executive Summary
  • Martins and Pessoa e Costa (2014) working paper:

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