-driven shocks, rather than structural changes in the labor market (i.e. matching efficiency). Our paper addresses the issue by estimating labor market matching efficiency based on a search-matching theory for 25 EU countries and offers a cross-country perspective on the development of job market matching efficiency in Europe.
6. Our analysis also finds that training and start-upincentives are negatively associated with the incidence of LTU . These are consistent with the literature on the effects of active labor market policies (ALMPs) on employment, which shows that
While unemployment rates in Europe declined after the global financial crisis until 2018/19, the incidence of long-term unemployment, the share of people who have been unemployed for more than one year to the total unemployed, remained high. Moreover, the COVID-19 pandemic could aggravate the long-term unemployment. This paper explores factors associated with long-term unemployment in European countries, using panel of 25 European countries over the period 2000–18. We find that skill mismatches, labor market matching efficiency, and labor market policies are associated with the incidence of long-term unemployment. Among different types of active labor market policies, training and start-up incentives are found to be effective in reducing long-term unemployment.
Active Labor Market Policies to Support the Recovery of the Spanish Labor Market 1
ALMP resources in Spain have been directed mostly to job creation programs and start-upincentives. While evaluation has been limited, the general perception is that past ALMPs have not been effective. In the new context of significant structural changes, more ALMP resources should be allocated to training and upskilling the labor force. It would also be desirable to strengthen the capacity of the public employment service and reduce the heterogeneity of provision of services
Ms. Elva Bova, João Tovar Jalles, and Ms. Christina Kolerus
This paper explores conditions and policies that could affect the matching between labor demand and supply. We identify shifts in the Beveridge curves for 12 OECD countries between 2000Q1 and 2013Q4 using three complementary methodologies and analyze the short-run determinants of these shifts by means of limited-dependent variable models. We find that labor force growth as well as employment protection legislation reduce the likelihood of an outward shift in the Beveridge curve,. Our findings also show that the matching process is more difficult the higher the share of employees with intermediate levels of education in the labor force and when long-term unemployment is more pronounced. Policies which could facilitate labor market matching include active labor market policies, such as incentives for start-up and job sharing programs. Passive labor market policies, such as unemployment benefits, as well as labor taxation render matching signficantly more difficult.
International Monetary Fund. Asia and Pacific Dept
Δu i,t denotes a change in the unemployment rate of country i at time t , and ΔALMP i,j,t denotes a change in the spending in percent of GDP on active labor market policy j In this exercise, we include three types of active labor market policies: training; employment incentives (e.g. recruitment incentives and employment maintenance incentives); and other policies, which include direct job creation, start-upincentives, and rehabilitation. 8 In the regression, the average of previous two years is used as active labor market policies typically impact