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Search requirements for the older unemployed
affect their re-employment rates and their flows into states of
inactivity
Many OECD countries have, or have had, a
policy that exempts older unemployed people from the requirement to search
for a job. An aging population and low participation by older workers in the
labor market increasingly put public finances under strain, and spur calls
for policy measures that activate labor force participation by older
workers. Introducing job search requirements for older unemployed workers
aims to increase their re-employment rates. Abolishing the exemption from
job search requirements for the older unemployed has been shown to initiate
higher outflow rates from unemployment for them.
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Comprehensive programs that focus on skills can
reduce unemployment and upgrade skills in OECD countries
Reducing youth unemployment and generating more
and better youth employment opportunities are key policy challenges
worldwide. Active labor market programs for disadvantaged youth may be an
effective tool in such cases, but the results have often been disappointing
in Organisation for Economic Co-operation and Development (OECD) countries.
The key to a successful youth intervention program is comprehensiveness,
comprising multiple targeted components, including job-search assistance,
counseling, training, and placement services. Such programs can be
expensive, however, which underscores the need to focus on education policy
and earlier interventions in the education system.
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Can job search requirements and job search
assistance help the unemployed find better jobs faster?
In many countries, reducing unemployment is
among the most important policy goals. In this context, monitoring job
search by the unemployed and providing job search assistance can play a
crucial role. However, more and more stringent monitoring and sanctions are
not a panacea. Policymakers must consider possible downsides, such as
unemployed people accepting less stable and lower-paying jobs. Tying
“moderate” monitoring to job search assistance may be the essential
ingredient to make this approach successful.
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Job search monitoring and benefit sanctions
generally reduce unemployment duration and boost entry to employment in the
short term
Unemployment benefits reduce incentives to search
for a job. Policymakers have responded to this behavior by setting minimum
job search requirements, by monitoring to check that unemployment benefit
recipients are engaged in the appropriate level of job search activity, and
by imposing sanctions for infractions. Empirical studies consistently show
that job search monitoring and benefit sanctions reduce unemployment
duration and increase job entry in the short term. However, there is some
evidence that longer-term effects of benefit sanctions may be negative.
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While most effects are positive, they tend to be
modest and fade over time—in addition, some mentoring programs can
backfire
Mentoring programs such as Big Brothers Big
Sisters of America have been providing positive role models and building
social skills for more than a century. However, most formal mentoring
programs are relatively novel and researchers have only recently begun to
rigorously evaluate their impact on changing at-risk youth’s perspectives
and providing opportunities for them to achieve better life outcomes. While
a variety of mentoring and counseling programs have emerged around the world
in recent years, knowledge of their effectiveness remains incomplete.
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Evidence for making a cheap and effective twist
to labor market policies for unemployed workers
Organisation for Economic Co-operation and
Development countries spend, on average, an equivalent of 0.4% of their
gross domestic product on active and passive labor market policies. This is
a non-negligible sum, especially in times of strained government budgets.
Meetings with case workers—who can provide advice and information on what
jobs to look for, and how to search, and give moral support, as well as
monitor search intensity—are a simple and effective option for policymakers
to help the unemployed find work.
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Outsourcing to the private sector can only be effective if the service quality can be contracted on
Expenditures on job placement and related services make up a substantial share of many countries’ gross domestic products. Contracting out to private providers is often proposed as a cost-efficient alternative to the state provision of placement services. However, the responsible state agency has to be able and willing to design and monitor sufficiently complete contracts to ensure that the private contractors deliver the desired service quality. None of the empirical evidence indicates that contracting-out is necessarily more effective or more cost-efficient than public employment services.
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