Statistics Explained

Archive:Labour market policy interventions

Revision as of 20:09, 6 December 2012 by EXT-S-Allen (talk | contribs)
Data from September 2012. Most recent data: Further Eurostat information, Main tables and Database.
Figure 1: Public expenditure on labour market policy interventions, 2010
(% of GDP) - Source: Eurostat (lmp_expsumm)
Figure 2: Public expenditure on labour market policy measures, EU-27, 2010 (1)
(% of total) - Source: Eurostat (tps00077)
Table 1: Labour market policy measures, participants by type of action, 2010 (1)
(annual average stock in 1 000) - Source: Eurostat (lmp_partsumm)

Labour market policy (LMP) interventions are generally targeted at providing assistance to the unemployed and other groups of people who face particular difficulties to enter the labour market. In most EU Member States the primary target group is people who are registered as unemployed by national public employment services or who are currently employed but at risk of involuntary job loss due to difficult economic circumstances for their employer – a situation that is particularly relevant during the current inconsistent recovery from the financial and economic crisis.

Policy objectives aimed at increasing participation in the labour market are increasingly focused on a broader range of persons who are not formally unemployed but are often facing disadvantages and barriers that may prevent them from joining or re-joining the labour force, for example: parents (in particular women) re-entering work after a family break, young people looking for their first job, older workers and disabled workers. Therefore, people currently considered as economically inactive but who would like to enter the labour market are also treated as an important LMP target group. As a result, the types of intervention used, and the groups that are targeted, vary between Member States depending on national circumstances and priorities.

Main statistical findings

Across the EU-27, an average of 2.2 % of gross domestic product (GDP) was spent on LMP interventions in 2010; these latest figures for the EU average include 2009 data for Greece and the United Kingdom. The relative weight of LMP expenditure in GDP rose between 2008 and 2009 in response to the increased number of unemployed persons across the EU-27; this increase in spending could be largely attributed to the effects of the financial and economic crisis on European labour markets and a rise in the level of expenditure for unemployment benefits. Between 2009 and 2010 the increased level of LMP expenditure was maintained but not extended, despite the number of unemployed persons increasing by a further 7.7 % between 2009 and 2010.

Within the EU Member States, the highest relative level of expenditure on LMP interventions in 2010 was reported in Ireland and Spain (both 3.9 % of GDP), followed by Belgium and Denmark – the only other EU Member States to spend more than 3.0 % of their GDP on such interventions. At the other end of the scale, nine Member States spent less than 1 % of GDP on these interventions: Slovakia, Greece (2009 data), Cyprus, Lithuania, the Czech Republic, the United Kingdom (2009 data), Romania, Bulgaria and Malta. Relative to GDP, Spain spent the most on LMP supports (3.1 %) with Belgium and Ireland the only other countries to spend more than 2 %. Denmark and Belgium had the highest relative expenditure on LMP measures (1.4 % and 1.3 % of GDP respectively), while Sweden (0.5 % of GDP), the Netherlands, Denmark and Germany (all 0.4 % of GDP) reported the highest relative expenditure on LMP services.

The vast majority (62.9 %) of expenditure on LMP interventions in 2010 across the EU (including 2009 data for Greece and the United Kingdom) financed LMP supports, while just over a quarter (25.7 %) of the total expenditure on LMP interventions was devoted to LMP measures and the remaining one ninth (11.4 %) was spent on LMP services. The level of expenditure and the breakdown of both expenditure and participants between the different types of LMP intervention varied considerably between EU Member States, reflecting the diverse characteristics and problems within national labour markets, as well as the different policies of respective governments.

LMP measures mostly support the transition from unemployment or inactivity into employment, either: by improving employability through training or work experience; by providing incentives for employers to take on people from selected target groups; or by encouraging individuals to become self-employed. Public expenditure on LMP measures was equivalent to 0.6 % of GDP across the EU in 2010 (again including data for Greece and the United Kingdom for 2009). The largest part of this expenditure (see Figure 2) went on training (39.1 %), just over a quarter (25.1 %) on employment incentives, while 14.2 % was accounted for by supported employment and rehabilitation (measures that promote the labour market integration of people with reduced working capacity) and 13.4 % by direct job creation (which covers the provision of temporary jobs that are additional to normal market supply).

Across the EU (again including data for Greece and the United Kingdom for 2009) there was an average of 10.7 million people participating in LMP measures at any point in time during 2010 (see Table 1), slightly fewer than in 2009 (11.1 million). On average, almost three million persons in Spain participated in LMP measures at any time during 2010; this was considerably higher than in any of the other EU Member States, as France (1.6 million) and Germany (1.5 million) had the next highest levels. Meanwhile, the average number of people in the EU benefitting from LMP supports at any point in the year fell slightly from 18.2 million in 2009 to 17.7 million in 2010 but remained well above the number of people who were assisted in 2008 (an average of 13.3 million). Germany and Spain were the only EU Member States to report that in excess of three million persons were benefitting from LMP supports in 2010, while the level in France (2.7 million) was slightly lower – but considerably above that recorded in Italy and the United Kingdom (1.5 million each).

Data sources and availability

Data source

All data presented in this article were extracted from the Eurostat LMP database. These data are collected annually from administrative sources in each country.

Scope of LMP statistics

LMP statistics cover all labour market interventions which can be described as ’public interventions in the labour market aimed at reaching its efficient functioning and correcting disequilibria and which can be distinguished from other general employment policy interventions in that they act selectively to favour particular groups in the labour market’. The scope of LMP statistics is limited to public interventions that explicitly target groups with difficulties in the labour market; this includes: the unemployed; those employed but at risk of involuntary job loss; and people who are currently inactive in the labour market but would like to work.

Types of interventions

LMP interventions are classified into three main types:

  • LMP services refer to labour market interventions where the main activity of participants is job-search related and where participation does not usually result in a change in labour market status.
  • LMP measures refer to labour market interventions where the main activity of participants is not job-search related and where participation usually results in a change of labour market status. In other words, a person who is unemployed typically ceases to be considered as such when participating in an LMP measure because they are temporarily in training or work and therefore not both actively seeking and immediately available for work. An activity that does not result in a change of labour market status may still be considered as a measure if the intervention fulfils the following criteria:
  1. the activities undertaken are not job-search related, are supervised and constitute a full-time or significant part-time activity of participants during a significant period of time, and;
  2. the aim is to improve the vocational qualifications of participants, or;
  3. the intervention provides incentives to take-up or to provide employment (including self-employment).
  • LMP supports refer to interventions that provide financial assistance, directly or indirectly, to individuals for labour market reasons, or which compensate individuals for disadvantage caused by labour market circumstances.

Additional category breakdowns

The three main types of intervention are further broken down into nine detailed categories according to the type of action:

  • LMP services
1. Labour market services;
  • LMP measures
2. Training;
3. Job rotation and job sharing;
4. Employment incentives;
5. Supported employment and rehabilitation;
6. Direct job creation;
7. Start-up incentives;
  • LMP supports
8. Out-of-work income maintenance and support;
9. Early retirement.

The LMP methodology provides guidelines for the collection of data on LMP interventions: which interventions to cover; how to classify interventions by type of action; how to measure the expenditure associated with each intervention; and how to measure the number of participants in each intervention using observations of stocks and flows (entrants and exits).

Context

The LMP data collection was developed by the European Commission as an instrument to monitor the implementation and development of targeted employment policies across the EU in response to two agreements of the European Council in 1997. The first, held in Amsterdam in June 1997, confirmed that whilst employment policy should be a national responsibility, it was also an issue of common concern and that there should be a coordinated strategy at a European level. The second, held in November 1997 in Luxembourg – the so-called ’Jobs Summit’ – launched the European Employment Strategy (EES) in which LMPs had a key role in relation to employability. Since that time, LMP statistics have been used to monitor both active and passive interventions in the labour market and, in particular, relevant areas of the EU Employment Guidelines.

More recently, LMP statistics have been used as one of the sources of data for monitoring the EU Employment Guidelines through the Europe 2020 Joint Assessment Framework (JAF). The JAF is an indicator-based assessment system developed and used by the European Commission and the Employment Committee. Organised into 12 policy areas, the JAF includes a series of indicators used to monitor the progress towards EU headline targets and associated national targets in relation to the implementation of the Employment Guidelines. Data from Eurostat’s LMP database are used to calculate indicators for policy area 3 related to active labour market policies and for policy area 4 related to adequate and employment oriented social security systems.

Further Eurostat information

Publications

Main tables

Labour market policy
Main tables
Labour market policy (t_lmp)
Public expenditure on labour market policies, by type of action (tps00076)
Public expenditure on labour market policy measures, by type of action (tps00077)
Public expenditure on labour market policy supports, by type of action (tps00078)
Participants in labour market policy measures, by type of action (tps00079)
Beneficiaries of labour market policy supports, by type of action (tps00080)
Persons registered with Public Employment Services (tps00081)

Database

Labour market policy
Database
Labour market policy (lmp)
Public expenditure on labour market policy (LMP) interventions (lmp_expend)
Participants in labour market policy (LMP) interventions (lmp_particip)
LMP based indicators for monitoring the Employment Guidelines (lmp_indic)
Persons registered with Public Employment Services (PES) (lmp_rjru)

Methodology/Metadata

Source data for tables and figures (MS Excel)

Other information

External links

See also

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