Statistics Explained

Archive:Labour market policy interventions

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Data from September 2011, most recent data: Further Eurostat information, Main tables and Database.

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 European Union (EU) Member States the primary target group is people who are registered as unemployed by national public employment services.

However, 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 receiving some other form of social benefit and are believed to be capable of working given the right support and opportunities. 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

Figure 1: Public expenditure on labour market policy interventions, 2009
(% of GDP) - Source: Eurostat (lmp_expsumm)
Figure 2: Public expenditure on labour market policy measures, EU-27, 2009 (1) (% of total) - Source: Eurostat (tps00077)
Table 1: Labour market policy measures, participants by type of action, 2009
(annual average stock in 1
000) - Source: Eurostat (lmp_partsumm)

Across the EU-27, a total of 2.2 % of gross domestic product (GDP) was spent on LMP interventions in 2009. That was around 0.6 percentage points more (of GDP) than a year before in 2008, as total expenditure on LMP interventions increased by 35.4 %. The majority of this increase was derived from higher levels of expenditure on unemployment benefits as governments supported the large numbers of people that lost their jobs as a direct result of the financial and economic crisis. Indeed, the share of LMP expenditure accounted for by LMP supports rose to 64.1 % compared with 59.7 % the year before, with the share spent on LMP measures down to 25.3 % from 28.8 % and that on LMP services rather unchanged at 11 %.

The level of expenditure and the breakdown of both expenditure and participants between the different types of LMP intervention varied considerably between Member States, reflecting the diverse characteristics and problems within national labour markets, as well as the different political convictions of their respective governments.

Within the EU Member States, the highest level of relative expenditure on LMP interventions in 2009 was reported in Belgium (3.8 % of GDP), followed by Spain, Ireland and Denmark, which were the only other countries to spend more than 3.0 % of their GDP on such interventions (see Figure 1). At the other end of the scale, nine Member States spent less than 1 % of GDP on these interventions: Romania, Malta, Bulgaria, the United Kingdom, the Czech Republic, Cyprus, Slovakia, Greece and Lithuania. Relative to GDP, Spain spent the most on LMP supports (3.0 %) with Belgium and Ireland the only other countries to spend more than 2 %. Belgium, Denmark and Poland spent most on LMP measures (around 1.2 %) while Sweden and the Netherlands reported the highest relative expenditure on LMP services – around 0.4 % of GDP.

LMP measures (see Figure 2) 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. Total public expenditure on LMP measures across the EU-27 in 2009 was equivalent to 0.6 % of GDP. The largest part of this expenditure went on training (42.6 %), just less than a quarter (23.8 %) on employment incentives, while 14.4 % was accounted for by supported employment and rehabilitation (measures that promote labour market integration of people with reduced working capacity) and 12.1 % by direct job creation (which covers the provision of temporary jobs that are additional to normal market supply).

Across the EU-27 there was an average of 10.5 million people participating in LMP measures at any point during 2009, only slightly more than in 2008 (10.3 million). Of these, around 4.3 million received employment incentives, which mostly involve the use of public funds to provide a fixed-term subsidy to employers who take on people from selected target groups, either into a regular job or into a specially arranged placement for work experience. A further 3.2 million people were engaged in some form of labour market training (see Table 1).

Data sources and availability

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.

Three 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 usually does not 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

LMP interventions provide assistance to the unemployed and other groups facing difficulties entering the labour market. The LMP data collection was developed by the European Commission (EC) 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 employment guidelines as set out under the Lisbon strategy.

Within the new Europe 2020 strategy, the flexicurity approach aims to result in the provision and implementation of active LMPs while ensuring adequate benefits for those out of work.

This concept of flexicurity came to the forefront of the EU’s employment agenda in 2007 when the European Commission released a Communication titled ‘Towards common principles of flexicurity – more and better jobs through flexibility and security’ (COM(2007) 359), which highlighted the idea of reconciling flexibility in the labour market with security for workers. Within this modern flexicurity approach, security refers not only to security of income (for example, through the provision of adequate unemployment benefits) but also to securing people’s capacity to work by ensuring lifelong access to opportunities to develop and adapt their skills to meet new demands in the labour market. Hence, the Europe 2020 strategy specifically refers to the provision of active LMPs, which cover LMP measures and LMP services, and modern social security systems, which include LMP supports. These policies for the EU labour market are, therefore, key instruments within the Europe 2020 strategy and a series of indicators based upon LMP data continue to be used for monitoring progress.

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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