Impact assessment of the active labour market measures in North Macedonia

Nikoloski, Dimitar (2021) Impact assessment of the active labour market measures in North Macedonia. Project Report. Regional Cooperation Council, Sarajevo.

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Active labour market measures (ALMMs) aim at bringing unemployed back to work by improving the functioning of the labour market. The active labour market policies have multiple purposes such as: increasing output and welfare by putting unemployed to work, maintain the size of the effective labour force by counteracting high unemployment, help reallocate labour between different segments by improving employability of the labour force, alleviate the moral-hazard problem of unemployment insurance etc. The majority of these measures are general-purpose, i.e. serve relatively broad target population. However, often programs are designed for specific groups in the labour market considered as more vulnerable segments. The current Covid-19 crisis offer unique opportunities for innovation and reset of social objectives and to experiment with different ALMMs. The importance of active labour market policies for North Macedonia can be viewed from two different perspectives. First, the role of the active labour market policies receives greater weight when skill obsolescence is higher i.e. when the long-term unemployment prevails over the short-term unemployment. Second, the aspiration of the country in the foreseeable future to start negotiations for EU accession imposes ambitious objectives in terms of attaining international labour market competitiveness. With this in mind, we can argue that investment in human capital becomes increasingly valuable and implies a need for reforms of active labour market policies. Persistently high unemployment in many countries, tight government budgets and the existing scepticism regarding the effects of active labour market policies are the reason for growing interest in evaluating these measures (Hujer and Caliendo, 2000). The main challenge in carrying out effective impact evaluation is to identify the causal relationship between the program and the outcomes of interest. With respect to this, there exist contrasting positions on the effectiveness of active labour market programs. On one hand, proponents of these programs argue that they are both necessary and useful for reducing unemployment. On the other hand, the opponents demonstrate that active labour market programs are provided at high opportunity costs to other social programs and labour market efficiency as a whole (Dar and Tzannatos, 1999; Kluve, 2006; Escudero, 2018). The aim of this report is to present the results from the impact evaluation of the selected active labour market policies and measures implemented in North Macedonia during the period 2018-2019. In addition, we perform a cost effectiveness analysis in order to assess in monetary terms the short-term outcomes from the ALMMs. The impact evaluation is a part of a general agenda of evidence-based policy making that focuses on redesigning the existing policies in order to achieve the best possible outcomes. In this context, the worldwide experience shows that the effectiveness of ALMMs is considerably improved if impact evaluations are rigorous and the feedback results are channeled into program design. Particularly, the analysis is based on using the EU and ILO standards and the best practices from developed and other former transition countries.

Item Type: Monograph (Project Report)
Subjects: Scientific Fields (Frascati) > Social Sciences > Economics and Business
Divisions: Faculty of Economics
Depositing User: Efp Eprints
Date Deposited: 20 Sep 2022 07:58
Last Modified: 20 Sep 2022 07:58

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