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Retraining and Activating the Distant Unemployed (paper) Paper to IWPLMS Conference Dublin September 2013

Retraining and Activating the Distant Unemployed (paper)

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Author

Micheál Collins

Summary

Across Europe the socio-economic impact of the recent recession has left no greater scar than on the labour market and in particular on the large numbers who have found themselves long-term unemployed. Over that period Ireland rapidly moved from full-employment (4%) to high unemployment (almost 14%), with the majority of job seekers being long-term unemployed.

This paper focuses on the subgroup of the unemployed who are most distant from the active labour market. Using data from the Central Statistics Office and the Department of Social Protection it profiles these ‘distant unemployed’ and examines the challenges of retraining and activating this group.

Given current high unemployment levels, the paper highlights a danger of solely adopting output measures of active labour market policies (ALMPs) which measure throughput and placements/ employment/ activation only and calculate economic efficiency measures based on short-term expenditure and outcomes. Such schemes, while highly relevant, would by themselves bias the policy response to the unemployment crisis towards the easiest to activate, of whom there are many with up-to-date skills and abilities, who are unemployed due to domestic demand problems rather than skill deficits or structural issues. The losers in such a policy would be those most distant from the active labour market, who may need longer and more personal intervention to facilitate their return to the active labour force; cases where throughput and outputs will be smaller and more difficult. As such, the paper argues, an inappropriately framed policy would activate the easiest to activate and defer the hard work to the future at a cost of trapping many in successive years of long term unemployment and welfare dependency.

Finally, the paper examines Ireland’s current programme of labour market intervention and activation for the distant unemployed – Community Employment. Based on administrative data it profiles this scheme and its performance. Drawing on this analysis, it proposes a restructuring of that programme, into two streams, that would retain the longstanding dual role of Community Employment: helping the long-term unemployed return to the active labour market and the provision of local services. The paper outlines why such an approach would offer a more sustainable structure for this labour market intervention and ensure than it continues to target those furthest from the active labour market.

THIS PAPER WAS PRESENTED TO A MEETING OF THE INTERNATIONAL WORKING GROUP ON LABOUR MARKET SEGMENTATION, DUBLIN SEPTEMBER 2013

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