Policy Factsheet

Active Labor Market Policies (ALMPs)

Reasons for Policy

  • ALMPs are designed to combat widespread unemployment by helping the unemployed find work.1
  • Moving people into regular employment can bring families out of poverty and off of government assistance.2
  • The heaviest burden of the current recession is falling on African Americans and Hispanics, who are contending with much higher unemployment rates than whites nationally--about one-and-a-half times as high for Hispanics and twice as high for blacks.3
  • Equal access to work skill development and job search assistance can help reduce this growing disparity.4

Community Groups

  • Businesses
  • Community-based Organizations
  • Community Colleges
  • Local Government
  • State Government

Policy Components

  • Labor market employment training
  • Subsidized public sector employment programs/direct job creation
  • Job search assistance
  • Classroom and on-the-job training
  • Wage subsidies to the private sector

Desired Outcomes

  • Increase employability of the unemployed
  • Transition unemployed off of government assistance
  • Enhance labor supply
  • Increase labor demand
  • Reduce unemployment disparities in racial/ethnic minorities

Level of Evidence Available to Evaluate Effectiveness of Policy

For all policies we describe on this website, we have applied the Standards of Evidence as defined by Flay et al. (2005) in the Standards of Evidence document published by Prevention Science.

The effectiveness level of this policy is 2: Policies with Consistent Evidence from High-Quality Observational Studies.

The levels of effectiveness as noted are:

  1. meets criteria for policy effectiveness (consistent, positive outcomes from at least two high-quality experimental or quasi-experimental trials using a comparison group or interrupted time series design);
  2. consistent evidence available linking policy with positive outcomes from high-quality observational studies only;
  3. insufficient evidence available for policy or policy components.

Achievable Results

The following summary of achievable results is based on a published review of the scientific evidence.

On average, Subsidized Public Sector Employment Programs:

  • Have little impact6

On average, Job Search Assistance Programs can achieve:

  • Relatively favorable, but small, short-term impacts6

On average, Classroom and on-the-job training programs can achieve:

  • Favorable, but small, outcomes two-years post-program6

Community Examples

Massachusetts Community Colleges in conjunction with state businesses provide workforce training.

Sonoma County,California, Sonoma County Workforce Investment Board in conjunction with Sonoma County Human Services Department develops a local workforce plan and promotes workforce development and training.

Links to Policy Examples

Annotated Laws of Massachusetts, ALM GL Ch. 15A, §15F Community College Workforce Training Incentive Program

County of Sonoma, California, Workforce Investment Board given authority pursuant to the Workforce Investment Act of 1998; Governor’s Executive Order D-9-99; County of Sonoma Board of Supervisors Resolution 98-1409, 99-1621.

29 U.S.C.A §2832 Local workforce investment boards

Be sure to check with your state, county, and municipal governments regarding potential existing laws that may impede any new policy development.

Local governments and organizations may check existing state and federal statutes and administrative codes for the authority to implement local policies.

References

1 Kluve, J (2000). The effectiveness of the European Active Labor Market Policy. Institute for the Study of Labor. IZA Discussion Paper No. 2018. Available at: <a href=http://ideas.repec.org/p/iza/izadps/dp2018.html>Discussion Paper No. 2018</a>

2 Robinson, P (2000). Active labour-market policies: A case of evidence-based policy-making? Oxford Review of Economic Policy, 16, 13-26.

3 Austin, A (2009). Unequal unemployment: Racial disparities in unemployment vary widely by state. Economic Policy Institute: Research and Ideas for Shared Propserity <a href=http://www.epi.org/publications/entry/ib257/.Unequal unemployment</a>

4 Moira, N (2006). Unionized workers and support for active labor market policies. Fifteenth International Conference of the Council for European Studies. Chicago, March 29- April 2, 2006.

5 Flay, BR, Biglan, A, Boruch, RF, Ganzalez Castro, F, Gottfredson, D, Kellam, S, Moscicki, EK, Schinke, S, Valentine, JC, & Ji, P (2005). Standards of evidence: Criteria for efficacy, effectiveness and dissemination. Prevention Science, 6(3), 151-175.

6 Card, D, Kluve, J, Weber, A (2009). Active labor market policy evaluations: A meta-analysis. CESIFO Working Paper Series No. 2570; Ruhr Economic Paper No. 86. Available at SSRN: <a href=http://ssrn.com/abstract=13565234.>Active labor market policy evaluations</a>