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Data from September 2010, most recent data: Further Eurostat information, Main tables and Database.
Public expenditure on labour market policy interventions, 2007 (% of GDP).PNG

Labour market policy (LMP) interventions are generally targeted at providing assistance to the unemployed and other groups of people with particular difficulties to enter the labour market. In most European Union (EU) countries the primary target groups are people registered as unemployed by national public employment services. However, policy objectives aimed at increasing participation in the labour market are increasingly focused on broader groups who are not formally unemployed but are often receiving some other form of social benefit and are 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 countries depending on national circumstances and priorities. 

Main statistical findings

Labour market policy measures, participants by type of action, 2007 (annual average stock in 1 000).PNG
Public expenditure on labour market policy measures, EU-27, 2007 (1) (% of total).PNG

Across the EU, a total of 1.6 % of GDP was spent on labour market policy interventions in 2008 with almost 60 % of the expenditure going on LMP supports, 28 % on LMP measures and 12 % on LMP services. However, the level of expenditure and the breakdown of both expenditure and participants between the different types of LMP intervention vary 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, the highest level of relative expenditure on labour market policy interventions in 2008 was reported in Belgium (over 3.3 % of gross domestic product (GDP)), followed by Spain, Denmark, the Netherlands, Finland and Ireland, which all spent between 2 and 2.5 % of GDP. At the other end of the scale, eight countries spent less than 0.5 % of GDP: Cyprus, Latvia, Bulgaria, Slovenia, the Czech Republic, Lithuania, Estonia and Romania. Belgium spent the most on both LMP measures and LMP supports, being the only country to spend more than 1 % and more than 2 % of GDP respectively, but the Netherlands reported the highest relative expenditure on LMP services at just over 0.3 % GDP.

LMP measures mostly support the transition from unemployment or inactivity into employment either by improving employability through training or work experience, or by providing incentives for employers to take on people from selected target groups or for individuals to become self-employed. Of the total spent on LMP measures across the EU in 2008 (0.45 % of EU-GDP), the largest share went on training (39.0 %), just less than a quarter (24.0 %) on employment incentives, 16.1 % on supported employment and rehabilitation (measures that promote the labour market integration of people with reduced working capacity) and 13.4 % on direct job creation, which covers the provision temporary jobs that are additional to normal market supply.

There was an average of 10.3 million people participating in LMP measures at any point during 2008. Of these, just under 4 million were benefitting from 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.

Data sources and availability

The LMP methodology provides guidelines for the collection of data on labour market policy 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 numbers of participants in each intervention using observations of stocks and flows (entrants and exits).

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 of 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.

Context

Labour market policy (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 as an instrument to monitor the implementation and evolution 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, confirmed that whilst employment policy should be a national responsibility, it was also an issue of common concern and that there should be a co-ordinated strategy at European level. The second, held in November in Luxembourg – the so-called 'Jobs Summit' – launched the European Employment Strategy (EES) in which active labour market policies had a key role in the pillar related to employability. Since that time, LMP statistics have been used to monitor both active and passive interventions in the labour market and, in particular, the relevant areas of the Employment Guidelines as set out under the Lisbon strategy.

Within the new Europe 2020 strategy, implementing strong active labour market policies and ensuring adequate benefits for those out of work are key elements of the flexicurity approach towards the priority of inclusive growth. The concept of flexicurity came to the forefront of the EU employment agenda in 2007 (see COM (2007)359): Towards Common Principles of Flexicurity – More and better jobs through flexibility and security) and refers to the idea of reconciling flexibility in the labour market with security for the workers. In the modern flexicurity approach, security refers not only to security of income (for example through the provision of adequate unemployment benefits) but also to securing peoples’ capacity to work by ensuring life-long access to opportunities to develop and adapt their skills to meet new demands in the labour market. Hence, the EU 2020 strategy specifically refers to the provision of effective active labour market policies, which covers LMP measures and LMP services, and modern social security systems, which includes LMP supports. Labour market policies are, therefore, key instruments within the latest strategy and a series of indicators based on 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)
Persons registered with Public Employment Services (PES) (lmp_rjru)

Other information


Source data for tables and graphs (MS Excel)


External links

See also

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