Download Mr. Alexandre KOLEV, Organisation for Economic Co

Activation Policies for the Poor: Lessons
from OECD Countries
5th Meeting of the COMCEC Poverty Alleviation Working
Group
February 26th, 2015, Ankara, Turkey
Alexandre Kolev
OECD Development Centre
What is Activation?
No agreed definition of the concept but increasingly used by the OECD to
refer to a combination of policy tools that provide support and incentives
for:
 Job search and job finding
 Productive participation in society
 Self-sufficiency and independence from public support
Activation measures often include policies that target recipients of public
support and encourage them to find work (‘welfare to work’)
But also include measures that strengthen the employability and earnings
capacities of low-income families (like CCTs)
Entail a mix of rights and responsibilities: while the possibility of benefit
sanction is an important design element, the objective shall not be to curtail
benefit provision but improve LM attachment and earnings prospects
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Activation Measure in G20 countries
Activation has a long tradition in the OECD area
• Early activation measures focused on the unemployed
(ALMPs) and were implemented in a context of relatively
strong overall LM performance
• More recent ALMPs implemented in the context of the job
crisis and rising unemployment
• Activation measures recently extended to other working-age
welfare recipients (disability and sole-parent benefits)
Activation principles have been applied more broadly to a range of
different population groups in emerging and developing countries
• CCTs in Latin America
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Impact of Activation: What is the Evidence Base?
Growing evidence on the impact of CCTs
• Usually positive effects on education and health behaviour
There is also some evidence on the macroeconomic impact of
ALMPs, again with a focus on employment/unemployment
• Results show that ALMP spending and activation can help cut
unemployment even in period of economic downturn
Large literature on the microeconomic impact of ALMPs.
• Most of these evaluations studies have looked at short-term
employment effects
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Impact of ALMPs – by Types
Intervention
Summary of impact
Comments
Employment services
Generally positive, with low costs, in
developed and transition countries
Best when economy good
Little evidence for developing
countries
Training for unemployed
Positive impacts on employment
(but not earnings) in developed
countries
Positive on both in transition
countries
Links to workplace helps
Women benefit more than men
Benefits appear to increase
over time
Training for mass layoffs
Usually no positive impacts (though
some exceptions)
Little evidence for transition
and developing countries
Training for youth
Little impacts in developed
countries
Positive impacts in Latin America
Earlier interventions more
effective
Success requires
comprehensive and costly
packages of services
Impact of ALMPs – by Types
Intervention
Summary of impact
Comments
Wage/employment
subsidies
Overall negative effects in
developed and transition countries
Recent welfare-to-work programs in
North America have positive
impacts
Little evidence for developing
countries
Results more effective when
combined with training
High deadweight and
substitution effects
Public works
Overall negative effects in
developed and transition countries
on long-term employment
Can be effective as short-term
safety net
Little evidence for developing
countries
Important risks of
displacement
Self-employment
assistance
Few evaluations of employment
impacts
Very low take-up
Can have positive effects for
older, well educated
Technical services help
Impact of Activation: What is the Evidence Base?
Some new lessons from OECD activation policy reviews
•
Results show that effective activation strategies can help get UI recipients off
benefit and into work - even when labour demand is depressed - and work best
for those benefit recipients who are close to the LM (typically the UI benefit
recipients)
•
The role of caseworkers and physical meetings seems to matter for successful
action – limits of e-services
•
Initial results show activation can work for lone parents with young children so
long as recipients can get support for child care, while mixed results for longterm sickness/disability benefits
•
Extending welfare to work programmes for recipients of UA, disability/long-term
sickness and lone parents benefits, and for older workers is more challenging
•
A matter of concern is that many benefits recipients are activated to take lowwage jobs which may not lift them out of poverty -> this is why OECD countries
have increasingly introduced make-work pay policies – accentuate financial
work incentives while maintaining adequate support for low paid workers
through in-work benefits or tax credits
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Selected References
OECD (2013) G20 Task Force on Employment: Activation Strategies
for Stronger and More Inclusive Labour Markets in G20
countries: Keu policy Challenges and Good Practices
OECD Employment Outlooks
Martin, J. (2014): Activation and ALMPs in OECD Countries:
Stylized Facts and Evidence on their Effectiveness. IZA Policy
Paper N°84
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Thank You!
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