Demand-Side Active Labor Market Policies
RCTClinical Trial
Traditional active labor market policies focus almost exclusively on jobseeker search assistance and training, which yields limited aggregate employment gains during economic downturns due to severe crowding-out effects.
Picture this
Imagine a food bank that usually teaches hungry people how to write better grocery lists. Pivoting to demand-side assistance means going directly into local restaurant kitchens and grocery stores to help owners streamline kitchen operations and hire extra help.
What the evidence says
Treatment increased permanent contract vacancy postings with the public employment agency by 24% (+0.047 vacancies per firm, p < 0.01) and total vacancy postings by 14% (+0.071 vacancies, p < 0.05).
- Who was studied
- N = 7,438 small and medium-sized enterprise establishments across 129 local employment agencies in France.
- How
- Stratified Randomized Controlled Trial evaluating a 6.5-month public employment service firm outreach campaign.
What to do
Reallocate public labor market intervention budgets to offer direct, free recruitment support to employers during periods of economic slack.
From the source
"In this paper, we explore the effectiveness and potential limitations of a symmetric intervention that assists firms in their recruitment operations in a slack labor market."
Are_Active_Labor_Market_Policies_Directed_at_Firms_Effective_Evidence.pdf