Author
Listed:
- Bruckmeier, Kerstin
(Institute for Employment Research (IAB), Nuremberg, Germany)
- Lehnert, Claudia
(Institute for Employment Research (IAB), Nuremberg, Germany)
- Stephan, Gesine
(Institute for Employment Research (IAB), Nuremberg, Germany ; FAU)
- Wolff, Joachim
(Institute for Employment Research (IAB), Nuremberg, Germany)
Abstract
"Active labor market policy - provided it is effective - is an investment in the employment opportunities of people affected or threatened by unemployment. Particularly in the context of basic income support, it can also achieve social policy objectives, such as enabling people who are very distant from the labor market to access the labor market at all. The aim of this article is to assess the potential of cost-benefit analyses of active labor market policy. It also discusses the informative value of such analyses, which is limited for various reasons. Numerous studies are available on the effects of active labor market policy on the labor market opportunities of those supported. At the individual level, the instruments of labor market policy generally prove to be efficient. However, not every measure that is effective must also be cost-effective (from a simplified fiscal perspective). When resources are scarce, decision-makers in politics and administration are therefore very interested in cost-benefit analyses of active labor market policy. In practice, however, cost-benefit analyses of active labor market policy are subject to various limitations. The costs and benefits of labor market policy instruments can arise at different levels and from different perspectives. The fiscal cost-benefit analysis evaluates the costs and benefits of labour market policy. There are already various methodological challenges when estimating direct fiscal effects. In addition to direct fiscal components, there may also be macro and welfare effects of employment promotion, some of which may extend far beyond the labor market. From the perspective of society as a whole, social cost-benefit analysis focuses on the welfare of individuals as a whole, measured in units of benefit. While estimates of program effectiveness are comparatively easy to interpret, the situation is different for cost-benefit analyses. There are different levels at which cost-benefit analyses can start. For macroeconomic analyses, it is generally almost impossible to estimate all the necessary variables. In the case of the predominant direct fiscal cost-benefit analyses from the perspective of the state, on the other hand, there are numerous limitations that must be taken into account when interpreting the results. Due to these limitations and assumptions, it is extremely simplistic and can also be misleading to summarize the net benefit of a measure in a single figure. This is because the costs and benefits of active labor market policy cannot be fully recorded and therefore cannot be precisely quantified. The authors of this article therefore advocate quantitative and qualitative assessments and classifications instead of traditional fiscal cost-benefit analyses. Where information is available, these should discuss costs and benefits, but also take into account non-monetary cost and benefit components and address other aspects (such as target groups and funding objectives). The latter are decisive in determining whether a measure is appropriate. The classification also includes information on the degree of uncertainty, which reveals the relevant aspects for which there is no evidence and the extent to which statements are based on (possibly strong) assumptions." (Author's abstract, IAB-Doku) ((en))
Suggested Citation
Bruckmeier, Kerstin & Lehnert, Claudia & Stephan, Gesine & Wolff, Joachim, 2024.
"Kosten-Nutzen-Analysen der aktiven Arbeitsmarktpolitik: Eine Einschätzung,"
IAB-Forschungsbericht
202421, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
Handle:
RePEc:iab:iabfob:202421
DOI: 10.48720/IAB.FB.2421
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