The Treatment Effects Of Active Labour Market Programmes In European Countries And The United States

After the 1970s, European countries and U.S.A. had experienced oil crisis, economic stagnation and mass unemployment. Under this background, the government of European countries and U.S.A. most actively involved in the labor market. In solving the unemployment problem, government gave more emphasis on the use of active labor market programs to reduce the entire unemployment of the labor market and improve the quality and employability of workers. However, the study of the individual’s real utility of the programs (Treatment Effects) didn’t come to a consistent conclusions. Some policies had a positive effect on individuals, but some had no effect or negative effects on individuals. Chinese active labor market programs started late, and programs are dispersed. The related studies also lagged behind. Therefore this paper will systematically study European and U.S.A.’ALMPs from "What are ALMPs", "how to assess ALMPs" and" What is the result of ALMPs", hoping that the study could provide a theoretical idea to Chinese active labor market programs.This paper is a review of the evaluation methods of treatment effect, European and the United States’active labor market programs and its evolution and the evaluation results of ALMPs. The paper firstly classifies the evaluation methods of treatment effect; then introduces the background of European and the United States’ active labor market programs and its evolution, and then divides ALMPs into five categories: public service employment, job search assistance, training and retraining, micro-enterprise development program, employment subsidies. I primarily analysis the impacts of these programs on participants’ employment and wages. Finally, I gives some inspiration and suggestion according to Chinese specific conditions of the labor market.Main conclusions are:European and the United States’ ALMPs cover five programs. The focus and intensity of the programs are different because of the countries’ specific conditions. On average, American spending on ALMPs accounted for about 0.2% of GDP, while European accounted for 1.0%. American ALMPs focused on adults to supply them with employment and training programs, while European ALMPs mainly concerned young people. AS conducting treatment effects assessment, European countries and USA had adopted stringent scientific assessment.To solve the problem of "counterfactual" and "selection bias" problem, they use randomized experiment and quasi-experimental methods. The results of assessment show that, in the short term, public service employment programs, employment subsidies and job search assistance program could improve employment or wage increases. But in the long term, public service employment program and employment subsidy program had no effects on employment and wages, or even had a negative effect. In the long run, training and re-training program could improve participants’ human capital and job skills, and had a positive impact on employment and wages. Small enterprise assistance program had little effect on the actual operation.Through this study we could reach the following revelation:First, China needs to strengthen the scientific assessment of the ALMPs. Second, Chinese positive labor market programs need systematization and diversification; the employment spending needs to increase. Third, when China chooses the specific ALMPs, it must first analyze its actual situation, and then make the targeted choices. Fourth, China needs to establish and perfect the system of labor market legislation and strengthen its law enforcement.