1. Active Labour Market Policies in Austria Marcel Fink Workshop on Active Labour Market Policy Programmes and Measures Internal Market 51965 organised in collaboration with: Ministry of Labour, Social Protection and Family of the Republic of Moldova Chisinau, Moldova 16-17th May 2013

2. Topics General considerations: intentions and instruments of active labour market policies (ALMP). Some basic features of Austrian ALMP. ALMP and other policy areas: the need for mutual coordination. Lessons to learn.

3. General considerations: intentions and instruments Starting point: What are the problems intended to be solved? What kind of problem-interpretation predominates? (i.e. „what are the causes of the problem“?).  different ways of „problem framing“;  different possible elements of ALMP get promoted;  large differentiation of strategic orientation of ALMP in EU Member States.

4. General considerations: intentions and instruments Source: Bonoli (2010)

5. General considerations: intentions and instruments The rationalities of ALMP: 1)„Unemployment is caused by a too high reservation wage“ (neoclassical approach)  a)„Make leisure pay less“: incentive reinforcement via low / hardly accessible social benefits and community work, non-employment related training etc. b)„Make outsiders competitive“: upskilling; subsidies for geographical mobility; flexibilisation of wage setting etc.

6. General considerations: intentions and instruments The rationalities of ALMP: 2.„Unemployment is caused by a lack of jobs, deriving from different macro-economic problems“ (heterodox economics)  a)„Invest in human capital, to make the national economy competitive“: employment related training, increased investments for basic and higher education etc. b)„Aim at a more equal interpersonal distribution of the social costs of unemployment“: help outsiders to get job- ready, offer services to deal with multiple individual problem situations, invest in upskilling, offer social services allowing for a combination of gainful employment and family duties (childcare; care for the elderly etc.).

7. Some basic features of Austrian ALMP Austria has traditionally not been a frontrunner in ALMP. Originally (late 1960s) introduced to deal with labour shortage. Some expansion in the 1980s on the background of higher and more persistent unemployment  very much following a „social inclusion approach“ = type 2.b) above . Strong expansion since EU-accession (1993)  apart of others due to incentives via EU-funds .  Literally all relevant political players agree that ALMP is a useful thing.

8. Some basic features of Austrian ALMP Following a largely „pragmatic“ approach i.e. combining different elements of ALMP with a strong emphasis on qualification measures (but no so many long-term qualification measures as e.g. in some Nordic countries) and not explicitly aiming at „wage moderation“ (via pushing through a lower reservation wage).  Employment assistance + Upskilling + Occupation + Incentive Reinforcement

9. Some basic features of Austrian ALMP Source: Eurostat Database

10. Some basic features of Austrian ALMP Long-term unemployed (registered 12 month+) Long-term unoccupied total Long-term unoccupied registered with PES Long-term unoccupied registered with PES as unemployed Source: BMASK

11. Some basic features of Austrian ALMP  ALMP in Austria is rather cost-intensive but rather successful regarding job placements and in keeping the „official“ long-term unemployment rate low. However… …there exists a substantial and recently growing number of people, where stable gainful employment could not be accomplished (the „long-term unoccupied“ – see last slide).

12. ALMP and other policy areas: the need for mutual co-ordination Labour market problems are often linked to shortfalls within different policy areas …. … and ALMP alone may be overchallenged when being expected to compensate for all these problems.  Development of ALMP must be part of an integrated strategy, comprising different policy areas.

13. ALMP and other policy areas: the need for mutual co-ordination Policy areas showing (or for a long time having shown) shortfalls and „reform deadlocks“ in Austria: Minimum income schemes (now reformed); Primary and lower secondary education (with reforms now under way to some extent); Institutional childcare and long-term care (some reforms; still substantial deficits).  Integrated strategies are de facto a rare phenomenon, and often incremental adaptation prevails against rational-comprehensive policy-making.

14. Lessons to learn There exist different „rationalities“ of ALMP. The Austrian example shows that ALMP can successfully be applied as a tool aiming at social inclusion and the development of human resources at first instance… …and not predominantly as one increasing work incentives by applying negative sanctions and for lowering the reserve wage – (which may come along with many problematic side- effects, and where the actual occurrence of expected positive macro-economic effects is anyhow questionable).

15. Lessons to learn ALMP is not a „panacea“, suitable to solve each and every labour-market problem… …which means that an integrated strategy, comprising different policy areas, should be put in place. The development of well established ALMPs is a mid- to long-term project… …it causes considerable financial costs … …and requires the compliance of all relevant political actors.

16. Thank you for your attention! Mag. Dr. Marcel Fink Tel. ++43-650-88 7 44 33 E-Mail: marcel.fink@univie.ac.atmarcel.fink@univie.ac.at http://homepage.univie.ac.at/marcel.fink/ ___________________________________________________ Adjunct Professor, Webster University, Vienna Campus ___________________________________________________ Senior Researcher, Institute for Advanced Studies, Vienna ___________________________________________________ Lecturer, MCI University of Applied Sciences, Innsbruck ___________________________________________________ Lecturer, University of Vienna ___________________________________________________