Impact evaluations provide evidence on what policies work and for which groups. This is necessary to have effective active labour market policies (ALMPs) in place and ensure good use of public funds. Rich micro data on jobseekers and their labour market and social outcomes are needed for such impact evaluations. The OECD helps countries use their data to know what works and how to create more evidence-informed policies.
Employment services
In the face of global megatrends like ageing populations as well as the digital and green transitions, effective policies are crucial to grant more people access to quality jobs. Active labour market policies (ALMPs) entail providing employment services to inspire job seekers, improve skills, help employers meet their skill needs and create employment opportunities. To achieve all this, ALMPs need to be well designed, targeted, cost effective and efficient.
Key messages
Digitalisation in Public Employment Services (PES), including the use of artificial intelligence, is accelerating across all areas of services and operations. This creates many opportunities for providing more effective and efficient employment services by enlarging PES capacity, increasing clients’ satisfaction with PES services, helping jobseekers to find good jobs and assisting employers to meet their needs for labour needs. At the same time, PES need to ensure that nobody is left behind on the digitalisation journey by paying special attention to clients with limited digital skills and other vulnerable groups who may need other channels for service delivery.
The way employment services are organised and delivered varies greatly across countries in terms of the division of responsibilities between key stakeholders, the legislation regulating service provision and the capacity to deliver employment support. Certain features of these systems affect the way ALMP systems can respond to changing labour market needs and to both new and old challenges.
Vulnerable groups often face major or multiple employment obstacles and require individualised, even tailor-made support. Public employment services need to identify these groups and their needs early on, reach out to them proactively and provide integrated, comprehensive and well-targeted support that addresses their needs. Ideally, taking an inclusive approach should combine employment support with other social services in order to connect people with jobs.
The lives and circumstances of jobless people, or those with intermittent, low-paid or unstable employment, are rarely simple. They are often confronted with complex and inter-related employment barriers, such as skills deficiencies, health problems, financial disincentives or care responsibilities. Understanding these barriers is essential for designing policy interventions to overcome them, but systematic and good-quality information on the nature and extents of employment obstacles is currently missing.
Context
Public spending on employment services
OECD countries spend on average 0.62% of their GDP on active labour market policies. This includes spending on their public employment service and administration (about a quarter of total spending), as well as measures such as employment incentives for hiring unemployed people from certain groups, training programmes and other active labour market measures. This also includes employment maintenance incentives which were scaled up during the COVID-19 pandemic in several OECD countries. Some countries, notably New Zealand, Denmark and the Netherlands spent more than 1.5% of GDP on ALMPs in 2021, while spending was less than 0.1% of GDP in the United States and Chile. In all cases, it is crucial that ALMPs are effective to ensure good use of public funds.
Digitalisation and modernisation
In recent years, public employment services (PES) across OECD countries have increasingly used digital technologies to improve their service delivery and processes. This trend was particularly pronounced during the COVID-19 pandemic, when PES enhanced their digital capabilities to maintain contact with and support clients.
As part of this wider trend towards modernisation, PES in many countries are exploring how Artificial Intelligence (AI) can complement and improve their activities. To date, half of OECD public employment services have implemented AI solutions, with applications seen across all key aspects of PES activity. Most commonly, PES are using AI to support matching jobseekers with vacancies, identify jobseeker needs using profiling tools, provide information to clients (including via chatbots) and help employers to design job adverts.
