Cost‑effective Active Labour Market Policies

While the primary purpose of Active Labour Market Policies (ALMPs) is to improve labour market outcomes, these policies are increasingly expected to additionally address social barriers that hinder labour market integration of those furthest from work. All such effects need to be taken into account to evaluate the effectiveness and cost-effectiveness of ALMPs credibly and comprehensively, and thus guide investments into ALMPs in the context of increasing fiscal pressures across the OECD and the EU. This paper maps the integration of social outcomes goals into ALMPs across OECD and EU countries. It reveals significant gaps in countries’ capacity to link data on social outcomes with data from unemployment registers, systematically monitor and conduct counterfactual impact evaluations (CIE) and comprehensive cost-benefit analyses (CBA) considering social outcomes. Strengthening data infrastructure and expanding CIE and CBA to include social outcomes are essential to better understand the full value of ALMPs and support evidence-based policymaking.