The Evaluation of Labour Market Policy

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Abstract
Over the past two decades, all major industrial western societies have been plagued with increasing unemployment. The member states of the European Union have been particularly hit by this phenomenon. Corresponding re- employment strategies, notably in the White Book of the European Commission in 1993, were formulated. But these proposals are still contested, partly because of lack of knowledge about the impact of existing policies. Thus, there is reason enough to draw closer attention to the evaluation of labour market policy. What do we know about the effectiveness and efficiency of labour market policies? Which approaches to measure the impact and the cost-effectiveness do exist? How do policymakers, agencies and their officials administering the policies and programmes use the results of evaluation researchers? The aim of this paper is to consider the progress made in evaluation research of labour market policy. The emphasis is more on methodological questions of evaluation and less on substantive questions of labour market policy. Section I outlines the rationale for a target-oriented approach to evaluate labour market policy; section 2 addresses general methodological issues of assessing policy impacts; section 3 discusses why experiments are so little used in labour market policy evaluation, particularly in Europe; section 4 turns to practical conclusions related to monitoring as a necessary complement to sophisticated evaluation research: and section 5 summarizes the arguments.

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