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Activating Jobseekers

How Australia Does It

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This report on the recent Australian experience with activation policies contains valuable lessons for other countries that need to improve the effectiveness of employment services and control benefit expenditure. It provides overview and assessment of labour market policies in Australia including the main institutions, benefit system, training programmes, employment incentives, and disability employment assistance.

Australia is unique among OECD countries in that its mainstream employment services are all delivered by over 100 for-profit and non-profit providers competing in a “quasi-market”, with their operations financed by service fees, employment outcome payments, and a special fund for measures that tackle jobseekers’ barriers to employment. In most other OECD countries, these services are delivered by the Public Employment Service. In the mid 2000s, several benefits previously paid without a job-search requirement were closed or reformed, bringing more people into the effective labour force.

Australia now has one of the highest employment rates in the OECD and this report concludes that its activation system deserves some of the credit for this relatively good performance. The Job Services Australia model, introduced in 2009, reinforced the focus on employment outcomes for highly-disadvantaged groups. This report assesses the latest model for activation and puts forward some recommendations to improve its effectiveness.

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Job brokerage and activation strategies in Australia

Jobseekers registered with a Job Services Australia (JSA) provider (i.e. a private or not-for-profit provider of employment services) are allocated to one of four streams or, after a year of unemployment, to the Work Experience Phase, which provide different levels and forms of assistance. JSA providers are funded through a combination of Service Fees, Placement Fees and Outcome Fees, and are reimbursed for certain types of expenditure through the Employment Pathway Fund. Most of the fees are much higher for disadvantaged jobseekers than for regular, short-term unemployed. Centrelink, the benefit administration body, assesses jobseeker disadvantage at initial registration using the Job Seeker Classification Instrument, which is based on a questionnaire and administrative records. Star Ratings, which are measures of placement performance adjusted for differences in jobseeker characteristics and local labour market conditions, are used to eliminate employment service providers that perform poorly. Most provider staff are counsellors, who conduct regular interviews with jobseekers, negotiate their Employment Pathway Plan, and may provide financial assistance with the cost of taking up work or refer clients to job-search training and related activities. The structure of the JSA caseload is complex, with less than half of all clients required to be available for full-time work and complete the maximum number of hours in the Work Experience Phase.

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