Long time series for public expenditure on labour market programmes

The OECD has collected data for public expenditure on labour market programmes (LMPs) continuously since the mid-1980s. For most longstanding Member countries, data according to a consistent classification system and definition of scope are available for reference years 1985 to 2002. Starting with reference year 1998, Eurostat started collecting and publishing data according to a somewhat different classification system and definition of scope. In line with agreements for bilateral coordination of data collection, the OECD after some time adopted - for non-Eurostat OECD Member countries as well as Eurostat countries – most of the features of the Eurostat system. This allows the OECD to use data collected by Eurostat rather than making a separate data request to the 20 Eurostat countries that are members of the OECD. OECD data according to the “new” classification and definition of scope are generally available for reference year 2002 onwards, or 1998 onwards for Eurostat countries. These data are often used in time-series applications, e.g. for documenting long-term trends in total social expenditure (ìn which labour market programmes are one component), or in time-series regressions that attempt to estimate the impact of training programmes vs. job-creation programmes on unemployment. It is no longer practicable to do such work using only the “old” data which stop in 2002 or the “new” data which start in 2002 or 1998. If the two data sets are combined using crude extrapolation and splicing techniques, time-series movements will result primarily from statistical breaks (i.e. changes in definition and coverage of the statistics) rather than real changes in spending patterns.