3. Active labour market policies and COVID-19: (Re-)connecting people with jobs

Organisational set-up of ALMP systems varies across countries more in terms of policy implementation than policy design

The high-level responsibilities for labour market policies and thus for providing the general framework for ALMP provision lie in the relevant ministries, although more stakeholders are often involved in the policy design. In systems where the ministry responsible for labour market policies and PES are separate public bodies, generally both organisations are involved in designing strategies and accountability frameworks for ALMP provision, as well as ALMP interventions and their budgets (Annex Table 3.A.1). While a single body responsible for drafting changes in policy design might make the process quicker in an emergency situation, involving more stakeholders might ensure better implementation. Furthermore, the majority of ALMP systems (76% of countries responding to the OECD/EC questionnaire) have an official or quasi-official role for the social partners whether through advisory or supervisory bodies, and almost all other countries involve the social partners ad-hoc for consultations (except Israel and Mexico).6 These practices could potentially facilitate designing policies that meet the needs of both labour demand and supply.

There are stark differences in the organisational set-up of ALMP implementation (Figure 3.3), particularly concerning the autonomy of organisations implementing ALMPs. This can heavily affect the agility of the system. On the one hand, greater autonomy of PES and involvement of PrES can facilitate fast changes in operating models, which is crucial in a health crisis when rules on the working environment change abruptly. On the other hand, for contracted-out employment services, it might be difficult to change the contractual terms as a result of sudden changes in needs. The continuation of service provision may then depend largely on willingness of PrES to co-operate. High levels of decentralisation of ALMP provision can lead to more responsiveness to local labour market needs (OECD, 2020[2]; 2014[3]), but require a well-designed national-level accountability framework to function successfully in the long term (Weishaupt, 2014[4])).

In addition to implementing ALMPs, many PES have additional tasks and responsibilities. For example, slightly more than half of the PES in the European Economic Area (EEA) are partially or fully responsible for unemployment benefit schemes (Peters, 2020[5]). Other responsibilities can include administering short-time working schemes, social assistance benefits, parental benefits, pre-retirement benefits or sickness and disability benefits, managing training centres and career services for schools, issuing work permits, licencing private employment services and beyond. A crisis in the labour market means that the PES in charge of benefit schemes are under particular pressure as the needs for both active and passive labour market policies increase. Yet, responsibilities for other services and measures might help PES provide more integrated and holistic support to the people. Furthermore, different services, measures and benefits facilitate PES outreach to vulnerable groups and motivate them to register (Konle-Seidl, 2020[6]).

Figure 3.3. Dashboard: Organisational set-up of ALMP implementation

Note: ALMP: Active Labour Market Policy.

Public employment service (PES) is a public body whose main responsibility is to actively facilitate the integration of jobseekers into the labour market and which implements employment services (providing placement and related services as defined by category 1.1 in the methodology of the OECD Employment and Labour Market Statistics database and European Commission Labour Market Policy database: services that facilitate the integration of jobseekers in the labour market or which assist employers in recruiting and selecting staff, including the provision of self-service facilities such as on-line job-banks), potentially in addition to other active labour market policies (training, employment incentives, sheltered and supported employment and rehabilitation, direct job creation, start-up incentives), and which optionally fulfils additional public functions. “National level PES fully managed by a ministry” refers to cases where a separate national level body exists to implement employment services, i.e. not a fully integrated department in a ministry as in the most left column.

Private employment service (PrES) is a private company or an NGO providing employment services (category 1.1 of labour market policies according to the OECD/EC methodology, i.e. placement and related services), regardless of the financing source (i.e. regardless of having a contract with the public sector or not). The category “PrES relevant on the market in addition to public providers” refers to countries that replied that PrES provide employment services, but did not reply that employment services are contracted out to PrES.

* Only the mainstream / first tier system mapped, while alternative systems are present (e.g. local authorities provide additional employment services).

Source: Responses to OECD/EC questionnaire “Active labour market policy measures to mitigate the rise in (long-term) unemployment”; OECD Employment and Labour Market Statistics database, https://doi.org/10.1787/data-00312-en; and European Commission Labour Market Policy database https://webgate.ec.europa.eu/empl/redisstat/databrowser/explore/all/lmp?lang=en&display=card&sort=category.

Finer details of specific ALMPs are often set in few flexible regulations

High-level regulations of ALMP provision can limit the flexibility of the regulatory set-up. Generally, the higher the level of the institution that needs to adopt the regulation, the longer the process takes; also as these regulations often need to be approved first by lower-level bodies. For example, amending an act in a parliamentary process can take considerably longer than adopting a ministerial decree or amending a PES internal guideline. However, it might be important to fix the general framework for ALMP provision (the organisational set-up, objectives of ALMP provision) in higher-level regulations to make a top political body accountable for the system and ensure democratic processes.

The agility of the regulatory set-up also depends on the complexity of the system. When ALMP design is set in several regulations, amending the design to meet the changing needs of the labour market can be a cumbersome process.

Figure 3.4 provides an overview of how agile the regulatory set-ups of ALMP provision across the OECD and EU countries potentially are. The complexity of regulation is indicated by the number of types of regulations that set the conditions of ALMPs (i.e. design of ALMP measures and services). Theoretically, this number could be up to eight (regulations adopted by the parliament, government, minister, ministry, PES supervisory body, PES executive management, regional or local authorities or other bodies). In practice, only eight countries use more than three types of regulations to set ALMP conditions, although the number of regulations can in practice be higher if several regulations on the same level are in force. The indicator for the flexibility of the ALMP regulation is defined in two groups – whether at least one regulation for ALMP conditions is an act passed by the parliament or not. More than half of the countries belong to the latter group and they could potentially change the ALMP design swiftly when labour market needs change.

Figure 3.4. Dashboard: Regulatory set-up of ALMP provision

Note: ALMP: Active Labour Market Policy.

The regulatory complexity (the indication for a “Lean regulation”) counts eight types of regulations to set ALMP conditions: 1) Act passed by the parliament, 2) Decree/order by the government, 3) Decree/order by a minister, 4) Decision by a ministry (key official), 5) Decision by the PES supervisory body, 6) Decision by the PES executive management, 7) Decision by regional/local authorities, 8) Other regulations.

In Belgium, the conditions of specific ALMPs are set by one type of regulation in each region, although slightly differently across regions (by a decision of the PES supervisory body in the Brussels region, and by a decree of the government in Flanders and Wallonia).

Conditions of specific ALMPs include eligibility criteria, durations, amounts etc. relevant for implementing each ALMP. The types of regulations to set the general groups eligible for ALMPs, list of specific ALMPs, target groups of specific ALMPs, and ALMP budgets are presented in Lauringson and Luske (forthcoming[1]).

Source: Responses to OECD/EC questionnaire “Active labour market policy measures to mitigate the rise in (long-term) unemployment”.

Capacity of ALMP systems defined through public expenditures on employment services and ALMP measures

More resources available for ALMP systems before a labour market shock occurs can facilitate absorption of increased pressure on the system. In most OECD and EU countries, budgets for ALMPs are not automatically adjusted according to the labour market situation and amending budgets follows fixed procedures, including negotiations between stakeholders. Even in countries where ALMP budgets do have automatic corrections (Belgium (Flanders), Switzerland), actual implementation of the budget can take some time – e.g. hiring additional staff for employment services or contracting out additional training places. A system with lower caseloads for employment counsellors could more easily continue with effective job search counselling by making some adaptations (cutting time for counselling sessions, focusing on more vulnerable groups, cutting some parts of additional support services), while a system already working on its limits might not have any room for manoeuvre.

Figure 3.5 provides some indication of the capacity of ALMP systems before the COVID-19 pandemic. The figure displays on the horizontal axis the expenditures on ALMP measures (categories 2 to 7, i.e. training, employment incentives, supported employment and rehabilitation, direct jobs creation and start-up incentives) per unemployed as a share of GDP per capita in 2018. This indicates the capacity of the system to support jobseekers with intensive interventions and takes into account the level of unemployment in countries. The vertical axis displays the expenditures on placement and related services per unemployed as a share of GDP per capita – category 1.1 according to the OECD categorisation of labour market policies that aim to capture expenditures on employment services by public employment services and other publicly-financed bodies, but excluding expenditures on benefit administration (OECD, 2015[7]). The latter is an indication of staff levels and caseloads in the employment services. Furthermore, empirical evidence shows that these types of expenditures are generally most cost-effective as the relative cost is lower compared to other ALMPs (Brown and Koettl, 2015[8]; Card, Kluve and Weber, 2018[9]). An ALMP system was potentially able to absorb the first effects of COVID-19 better when neither of the indicators were at a low level.

Although the latest data for ALMP expenditures are from 2018, these likely present the situation relatively well also for the beginning of 2020, as the resources available for ALMPs do not change usually a lot from year to year when the economic situation is relatively stable. Nevertheless, the indicators might underestimate or overestimate the capacity of systems in countries where it is not possible to accurately differentiate between expenditures for administrating ALMPs, and benefits and other measures, or where digital tools are highly advanced and the need for staff is lower.7 Annex Table 3.A.1 provides an additional indicator for the capacity of the ALMP systems comparing ALMP expenditures (without administration costs of labour market policies and other activities, i.e. categories 1.1 and 2 to 7) to expenditures on passive labour market policies (categories 8 to 9, above all unemployment benefit schemes) to indicate how activation oriented different labour market policy systems are.

Figure 3.5. Dashboard: Capacity of ALMP systems

Expenditures on ALMPs in 2018

Note: ALMP: Active Labour Market Policy.

Estimations for “Capacity of (public) employment services” for Bulgaria and Switzerland. Canada: data include federal expenditures on programmes implemented by the provinces and territories, but do not generally include the provinces’ additional or complementary funding of these programmes.

Capacity of (public) employment services: Publicly funded expenditures on placement and related services (category 1.1) per unemployed person as a percentage of GDP per capita (i.e. other expenditures in category 1, above all expenditures on benefit administration, are excluded). Capacity of ALMP measures: Publicly funded expenditures on ALMP measures (categories 2 to 7: training, employment incentives, supported employment and rehabilitation, direct jobs creation, start-up incentives) per unemployed person as a percentage of GDP per capita.

Expenditures on ALMPs per unemployed as a percentage of GDP per capita are calculated as expenditures on ALMP relative to GDP multiplied by population size over the number of unemployed.

Unemployed according to the International Labour Organization (ILO) definition of unemployment and based on OECD Labour Force Statistics.

For detailed ALMP categories, see http://www.oecd.org/els/emp/Coverage-and-classification-of-OECD-data-2015.pdf.

Source: OECD Employment and Labour Market Statistics database, https://doi.org/10.1787/data-00312-en and European Commission Labour Market Policy database https://webgate.ec.europa.eu/empl/redisstat/databrowser/explore/all/lmp?lang=en&display=card&sort=category.

 StatLink https://stat.link/y21n0m

Institutional features that enable effective and agile responses to labour market shocks identified by countries in 2020

The most important features highlighted by countries to enable them to develop both their short- and long-term responses to COVID-19 were stakeholder engagement, organisational set-up of the ALMP system, regulatory set-up of the ALMP system, resources for ALMPs and preparedness for a crisis that imposed remote working arrangements (Figure 3.6).

Figure 3.6. Key features of ALMP systems for agile and effective responses to COVID-19

Note: ALMP: Active Labour Market Policy.

The graph is based on self-assessments by the OECD and EU countries provided as responses to OECD/EC questionnaire “Active labour market policy measures to mitigate the rise in (long-term) unemployment”. The countries were asked to highlight the key enablers that helped them adjust their ALMP responses to COVID-19. The analysis enables to summarise those elements that are potentially helpful for agile and effective responses, but does not provide quantitative evidence on causal links.

Source: Responses to OECD/EC questionnaire “Active labour market policy measures to mitigate the rise in (long-term) unemployment”.

Virtually all countries have involved all key stakeholders of their ALMP systems in developing their strategies on mitigating the effects of the COVID-19 crisis on the labour market, taking advantage of the wider set of expertise this offers. Countries that have a national level organisation for PES overwhelmingly involve them in strategy development, in addition to the ministry responsible for labour market policies. Other key partners in the development process have been employers’ associations and trade unions, sub-national levels of government and ALMP providers (such as organisations representing local private employment services and training providers). Strategy development has often involved other ministries and public sector institutions more closely than before to ensure co-ordinated responses to the crisis across policy fields. For example, in response to the COVID-19 pandemic, Australia dissolved the New Employment Services Reference Group to allow for the establishment of a new advisory group with a broader remit to support economic recovery, including experts across business, training, social welfare and the employment services industry.

Tight co-operation and co-ordination between the stakeholders in ALMP systems has been key to quick and well-designed responses to address the challenges in the labour market posed by the COVID-19 outbreak. More than half of the countries replying to the OECD/EC questionnaire highlight co-operation and co-ordination as one of the main factors facilitating their COVID-19 responses. Co-ordination and established governance models have become particularly critical in decentralised systems, where a high share of responsibilities for ALMPs lies in the regional or local level authorities (last two columns in Figure 3.3). For example, Italy has worked intensively on establishing the governance model and stakeholders’ roles and responsibilities after a major reform in the organisational set-up was launched in 2014-16, and which results have facilitated the country to co-ordinate responses to COVID-19 crisis. Co-operation and establishment of designated steering groups for crisis management have been important in systems where responsibilities to design and implement ALMPs are shared among several national level organisations, such as in cases where the PES is set up as an autonomous public body (countries in the middle column in Figure 3.3). For example, the ministry and PES in Slovenia have had almost daily contact since the start of the COVID-19 crisis, which is based on a long tradition of open communication between the two organisations and shared objectives.

Close to half of the countries that consider the co-operation of stakeholders as a particularly beneficial practice, highlight that engaging the social partners in the development of their short- and long-term responses has been of particularly high value. In addition, Austria, Belgium (Brussels), Finland and Norway have involved researchers in the development of their employment policy responses. In the Brussels region, View Brussels (the Brussels Employment and Training Observatory, whose main mission is to observe and analyse the regional labour market) has participated actively in the dedicated task force to re-design and implement employment policy in response to COVID-19, providing the task force with regional monitoring data. In Finland, the Ministry of Economic Affairs and Employment and the Ministry of Finance appointed a working group swiftly when COVID-19 reached the country to prepare an assessment of the impact of the crisis on its economy and labour market and develop a strategy to tackle these impacts. The three-stage strategy to reduce the immediate adverse effects, stimulate the economy and repair the damages was proposed already in early May 2020 (Ministry of Economic Affairs and Employment, 2020[10]). Also, in Austria, researchers were involved in re-designing the ALMP package from the very beginning of the crisis through a standing research committee.

Countries with more flexible ALMP regulations were able to redesign their policies quicker. About one-third of the countries that responded to the survey find that an emergency situation declared by their government or passing particular emergency laws enabled them to adopt the necessary regulations for redesigning ALMPs quickly, without the normal parliamentary process. However, close to one-third of the countries already had very general framework laws for ALMP provision before the crisis, so that introducing and redesigning ALMPs was possible without particular emergency laws. In these countries, adaptions of regulations by their government or ministries was sufficient, or no changes in regulations were necessary at all (the Czech Republic, Malta and New Zealand). Although in total two-thirds of countries regulate the details of ALMP design in lower-level regulations (Figure 3.4), half of them had to still make major adjustments to introduce new schemes. Regardless of how flexible the regulations were before COVID-19, strong political will played a crucial role in many cases to adapt ALMPs to the new needs. The crisis also demonstrated that leaner higher-level ALMP regulations might be desirable as well in a more normal economic situation, to adapt to the continuously changing labour market needs. While the finer details of ALMP design should be flexible and adaptable by lower level institutions, the general framework should be fixed via a parliamentary process to ensure political accountability and democratic processes.

Higher autonomy in PES to decide their operating model and ALMP implementation details has supported responsiveness to local labour market needs and the continuity of ALMP provision despite sudden changes in the working environment. One-third of countries state that high flexibility in ALMP implementation due to their organisational set-up (supported by flexible ALMP regulation) has been crucial in their swift responses to the crisis. Having an autonomous national level PES set up with a supervisory body involving the social partners, is often highlighted by countries as a means to deliver flexible and swift policy responses (in total two-thirds of countries in the middle column in Figure 3.3 stated that some features of their organisational set-up were of key importance). Close to 40% of the countries with a decentralised ALMP system (last two columns in Figure 3.3) note that their set-up enabled fast changes in operating models that took into account local labour market conditions. Mature governance models and co-ordination of activities were critical enablers of this. In countries where a large share of employment services are outsourced, mature and trustful relationships between the ministry and the providers have been key to adapt to the new situation (stressed by Australia and the United Kingdom), involving, for example, changes to the contractual terms agreeable to both parties.

Only a minority of countries exercise a high flexibility of resources to respond to changes in the labour market. Sweden has been successful in amending its ALMP budget in response to COVID-19 faster than other countries as its regulations mean that an increase in long-term unemployment automatically raises funds available both for benefits and ALMPs. Similarly, in the Netherlands, some resources for ALMPs become available automatically for PES when expenditures on unemployment benefits increase. In Switzerland, where cantons are responsible for ALMP provision, ALMP budgets are directly linked to the number of registered jobseekers in cantons and can be adjusted during the year. In Belgium (Flanders), most ALMPs use open budget, which means that additional funds are automatically made available when the needs exceed expectations.

Regarding the flexibility of human resources in PES, close to half of the countries were able to increase their staff numbers in 2020 in response to the crisis and two-thirds made staff re-allocations (mostly for call centres, registering jobseekers, processing benefits, see details in Section 3.3.1). Belgium (Brussels), Croatia, Finland and Slovenia consider the adaptability and devotedness of staff, as well as possibilities to reallocate tasks, to have been key in coping with the challenges of COVID-19 in 2020.

Of all OECD and EU countries, only Israel and Switzerland had a plan prepared before the COVID-19 outbreak to tackle a potential crisis on the labour market that proved to be useful in early 2020. Nevertheless, as the COVID-19 crisis posed challenges that were not foreseen, even these crisis management plans had to be adjusted extensively. Responses to the COVID-19 challenges were facilitated in Austria, Finland, Germany, the Netherlands, New Zealand and Switzerland, as they had already specific measures in place to tackle an economic crisis situation, which were designed during the GFC or following natural disasters (New Zealand). As the COVID-19 crisis posed challenges to the working environment, countries’ preparedness to respond to the situation was also highly dependent on the level of digitalisation and possibilities to telework. Some countries consider these factors as integral in coping with the new situation.

Responses in 2020 focused on PES operating models

The short-term responses of ALMP systems to the COVID-19 crisis involved above all changes in the operating models of public and private employment services, while the scope for redesigning active support to jobseekers was limited. First, the suddenness of the COVID-19 outbreak and the subsequent restrictions on social interactions imposed a rapid change in working environments and service delivery models. Second, many PES witnessed high inflows of applications for benefits and registrations as well as increased needs for information by the clients (OECD, 2020[11]). On top of that, the approaches taken needed tight monitoring and frequent re-assessments, which required establishment of crisis management systems in many PES, supported by adopting new monitoring tools and dashboards and using data for management decisions more than ever before. Close to 90% of countries responding to the OECD/EC questionnaire highlight the changes in PES operating models as the core parts of their short-term responses to the COVID-19 crisis. More specifically, the key changes involved: i) digitalising processes, boosting remote channels, automating processes for clients and the back-office, ii) simplifying processes for clients and staff, iii) adapting processes to meet health guidelines on the premises, iv) adopting new tools to increase the quality and timeliness of statistics and management information, v) adapting communication to staff and clients, and vi) reallocating staff, increasing staff numbers and training staff to increase PES capacity. One third of countries made more significant changes to ALMP design already in their short-term strategies in 2020.

Medium- and long-term strategies aim at re-designing ALMPs to meet new needs

Most countries had started developing their medium and longer-term strategies of labour market policy responses to the COVID-19 crisis by October/November 2020, but only about half of the countries had already adopted a new strategy. Discussions on the longer-term responses were hindered as day-to-day crisis management absorbed policy makers and implementers throughout 2020. In addition, the health situation, social distancing requirements and the forecasts of the labour market situation kept changing significantly over the year (see Chapter 1), with implications on the appropriate longer-term policy responses.

Compared with the short-term responses, longer-term strategies tend to focus much more on the content of the support to jobseekers, employees and employers, rather than delivery models and PES operating models. The planned changes concern redesigning the basket of ALMPs to match the changed needs of jobseekers and enterprises. All countries responding to the OECD/EC questionnaire that had adopted their longer-term strategy by October 2020, or were to adopt the strategy soon, identified ALMP design and targeting as key components of their plans for 2021 and beyond. For example, Belgium (Brussels) aims to give more priority to the most vulnerable groups, who have suffered more in the COVID-19 crisis and to apply a sectoral approach to employers to meet better the sectoral needs. Belgium (Wallonia) intends to further prioritise individualised approaches to jobseekers, particularly to those who have been recently dismissed, in its new model of “instant support” focusing more on coaching and finding solutions swiftly. Greece is planning to give particular attention to supporting jobseekers from the sectors that have suffered the most in the current crisis, e.g. tourism and culture. Slovenia is trying to increase co-operation with the providers of social services to better support groups that have multiple labour market barriers, and promoting employment of disadvantaged jobseekers (including support with job interviews and post-placement support). Colombia is planning to address the labour market integration challenges of several vulnerable groups, such as youth, older workers, jobseekers from the sectors that suffered exceptionally more due to COVID-19, as well as people working informally. Changes in different ALMPs are discussed in more detail in Section 3.4 of this chapter.

At the same time, still more than half of the countries plan to continue fine-tuning the ALMP delivery models in their longer-term strategies, learning from the experience of 2020. For example, the COVID-19 outbreak led many countries to review and simplify their processes (internally and with clients) and to decrease the level of bureaucracy. Several countries aim to continue making their ALMP design and implementation processes leaner through reviewing structural set-ups, and functions and tasks of all stakeholders involved. Also further digitalisation and automation of processes remain high in the PES agenda, aiming at further increasing PES efficiency (see Section 3.3.2 for more details).

Increasing public expenditure on ALMPs

Evidence shows that spending on ALMPs can help reduce unemployment and long-term unemployment.8 Following the onset of the GFC many countries reacted swiftly with discretionary changes to ALMP expenditure in response to the economic downturn to sustain labour demand and support the unemployed find work. Measures taken by OECD countries as early as 2008/09 included increased funding for their PES and additional investments in ALMPs such as employment incentives, reductions in non-wage labour costs, public sector job creation, business start-up incentives, work experience and training programmes (OECD, 2009[12]).

Countries responded swiftly also to the current downturn and made adjustments to their ALMPs. While some of these adjustments did not require additional funding (e.g. reallocation of staff), most countries increased their funding for ALMPs over the course of 2020 and are planning further changes in 2021. Two principal expenditure categories are distinguished for describing these changes in funding:

• Labour market services:9 This includes public provision (or private provision, with public financing) of counselling and case management of jobseekers, financial assistance with the costs of job search or mobility to take up work, and job brokerage and related services for employers, including similar services delivered by private providers but with public financing. Also included is the administration of benefits such as unemployment benefits, job retention schemes and redundancy or bankruptcy compensations.

• Active labour market measures:10 These include training, employment incentives, sheltered and supported employment and rehabilitation, direct job creation and start-up incentives, if targeted on the unemployed and closely-related groups such as inactive who would like to work, or employed who are at known risk of involuntary job loss.

Just under two-thirds (65%) of all responding countries increased their budget for labour market services over the course of 2020 (Figure 3.7). For example, in Denmark, the Netherlands and Switzerland the budget for labour market services and active labour market measures automatically increases in line with rising unemployment making the system more responsive to changes in labour market needs (see Section 3.2.1). In many countries additional resources for labour market services were used to hire additional staff to support a higher caseload of jobseekers. In Australia, additional funding was used to enhance the digital service offer for jobseekers. A bolder picture emerges for active labour market measures. Seven in ten countries reported an increase in funding for these types of programmes. For example, Canada more than doubled the funding for the Workforce Development Agreements11 in comparison to the 2018/19 financial year. Hungary increased its expenditure for active labour market measures by 21% in comparison to 2018, Portugal by 30% in comparison to 2018 and Switzerland estimated the increase at around 20%. Details on new or expanded active labour market measures are provided in Section 3.4.

In 2021, just over half (53%) of all responding countries plan to increase the funding levels for labour market services in comparison to 2020, with a similar number of countries (52%) planning an increase in and active labour market measures. A number of countries, however, had to make difficult choices. For 2020, Mexico reported a budget decrease both for labour market services and active labour market measures in order to redirect spending to address priorities and deal with the health crisis caused by COVID-19. In Spain, unused spending on active labour market measures was re-allocated to job retention policies. In 2021, three countries (Hungary, Poland and the Slovak Republic) expect to decrease their expenditure on active labour market measures in comparison to 2020. All three countries reported increases in 2020 and expect to return to pre-crisis levels again. For a full overview of all countries’ spending decisions on labour market services and active labour market measures in 2020 and 2021 see OECD (2021[13]).

Figure 3.7. The majority of OECD/EU countries increased expenditure on active labour market policies in 2020 and further increases are planned in 2021

Public expenditure budget allocation for labour market services and active labour market measures, percentage of countries by type of action

Note: Labour market services includes public (or private, with public financing) provision of employment services and administration of benefits. Active labour market measures includes training, employment incentives, sheltered and supported employment and rehabilitation, direct job creation and start-up incentives.

Source: OECD (2021[13]), “Active labour market policy measures to mitigate the rise in (long-term) unemployment: A summary of country responses to the OECD/EC questionnaire”, https://www.oecd.org/els/emp/almpmeasuresCOVID-19.pdf.

 StatLink https://stat.link/1f5jcl

While the evidence presented here shows that many countries moved quickly to increase ALMP spending, it is too early to judge whether additional resources made available in 2020 and planned for 2021 were, or will be, sufficient to provide the required level of support to ensure a rapid return to work in the recovery.12 Following the GFC, OECD governments scaled up ALMP spending more strongly than in earlier recessions, probably due to their fuller appreciation of the need to retain an activation stance during a deep recession. Nevertheless, spending per unemployed person declined by 21% on average (in real terms) across the OECD between 2007 and 2010 (OECD, 2012[14]). Larger additional investments into PES and ALMPs may be needed going forward to support the reallocation of labour from declining to growing firms, including across sectors given the persistence of depressed conditions in some sectors (e.g. leisure and hospitality – see Chapter 1). This requires advanced planning, as in contrast to income support policies it may not be straightforward to translate increased funding into higher capacity in the short run. To achieve this, PES need to hire new staff, existing programmes need to be expanded or new ones established, which in turn requires agile systems of ALMP provision, as argued in Section 3.2.

Staff reallocations alleviated initial pressures, but additional PES staff is needed in many countries

The immediate effect of the COVID-19 crisis hit PES when governments introduced lockdowns and social distancing measures in March/April 2020, with the number of jobseekers and applications for job retention schemes rocketing (OECD, 2020[11]) – see also Chapter 2. Sixty-seven percent of countries responding to the OECD/EC questionnaire reported staff reallocations in their PES as an immediate reaction to deal with the most pressing tasks (for information by country see OECD (2021[13])). Often staff reallocations were made to support the handling of short-time work and other job retention schemes, both in countries with pre-existing schemes as well as those that introduced such schemes for the first time (OECD, 2020[15]). Reallocation of staff to help with processing of job retention schemes was reported by Austria, the Czech Republic, Korea, Luxembourg, the Slovak Republic, Slovenia, Switzerland and Turkey. For example, in late spring 2020, more than 60% of staff in the provincial directorates of the Turkish PES were assigned to payment of short-time working benefits to ensure that payments were processed correctly and paid on time to beneficiaries. Staff were also reallocated to support the processing of unemployment benefit claims and registration of new jobseekers in Finland, Germany, Iceland, Ireland, Korea, Latvia, New Zealand and Norway, and to support the contact/call centres in Belgium (Brussels) and Slovenia. During the peak of the crisis, the German PES reallocated up to 20% of its staff.

Staff reallocations have often not been sufficient to ensure service continuity and over half of all countries therefore reacted with hiring additional PES staff over the course of 2020 (for information by country see OECD (2021[13])). In many hiring PES, the new positions are on a fixed-term basis and sometimes involved shifting staff from other public institutions into the PES. New staff have been hired to deal with short-time work and other job retention schemes (e.g. Lithuania, Luxembourg), process the high number of unemployment benefit claims (e.g. New Zealand and Norway), boost call centre support, (e.g. Finland, Luxembourg), provide counselling services to jobseekers and employers (e.g. Estonia, Finland, Ireland, Japan and Korea) and support the further development of online solutions (e.g. Turkey). In most hiring PES the increase in staff over the course of 2020 has been modest, ranging from 1% to 5%. Notable exceptions are Iceland, Ireland, Israel, Japan, Korea and Switzerland where PES staffing levels have been increased by 10% or more. Iceland increased its PES staffing by 37% in comparison to the beginning of 2020 and Korea by 79% through fixed-term contracts.

Public employment services are likely to require additional staff in 2021 to deliver high-quality services and have a comprehensive offer of ALMPs for a higher number of jobseekers. Without additional staff, there is a clear risk that PES may not be in a position to offer individual comprehensive support that more vulnerable groups may require (see Section 3.4.3). Among countries responding to the questionnaire almost half (47%) reported plans to further increase PES staff levels in 2021 (for information by country see OECD (2021[13])). For example, the PES in France and the United Kingdom plan to hire additional staff to increase front-line staff in local offices and the new employment programmes for young people, 1 jeune 1 solution (“1 youth 1 solution”) in France and Kickstart in the United Kingdom. The PES in Luxembourg plans to hire new staff in 2021 to guarantee high level of service quality to both jobseekers and employers, as well as to develop new services. The Turkish PES plans to hire additional software developers and IT experts to support the expansion of online services. In many countries PES plans were still under discussion at the time the OECD received questionnaire responses and a number of countries highlighted that hiring decisions depend on the further development of unemployment.

Contracting out employment services as an option to increase capacity in the medium- to longer-term

Many PES face capacity constraints, as inflows of jobseekers applications continue to be high. One option to address the higher and potentially further rising need for employment services is to contract out publicly financed labour market services such as counselling and case management of jobseekers to external service providers. Increased use of contracted provision is likely to be considered mainly by countries with extensive experience in tendering of employment services. While offering the opportunity to scaling up the support for different types of jobseekers, outsourcing of labour market services also carries risks in its design and implementation (Langenbucher and Vodopivec, forthcoming[16]).

Two in five of the countries covered by the OECD-EU survey already contract out employment services to external parties, including both to for-profit and not-for-profit entities. A number of countries foresee expanding the use of contracted out services in the near future. Among them are Austria, Belgium (Brussels), Ireland, Israel, Korea, Sweden and the United Kingdom, and (potentially further into the future) Slovenia. Austria and Belgium (Brussels) recently expanded the use of contracted provision to support displaced workers who lost their jobs due to business closures or other economic reasons and other groups at risk (see Box 3.2).

A number of countries use some form of contracted-out provision for all types of jobseekers (e.g. Colombia, Denmark, Italy, Norway, Sweden) or particularly job-ready jobseekers (e.g. France). Other countries outsource specialised support to specific target groups, including young people (e.g. Korea, New Zealand), persons with a disability or a health condition (e.g. the United Kingdom (England and Wales)), older jobseekers (e.g. Austria, Belgium (Brussels)) and long-term unemployed (e.g. Ireland and Poland). Following the GFC, large-scale programmes using contracted-out employment services to support a high number of long-term unemployed back into work have been introduced in the United Kingdom in 2011 (Work Programme; (OECD, 2014[3])) and Ireland in 2015 (JobPath; see Box 3.3). Both programmes ran over a period of five years. Building on the experience with the Work Programme, the British Department for Work and Pensions has already started the commissioning process for a new programme in England and Wales, called Restart, which will go live in summer 2021.

Remote channels have been crucial to maintain services

Facilitating greater use of technology and expanding services beyond traditional face-to-face settings have been features of many PES strategies long before the current pandemic. However, the severity of the recent face-to-face restrictions forced PES to scale up and adapt this capacity at an unprecedented pace. They also represent a unique opportunity for PES to seize this momentum and advance a step-change in technology utilisation, to better serve their customers as they continue into a post-pandemic world.

Figure 3.8 shows the dynamics of PES digital and remote access to services. Prior to the pandemic, on average, around half of PES offered remote access across the range of activities undertaken. Subsequent to the social distancing restrictions imposed due to COVID-19, this has increased to around 80% and the variation in remote access between activities has dropped. Of those PES offering remote access to services prior to the pandemic, 42% have augmented delivery subsequent to it. The strides made in extending remote and digital access by PES in less than one year, almost surpasses the totality of that access that was built up prior to the pandemic. Across the nine activities surveyed, 60% of countries had made changes to facilitate remote access across five or more activities. Those countries with good remote access prior to the pandemic (e.g. Belgium (Flanders), Estonia and Sweden) had to make relatively few changes to their delivery, compared to those with relatively little previous remote access (e.g. Spain having made changes to the entire suite of activities surveyed).

Figure 3.8. Proportion of PES offering remote/digital access to services

Source: OECD (2021[13]), “Active labour market policy measures to mitigate the rise in (long-term) unemployment: A summary of country responses to the OECD/EC questionnaire”, https://www.oecd.org/els/emp/almpmeasuresCOVID-19.pdf.

 StatLink https://stat.link/wdha2c

The recent introduction of remote access by some PES and the expansion of it by others suggests there is still much development – to both scope and content – that can be achieved, building on recent successes. It is important to note that whilst PES have increased their ability to deal with customers remotely this was often piecemeal, designed to meet the immediate pressures of COVID-19 inflows. This included allowing customers’ registrations via paper applications sent by ordinary mail and applications via email and by phone. Others streamlined their existing digital channels to remove some face-to-face contact. The challenge for PES will be to review their processes subsequent to the pandemic and to design remote and digital channels that offer streamlined and future proof delivery. Some of the shortcuts to registration may have weakened checks and balances on fraud and error, a compromise to ensure that speed of support to individuals was maintained. Work will need to be undertaken to review the impact of the changes made, so that integrity of benefit administration is maintained when we move beyond the pandemic.

Digital channels and automation provide efficient service capacity to PES

The speed at which the pandemic unfolded and the impact of social distancing restrictions, brought an abrupt halt to face-to-face delivery of services across OECD countries. Increased digitalisation of services helped PES mitigate the impact in several ways:

• Teleworking arrangements for staff in front and back-office functions allowed service continuity, protected workers and maintained capacity where the physical demands of social distancing reduced available office capacity (European Commission, 2020[23]; ILO, 2020[24]).

• Remote channels for ALMP provision have allowed continuation of counselling, career guidance, job matching and training via online channels. Interactive service provision such as counsellors interacting with a client via an online channel (e.g. in the United Kingdom via the Universal Credit “journal” where caseworkers and clients can interact with one another) has been supported with more “static” online support (information on PES websites, general guidelines for job search, videos for training etc.).

• Remote benefit applications and jobseeker registrations (remote channels and user-interfaces enabling jobseekers to send or upload their data to PES IT systems) have protected customers by limiting social exposure risk and facilitated the speed and volume of applications.

PES that offered comprehensive e-services for clients, in combination with automated back office systems, were able to almost fully serve their clients without the need for personal interaction (e.g. Estonia, Belgium (Brussels and Flanders), Iceland, the Netherlands, Norway the United Kingdom). This served twin benefits: i) to facilitate quick and easy application for benefits, critical for individuals and families to meet their sustenance and security needs; and ii) to allow PES to reserve what little face-to-face capacity they retained for their most vulnerable customers. PES with more advanced digital capacity were able to preserve their capacity for ALMP delivery. For example, the Estonian PES was already providing career counselling via Skype prior to the pandemic, allowing them to seamlessly continue high quality service provision to their customers as the pandemic hit (Holland and Mann, 2020[25]).

Whilst digital penetration is now much higher among PES (see Figure 3.8), there are still some PES that do not offer such access across a majority of services. An important element of digital strategies will be to embed the use of e-services as the default mode for registration and administration of benefits (e.g. already in Iceland, Italy, the Netherlands, Norway) also beyond the pandemic. In turn, it is important to reserve face-to-face interaction for those clients without digital skills or with complex needs that may necessitate personal contact. ALMP provision should rely on a combination of digital and face-to-face support, depending on the specific needs of target groups and the services and measures in question. Careful evidence building is required before moving to broader digital provision of ALMP in the longer term. Previous evidence has shown that there can be some risk to channel shift in delivery, so building theories of change and testing the impact of digital delivery on outcomes should be incorporated prior to any shift. For example, the reform in Finland in 2013 substituting face-to-face counselling with online counselling in 60 municipalities, has been estimated to have increased unemployment length by 2-3 weeks (Vehkasalo, 2020[26]). The importance of channel management to fit to the target groups has been demonstrated also in Austria, the Netherlands and the United Kingdom (Middlemas, 2006[27]).

It is vital that PES continue to develop their technological capacities so that they may design and implement digital services at the heart of their offer going forwards. This will require a continued investment in IT infrastructure to allow both PES employees and customers to seamlessly utilise all the tools at their disposal. It should be designed with the service users’ needs at the centre. Case workers should be able to easily review customer circumstances, skills and experience, match them to vacancies and use them to provide well-targeted ALMPs. PES customers should be able to easily navigate the information, support and training available to them and to select the best available vacancies. For example, the PES of Belgium (Flanders) restructured its product development so that the customer is at the heart of the design and implementation process and any application not used sufficiently by customers after its implementation is now discarded (Peeters, 2020[28]).

PES should also consider the most appropriate co-ordination of data and services across national and local agencies, to ensure that data can be linked and shared and service provision tailored for maximum effect. PES that can link customer data to benefit, income and employment records and to local and national training provision and vacancies, will be able to cross-use the data and increase efficiency for customers. For example, the move to Universal Credit in the United Kingdom means that customers no longer have to make separate applications for five different benefits, particularly useful for people that cycle into and out of work frequently.

There will always exist a group of customers for whom a purely digital and/or remote offering is not appropriate and PES should retain some face-to-face capacity to ensure continued support for these customers. At the same time, with a fuller digital capacity for society as a whole, PES should – in collaboration with other responsible agencies – seek to equip those without digital capability with the tools to enable them to participate. This will require not only training in digital skills and IT but also access to the necessary equipment to do this. For example, through labour market transfer agreements, Canada has provided provinces and territories, who design and deliver training and employment programming, with the flexibility to use federal funds to provide IT equipment and internet access to learners that may have otherwise been excluded from participation. This is particularly important as those individuals without this access are also those who may benefit the most from it (for example, older workers, migrants or those with fewer skills). Colombia has also sought to include people without access to computer equipment or with limited internet connection (such as students living in rural and remote areas) by introducing tools such as pre-recorded classes, tutorial videos, groups on messaging applications, emails, video calls or phone calls.

Artificial Intelligence (AI) can enhance service delivery going forwards

The use of Artificial Intelligence (AI) practices and advanced analytics can help PES manage their COVID-19-related caseload in the short term and build capacity to improve longer-term outcomes. However, care needs to be taken to protect service users in the design and implementation of any service improvements via the use of AI and algorithms for decision-making and sufficient heed paid to the equitable assignment of customers to provision, based on digital recommendations. Functionality will need to be designed to protect user data, compliant with data protection regulations. Box 3.4 discusses the various aspects of ALMP provision that AI and advanced analytics can facilitate in more detail and provides some country examples. PES that had already begun to utilise AI in their work will be better placed to mitigate the extra burden placed upon them by increased numbers of jobseekers, principally along three dimensions:

• Better matching workers to vacancies: In a period of accelerated structural change, AI can facilitate better matching of individuals to vacancies, particularly through the assimilation of data on jobseekers’ existing skills. Learning algorithms can spot emerging patterns that may speed up the reabsorption of displaced workers into industries requiring similar skillsets – see also Chapter 1 and OECD (2021[29]) – and AI can quickly process large pools of jobseekers. Usage of click data may also help to identify how workers search for vacancies to improve recommendations for new jobseekers.

• Better tailoring of services and ALMP: Not only has COVID-19 substantially increased caseloads of jobseekers across countries, it has also altered their composition, as some groups have been affected more by the current health and economic crisis than others (Chapter 1 and Section 3.1). This may result in traditional profiling tools used by PES – either digital or via caseworker assessment – becoming less accurate as they are dealing with unknown individuals. AI algorithms allow for rapid and consistent adjustment of profiling based on the new information on these individuals, meaning that services can be adapted and deployed at scale and with pace.

• Greater efficiency and increased “self-service”: The demands placed upon many PES by the rapid influx of new jobseekers mean that support had to be rationed, as there are fewer staff per jobseeker. The provision of virtual job coaching via the use of AI means that PES with this capacity can facilitate fast and accurate matching and job finding for individuals that are potentially easier to place in the labour market, reserving the support of case workers for those in greater need. This has potential benefits to both the efficiency and equity of PES services.

It is important to note that due to the relative infancy of PES offerings in the AI space, there is a scant literature of robust impact assessments. Therefore a crucial part of offering these services in the future will be to ensure they are evaluated and properly scrutinised alongside existing service provision. There is a trade-off between accuracy and equity in algorithmic assignment which may lead to unintended discrimination between individuals (Desiere and Struyven, 2020[30]) without proper consideration and discussion of risks. In the absence of complete information, some things that are observed (like ethnicity or socio-economic status) may be confounded with unobserved data (like motivation or intrinsic ability). It is likely that data underlying algorithmic assignments is insufficient to generate completely socially equitable outcomes, at least in the medium term. Therefore a human backstop is essential to review and monitor implementation of policy via these channels and rigorous evaluation conducted to support this.

To establish a productive AI capacity, PES need to bring together investment in data infrastructure and human capital. Data need to be set up and stored in a way that they are accessible to AI computations. An important element of this is having the right data available – requiring near-live data exchange across databases to provide comprehensive details, as well as up-to-date information across work history, skills, education, demographics and job-search. Furthermore, using big data is generally at the core of AI tools. For example, the “traditional” register data need to be linked to click data, so that information on time spent and navigation of available vacancies and training materials can be incorporated into algorithmic decision making. The requirements for data availability need to be coupled with the appropriate human expertise to utilise these data to develop a suite of AI capabilities. Agile developing methodology should be applied when advancing in digitalisation and AI, involving cross-functional development teams. In case IT expertise is outsourced, PES in-house experts need to collaborate closely with the external partners to develop tools that support well the content of service provision, as well as meet the data protection requirements. This all needs to be embedded within a tight ethical framework so that AI practices explicitly consider and protect outcomes for all PES clients.

Training will be vital to match workers to jobs

Effective training programmes will be essential to ensure labour supply adequately meets labour demand both in the shorter term, as some industries face immediate shortages, and in the longer term as firms and sectors adjust post-crisis. However, even prior to the COVID-19 crisis, many adult learning systems failed to match investments in training with labour market needs. Adults in jobs at high risk of being automated were 30 percentage points less likely to train than adults in safer occupations (OECD, 2019[42]). Only about 13% of firm-provided training was fully aligned with the strategic needs of the company. Additionally, not all training was aimed at reskilling workers, about one-fifth of training hours were taken up by compulsory health and safety courses (OECD, 2019[43]). Countries will need to improve the responsiveness of training to changing demand, to ensure they are in a good position to meet this immediate needs as well as those emerging in the medium term. This will rely on good co-operation between employers, providers, government agencies, social partners and policy makers to deliver for jobseekers, workers and firms alike. In addition to targeting training on jobseekers with low or outdated skills, PES are increasingly targeting and tailoring training programmes on employers needing to upskill their existing staff due to restructuring and new technology, or needing labour with specific skills not available on the local labour market, such as in Estonia (OECD, 2021[44]), Germany (Mosley and Dohse, 2019[45]), some regions in Italy – Friuli-Venezia Giulia and Trento (OECD, 2019[46]) – or Slovenia (OECD, 2016[47]; European Commission, 2016[48]).

The current deep and widespread crisis could be the occasion to scale up adult learning opportunities that facilitate labour reallocation from declining occupations and sectors to emerging ones, taking advantage of longer unemployment spells and periods of idleness in the context of short-term work schemes. Empirical evidence has shown that training programmes are particularly effective during recessions. In their meta-analysis of over 200 studies Card, Kluve and Weber (2018[9]) compare the effectiveness of different types of ALMPs over the business cycle. Of all the types of programmes studied – training, job-search assistance, private sector subsidies, and public works are examined – they find that the most positive effects tend to be associated with training programmes and private sector subsidies (which are discussed in Section 3.4.2). In their classification, the latter includes on-the-job or classroom-based training. The beneficial effects are particularly pronounced when examining outcomes beyond the short term, more than one year after the end of the training. In addition to this, training programmes can reduce inequalities resulting from job losses, as they tend to produce larger positive impacts for low-skilled and vulnerable groups (this is discussed in more detail in Section 3.4.3)

Expanding longer-term training programmes during recessions makes sense because of diminished opportunity costs. While enrolled in a training programme, participants are less likely to enter unsubsidised employment due to a combination of decreased job-search intensity and a diminished willingness to accept a job offer. Evidence of such lock-in effects is well-documented (e.g. Forslund, Fredriksson, and Vikström (2011[49])), but the associated costs are lower when job vacancies are scarcer. Evidence shows that firms’ job creation responses following a major reallocation shock lag behind the job destruction response by at least one year (Barrero, Bloom and Davis, 2020[50]), supporting the view that the opportunity costs of any lock-in effects may be lower in the current context. An additional argument for increased training is that recessions tend to be associated with periods of accelerated structural change entailing a reallocation of workers across industries and occupations, meaning that a large share of jobseekers may need to acquire new skills to become reemployed without incurring significant earnings losses (see also Chapter 1).

There are several arguments in favour of expanding short-term training as an immediate response to COVID-19, in addition to reviewing longer-term provision. Countries should enable and encourage jobseekers and workers to move from firms and sectors that operate below capacity to those that have expanded as demand shifts due to COVID-19. This could be supported through increasing the number of places and variety of short-term programmes, such as short vocational training, general and remedial training and internships, as well as training programmes tailored jointly with employers in acute need for skilled labour. For example, in July 2020 Ireland announced funding for an extra 12 500 places using its Training Support Grant, designed to fund quick access to short-term training or to renew or obtain professional certifications. This will facilitate the flow of workers to the sectors that need them most and provide capacity, ensuring workers have the skills needed to quickly assimilate in their new roles. In addition, COVID-19 has introduced pressures in some industries – notably health care – hence responsive and rapid provision of training is vital to meet demand. In Estonia, a collaboration between care homes, ministries, the Unemployment Insurance Fund and health care schools led to a road from recruitment to introductory e-training to being operational at work in only a few weeks. This provided care homes with needed labour force and gave opportunities to people whose job was affected by the crisis.

Similarly, in the short term, governments may also focus attention on those workers at risk of displacement. France provides two illustrations of policy interventions in this area. Firstly, it has sought to supplement its existing short-time work (STW) scheme with a training subsidy that was originally developed for firms undergoing structural changes. The FNE Formation fully covers training costs (OECD, 2020[51]) and government compensates workers for 84% of the gross wage but 100% if they participate in training (cf. Chapter 2 for more details). This encourages the productive use of time that may otherwise be lost due to the pandemic and may help to bring gains to productivity in the longer term. Secondly, the introduction of Transco in January 2021 provides funding for the re-training of workers at risk of redundancy; fully covering training costs for very-small and small to medium sized enterprises (or 75% and 45% of costs for larger firms with over 300 and 1 000 workers respectively). This will help to pre-empt potential disengagement from the labour market for workers in firms that are struggling due to the pandemic.

Acting early has proved effective prior to the current crisis. The Swedish Job Security Councils (Trygghetsråden) are a good example targeting workers at risk of collective dismissals, due to company closure or restructuring for technological or economic reasons (OECD, 2018[41]).The Councils have been relatively successful at placing workers in further training or sustainable employment. Along the same lines, the 2018 Australian Stronger Transitions Package targeted workers in five regions (it closed to new entrants in July 2020) which are impacted by structural change and hence where expectations of future employment opportunities are low. The package includes a set of tailored interventions that come into action before redundancies have taken place. Training measures include comprehensive skills assessments; job search preparation; resilience training; language, literacy and numeracy support; digital literacy training; exploring self-employment options and industry experiences (OECD, 2019[52]).

Shortening the average duration of programmes or introducing a modular format is another option for scaling up the provision of training, to accommodate demand for training in the near term. In addition, modular training programmes which take into account an individual’s prior learning allows the content of courses to be tailored to participants’ specific existing knowledge and interests. For example, Bruxelles Formation in Belgium (Brussels) have offered additional online training solutions with blended-learning modules that take account of trainees’ IT numeracy and IT equipment available to them. In the medium term, countries would need to ensure that training modules provide certificates that feed into the national qualification framework so that learners can cumulate courses and ultimately acquire a qualification.

Publicly subsidised training programmes should be responsive to employers’ needs. Many OECD countries conduct skills assessment and anticipation exercises that can guide their expenditures on adult learning investments (OECD, 2019[43]). To the extent that cross-sectoral imbalances in labour and skill demand persist as economies open up, countries will also benefit from further developing their skill assessment and anticipation, and skills profiling tools, as well as their career guidance systems, which can guide workers to the most efficient job transition (OECD, 2020[39]). Tools to support firms in clearly identifying skill needs are also important, particularly for SMEs. In Lombardy, Italy, the T.I.M.E. pilot programme (Training Innovation Management Experience) provides personalised counselling services to SMEs managers in order to guide them through the steps needed for an effective identification of their company skill needs and to plan adequate skill development programmes (OECD, forthcoming[53]).

One common challenge is co-ordinating the efforts across various private and public actors to streamline the decision-making and build a common evidence base (OECD, 2019[43]). In France, the Employment and Skills Network (Réseau Emplois Compétences) was created in 2015 to co-ordinate the parallel skills assessments taking place at the national, regional and sectoral levels, with participants sharing their experience, methods and tools. Estonia introduced a legal obligation in 2015 for stakeholder involvement in the governance of skills anticipation (Box 3.5). The System of Labour Market Monitoring and Future Skills Forecasting (Tööjõu- ja oskuste vajaduse seire- ja prognoosisüsteem called OSKA) incorporates five government ministries, social partners, education institutions, PES, researchers and experts from economic sectors to produce quantitative skill forecasts in specific sectors as well as qualitative insights.

In some countries (e.g. Austria, Belgium (Flanders), Estonia), additional income support or grants are available for training in occupations with shortages; other countries (e.g. Chile, Denmark, the United States) restrict publicly-funded training programmes to those identified as being in short supply in the local labour market (OECD, 2019[43]). It will also be important to consider the formal recognition of the qualifications of new jobseekers – including skills learned on-the-job so that employers can effectively fill vacancies with suitable candidates. Validation arrangements for formally recognising such skills are now in place in all EU countries, albeit with considerable differences in how broadly on-the-job skills can be recognised as a substitute for credentials otherwise obtained with formal education or training (Cefedop, 2019[54]).

At the same time, countries should be cautious about moving too strongly toward a “train-first”, rather than “work-first”, strategy. Investment in training tends to be more expensive than interventions offering job-search assistance (Martin, 2016[59]), increasing the stakes that public funds may be used inefficiently. In addition, high-quality training programmes take time to be established, and existing providers of high-quality services may find it difficult to rapidly expand capacity while maintaining a consistent level of quality. Countries may also lack the administrative capacity to monitor the quality or relevance of training provided by either public or private training providers, thus increasing the likelihood that such programmes are ineffective. As a minimum, countries may impose a minimum service quality requirement, such as achieving a basic client satisfaction score, to avoid instances of egregiously poor training. Setting up quality assurance for non-formal learning would take longer (OECD, 2021[60]) but quicker solutions could be envisaged. In 2014, France set up the Datadock system whereby training providers self-report along some key dimensions of provision quality. The system will be replaced by a fully-fledged quality assurance mechanism but has worked well in connection with training provided by the French Individual Learning Account (the Compte Personnel de Formation). Another option is to link a small proportion of fees to outcomes. For example, training funded by the Skills Funding Agency in the United Kingdom through the Adult Skills Budgets had 20% outcome-based component linked to employment of training participants (OECD, 2014[3]).

The current crisis has emphasised the need to boost digital skills

The crisis has highlighted that the continued development of online learning will be fundamental in the future of adult learning systems (OECD, 2020[61]). The nature of social distancing policies has sped up digitalisation trends and has put more primacy on the need for countries to invest in digital training and skills. Enabling jobseekers to conduct job search and training online allows greater immediate participation and provides benefits for future utilisation of this mode of delivery. It also allows for more efficient provision of training as content is easy to adjust and can be delivered to customers’ timescales and needs. As the previous section highlighted, it will be important to ensure equity in digital access, as the development of basic digital skills will be fundamental to ensure the returns to online learning are shared among the population.

Countries that had existing online training solutions have been able to adjust rapidly to continue training provision, particularly during the initial months of the pandemic (OECD, 2020[11]). In France, over 150 new training courses have become available online on the Emploi Store. In Estonia, the PES quickly developed e-learning for care workers who were in high demand during the crisis in conjunction with relevant stakeholders. The Dutch PES, which already offered webinars prior to the pandemic, has increased their frequency and capacity. They can now accommodate several hundred clients in a live session, with one PES staff member presenting and several others simultaneously answering questions in the chatroom (WAPES, 2020[62]). These responses during the crisis neatly demonstrate the virtues of flexibility and scalability that online training embodies and that broadening the range of courses can make online training more inclusive, opening it up to new professions and industries (OECD, 2020[61]).

During the pandemic, several online learning platforms have made their content freely available for jobseekers, including some major platforms offering massive open online courses (MOOCs). For example, the French national platform for MOOCs, France Université Numérique, worked in collaboration with partner institutions – including leading French universities – to freely offer its MOOCs to interested users (OECD, 2020[63]). MOOCs offer a particularly interesting proposition in the current context: they offer virtually unlimited participation in interactive courses, incorporating mechanisms such as peer grading to ensure scalability, and are commonly offered in short modular courses. Previously users were predominantly highly educated men, so communication will be important to increase uptake amongst jobseekers and the low skilled, and ensuring that women or other socio-economic groups are not excluded (OECD, 2019[64]).

Basic computer literacy training can allow low-skilled jobseekers to acquire digital skills that are now required in almost every occupation, as well as necessary for job search. Many countries have set up programmes targeting adults with very low ICT literacy skills (OECD, 2019[43]). Basic computer literacy training can allow low-skilled jobseekers to acquire digital skills that are now required in almost every occupation, as well as necessary for job search. Many countries have set up programmes targeting adults with very low ICT literacy skills (OECD, 2019[43]). For example, in the United Kingdom, low-skilled adults have access to fully funded digital skills programmes, similar to existing maths and English programmes. Greece provides ICT e-training for NEETs and vulnerable groups. The municipality of Ljubljana in Slovenia offers over 55-year-old citizens free modular computer literacy courses, 20-35 hours long and catering to those with differing initial computer skills. These courses can provide a stepping-stone for individuals to access additional resources online and offer direct benefits to PES, facilitating participation in online services to better match individuals to vacancies.

Portugal has introduced a comprehensive suite of digital training programmes, to equip its workforce with the skills needed to succeed in the digital age through its Activar.PT programme. It has worked with private sector stakeholders to quickly identify skills gaps and create accredited training programmes for unemployed young adults and vulnerable groups in a range of training paths. It has simultaneously introduced the Digital guarantee to ensure that by 2023 all unemployed people have a digital training offer suitable for their level of qualification and skills profile. These measures will provide individuals with the skillsets to flourish in a modern digital economy.

Stimulating labour demand through hiring subsidies and employment incentives

Time-limited, well-designed and targeted hiring subsidies can be a cost-effective way to reduce unemployment, strengthen the employability of workers and support the most vulnerable population groups (Kluve, 2010[67]; Brown, 2015[68]). What is more, such support is easier to scale up operationally than many other types of ALMPs. The challenge is to design programmes that reach the groups most heavily affected by the crisis, while ensuring that supported jobs do not displace ordinary employment and that take up by employers is sufficiently high. Although restricting the availability of these incentives to specific groups limits their use as a general tool to manage unemployment, good targeting of such measures makes it easier to ensure cost-effectiveness. Following the GFC, many OECD countries scaled up their employment subsidy programmes or targeted them more clearly at specific groups, such as long-term unemployed, persons with disabilities, youth, older workers, certain regions or sectors (OECD, 2010[69]). Over the course of 2020 and early 2021 nearly two-thirds of OECD and EU countries already scaled up (or are planning to do so) their employment incentives to stimulate labour demand – see Figure 3.9 and OECD (2021[13]) for information by country. While some countries introduced new schemes (e.g. Chile, Latvia, the United Kingdom), most countries increased the coverage of existing hiring subsidies. Some countries introduced subsidies in the form of reductions or waivers of social security contributions for larger groups, beyond the unemployed or inactive persons (see Box 3.6).

Well-designed and targeted hiring subsidies tend to have a greater positive impact on post-participation labour market outcomes than many other ALMPs (Kluve, 2010[67]; Brown, 2015[68]). However, to derive the net employment impact of employment subsidies, it is important to take into account their possible indirect effects, notably deadweight losses, substitution and displacement effects and efficiency losses. Deadweight loss arises when subsidies support the hiring (or retention) of certain workers that would have anyway been hired or retained even without the subsidy. Substitution or displacement effects arise when eligible workers replace otherwise similar but ineligible persons – see Brown (2015[68]) for a discussion of the indirect effects of employment subsidies and their net impact on employment. Efficiency costs arise when employment subsidies lead to higher wages than the workers’ productivity or to hires beyond the actual demand.

Targeting of employment incentives to groups in need and those who benefit the most from participation can help reduce deadweight losses and increase cost-effectiveness – e.g. Martin and Grubb (2002[70]) and Bernhard, Gartner and Stephan (2008[71]). Beyond their impact on net employment (which may be limited), these targeted hiring subsidies can be effective in promoting a more equal distribution of unemployment (OECD, 2010[69]). Recessions further justify the need for targeting of employment subsidies to prevent a disproportionate impact on disadvantaged groups and minimise the risk that these groups disconnect from the labour market. In line with these arguments, most OECD countries target employment subsidies to specific groups such as the long-term unemployed, youth, older persons and those with disabilities and may make them available for new hires only. Moreover, targeting subsidies to the unemployed reduces the total cost of the programme by potentially reducing public expenditure on unemployment benefits or other benefits. Although tight targeting is important to increase the effectiveness of employment subsidies, it can also lead to stigmatisation of participants, who are perceived as low-productivity workers (Brown, 2015[68]; Burtless, 1985[72]).

To avoid displacement effects and ensure positive net employment effects, some programmes provide the subsidy conditional on increases in net employment at the firm level to ensure beneficiaries do not displace other workers (Boockmann, 2015[73]). These stringent conditions, as well as the heavy monitoring which is sometimes attached to hiring subsidies, might deter employers and lead to low participation by employers (Burtless, 1985[72]; Neumark, 2013[74]), particularly when the amount of the subsidy is relatively small. However, the level of bureaucracy could be set off by enhancing use of administrative data and digitalisation. For example, the Estonian PES administers employment incentives by using near-live data from the Tax and Customs Board, freeing employers using the scheme from monthly reporting.

Among the 28 countries that expanded existing or introduced new hiring subsidies in response to the COVID-19 crisis, 12 use these measures especially to support the employment of young jobseekers (Australia, Chile, France, Greece, Hungary, Ireland, Korea, Luxembourg, New Zealand, Portugal, Romania and the United Kingdom) or the long-term unemployed (Flanders and Wallonia regions of Belgium), Greece, Hungary, Korea, Portugal and Sweden). Other target groups include people with disabilities (Chile and France), older unemployed (Portugal and Romania) and other disadvantaged groups (e.g. Māori in New Zealand and victims of the armed conflict in Colombia). Some of these measures are still available, while in some countries the measures only covered a short period of time (OECD, 2021[13]).14

Using public works as transitional support to the most vulnerable

The effectiveness of direct job creation programmes,15 such as public works, in bringing participants back to open market jobs is questionable.The meta analysis of the literature by Card, Kluve and Weber (2018[9]) finds that these programmes are generally ineffective in the short, medium and longer term. This may be why Denmark, Estonia, Israel, Norway, and Switzerland do not use public work schemes as part of their ALMP mix. Moreover, many countries that have such programmes have reduced their spending on direct job creation programmes relative to other types of programmes. The relative expenditure on direct job creation has fallen in six out of ten countries between 2008 and 2018 and a higher share of these countries’ ALMP budget is now spent on other ALMP categories. In the remaining countries, the relative expenditure on public work schemes has increased over the same period.16

Although these schemes are not effective in bringing people back to open market jobs, they may be useful in times of crisis to provide some complementary income to vulnerable households, build local public infrastructure, services and social capital (ILO, 2020[77]). However, they should be targeted on very disadvantaged groups, of temporary nature and well integrated in broader strategies to address unemployment. Following the rise in (long-term) unemployed in the aftermath of the GFC, many OECD countries scaled up their public works programmes to reduce unemployment and some introduced programmes for a limited amount of time. Responses to the OECD/EC ALMP questionnaire show that around a third of OECD and EU countries introduced or expanded direct job creation programmes since the start of the COVID-19 crisis. Hungary, Ireland, Luxembourg and Slovenia have allocated additional budget to existing schemes to create additional jobs. In Japan, New Zealand and Spain jobs are created mainly by regional and local levels of government.

Start-up incentives to support prospective entrepreneurs and keep existing start-ups going

Over the course of 2020, the primary concern for countries has been providing support to existing self-employed who often could not continue their activity or could only partly continue their activity because of lockdowns or sickness (OECD, 2020[78]). Given the specific circumstances SMEs and self-employed are facing, countries have put in place special measures to support them. The most widely used instruments in response to the outbreak were income and profit tax deferrals, loan guarantees and direct lending to SMEs, and wage subsidies (OECD, 2020[18]). In the Netherlands support for the self-employed moved to the next phase as of January 2021 to prepare those benefitting from government support for a new future, either as an independent entrepreneur or as an employee. Municipalities will work with independent entrepreneurs to identify whether and what support the self-employed person needs and provide them with coaching, advice, further training or retraining and reorientation. In 2020, Lithuania introduced extra support for self-employed individuals who recently profited from its targeted start-up incentives.

Beyond support for existing self-employed about four in ten OECD countries17 run start-up incentives programmes that promote entrepreneurship by encouraging the unemployed and other target groups to start their own business or to become self-employed. Evaluations of start-up incentives in OECD countries suggest that these programmes can reliably create employment options where few others are available, including in the long-term – see for example Wolff and Nivorozhkin (2012[79]), Caliendo et al. (2016[80]), Caliendo and Künn (2011[81]), Wolff et al. (2016[82]). About a fifth of countries expanded start-up incentive programmes targeted on unemployed and other disadvantaged groups in response to the COVID-19 crisis (OECD, 2021[13]). For example, Australia, Belgium (Brussels and Flanders), and Estonia adjusted their existing start-up incentive programmes through increasing the financial support available to jobseekers starting their own business. Sweden extended the duration of an existing programme and the Slovak Republic introduced a new start-up incentive programme called Work, change your life. Portugal introduced Empreender2020 a national competition for start-up projects launched by young unemployed people. Successful applicants receive advice and technical training during the first year of their start-up.

PES need to provide individual comprehensive support to vulnerable groups throughout the labour market integration pathway

It is crucial to continue supporting the most vulnerable groups during the COVID-19 crisis, as preparing them for labour market integration takes time. Addressing their employability now increases the chances that the vulnerable groups become ready for labour market integration when the economies start to recover and employers’ needs for labour increase. The labour market inclusion pathways can involve many of the different ALMPs discussed in the previous sections of this chapter, such as training to increase digital skills to make the person able to look for job, followed by job search assistance, and potentially employment subsidies. As the most vulnerable groups face often very specific or even multiple obstacles, it is important to provide them with individualised support, and at times even tailor-made support, to meet their complex needs. This often involves a step-by-step approach which relies on the co-operation between institutions and policy domains, as other types of services (social, health, education, childcare, housing and beyond) as well as social protection measures and benefits might be needed before as well as during ALMP provision to tackle the social integration obstacles more generally (Figure 3.10). For example, a key initiative 1 jeune 1 solution in France addressing COVID-19 challenges in the labour market and targeting youth living in disadvantaged neighbourhoods, aims to offer youth a comprehensive package of ALMPs to address their individual obstacles, involving recruitment support, apprenticeships, employment incentives, training and beyond. Canada’s Opportunities Fund for Persons with Disabilities programme uses an “escalator” model outlining the different steps and interventions needed for labour market integration.

Figure 3.10. Key features of successful programmes for vulnerable groups

The first step in the labour market integration pathway is identifying the people in need of support and their challenges. Using administrative data (particularly using personal data) can make the support to vulnerable groups more effective and efficient, but also requires cautious practices to comply with data protection regulations:

• The key to improving employment support to vulnerable groups is a better understanding of which groups are not contacting PES (or other relevant institutions) and receiving support and why, the labour market obstacles they face and how well the ALMPs provided to these groups match with their needs. It is crucial to identify people that are only marginally attached to the labour market and whose labour market situation could be improved by ALMPs, as well as those who should be supported with social, health or education services first. Analysing linked administrative data from different registers is best suited to generate the relevant knowledge (see OECD (2021[44]) for a recent example of such work in Estonia).

• As vulnerable groups are often less likely to contact PES themselves (e.g. see Figure 3.2 on youth), it is important that PES make more efforts to proactively reach out to these groups. While the channels to personally reach out to them tend to be limited for the PES, co-operating with other providers of public services and NGOs can be effective. Furthermore, using administrative data can enable the providers of public services to track people who could need support, but do not contact any of the institutions (for example, practiced in Estonia to reach out to young people not in education, employment or training).20

• Among the clients that PES establish contact with, it is necessary to identify the vulnerable groups and their needs early. Quantitative profiling tools using administrative (and survey) data can be effective and efficient tools to identify the clients needing additional support as well as target the ALMPs more effectively, which is particularly important in times of high inflows of clients and limited staff numbers. These tools are used today by more and more PES, and are most advanced in Australia, Belgium (Flanders), Estonia, the Netherlands and the United States (Desiere, Langenbucher and Struyven, 2019[32]).

For some vulnerable groups, one step on the pathway to labour market integration can be sheltered or supported employment or some other type of support involving the social economy, although the effectiveness of these programmes is highly dependent on their exact design. In Portugal, the involvement of the social economy is one of the elements in the strategy to respond to COVID-19 approved in June 2020 (ATIVAR.PT), foreseeing a co-operation between local authorities, the social economy and other local actors to identify and refer the most disadvantaged people to jobs and training programmes.

Sheltered and supported employment should only be provided simultaneously with training and mentoring and still aim at the integration into the primary labour market in the longer run to be effective, such as done already for many years in Austria, where the PES co-operates with a wide network of companies that pursue a social mission (Hiebl, 2020[86]).21 A French experiment implemented since 2016 called Territories of zero long-term unemployment provides a framework for local communities to create jobs in the social economy for the long-term unemployed (TZCLD, 2020[87]), although this scheme does not (yet) provide effective and efficient outcomes according to interim impact evaluation results as its targeting is too wide and it does not have sufficiently strong training and counselling components (DARES, 2019[88]). A new experiment involving the social economy launched in Austria partly as a response to COVID-19 at the end of 2020 (University of Oxford, 2020[89]) addresses the vulnerable groups’ needs for training, counselling and social services better than the French scheme, but does not target only the most vulnerable either.

Once a vulnerable person has successfully entered the primary labour market, they might need continued support from PES (involving contracted private providers, social services and other types of service providers if needed) to stay in employment. The positive evaluation results in Germany (Staible, 2017[90]), and Denmark and France (Scharle, Weber and Puchwein Roberts, 2014[91]) of post-placement support and counselling to vulnerable groups has inspired Estonia’s strategy to tackle COVID-19 challenges. Since the beginning of 2021, Estonia has introduced systematic follow-up support to groups at risk of rapid return to unemployment due to health limitations, lack of work experience, previous long-term unemployment or other labour market integration obstacles. Case managers in the Estonian PES continue counselling during the first six months of employment, keeping in touch with the client as well as the employer and, when necessary, involving the local social workers or other service providers (Sotsiaalministeerium, 2020[92]).

In addition to ALMPs, vulnerable groups need often comprehensive integrated approaches involving social, health, education measures and beyond. Nevertheless, achieving co-operation and integration of services to support vulnerable groups holistically is often very cumbersome. A Eurofound (2017[93]) study among EU countries shows that poor co-ordination of employment and other services tends to be one of the key issues limiting effective support to people furthest from the labour market, which can be exacerbated when the responsibilities for the services lie in different levels of governance. Even if services are formally integrated to one-stop-shops, their success is largely determined by co-operation practices and data exchange. The results of integrated employment and social services have been successful in the Basque county in Spain as it was possible to establish a common IT platform enabling proper data exchange, although establishing this took years (Gago, 2019[94]; OECD, 2020[95]). A Finnish experiment to move PES counsellors to municipalities was found to produce good results as well, but only because the capacity and financing available for ALMPs had increased (Arnkil, 2019[96]; Scharle et al., 2018[97]). Nevertheless, Finland continues with experiments (although with some delay due to COVID-19) to provide integrated services and has allocated additional resources for these experiments targeting youth, immigrants and long-term unemployed as a part of the strategy to tackle COVID-19 challenges (Ministry of Economic Affairs and Employment, 2020[98]).

When the institutions providing employment services or those providing social services are well-developed and have high capacity, platforms for co-operation practices and (virtual) one-stop-shops could be envisaged without changing the overall institutional set-up. These practices are successful when all parties have a willingness to co-operate and the necessary funding to do so. Practices based on voluntary co-operation between employment and social services have been tested in many countries, such as Belgium (Flanders), France, Slovenia and Sweden. For example, France has been successful with its initiative l’accompagnement global targeted on people with multiple labour market obstacles registering with PES, introduced in 2014. Jobseekers benefitting from this programme are supported by a PES caseworker and a local social worker. While the PES caseworker identifies the labour market obstacles and sets up an individual action plan to find employment, the social worker addresses social problems, related to housing or financial difficulties. The impact evaluation results indicate that the programme increases the probability to find stable employment within six months after entering the programme by 27% (Pôle Emploi, 2018[99]).

As the vulnerable groups generally need more activities to reach out to them, networking with other institutions, intensive counselling and motivation, and more follow-up support than other groups, their successful integration into labour market requires more attention by employment counsellors. Furthermore, while many processes in PES can be automated and digitalised to increase efficiency, counselling vulnerable groups is one field that still requires more interaction and face-to-face meetings with PES counsellors, also due to the often lower digital skills and/or more limited access to internet and devices among the vulnerable groups. Several PES, such as in France, Luxembourg, Korea and the United Kingdom, plan to hire additional staff particularly dedicated to implementing programmes for specific vulnerable groups in 2021 within their response to COVID-19 challenges (see Section 3.3.1).

Financial difficulties and mental health problems need particular attention in the aftermath of COVID-19

The health and economic crisis caused by COVID-19 has particularly amplified two labour market integration obstacles that PES together with other service providers need to address – high debts and mental health challenges. Both of these can severely constraint jobseeker’s capacity for job search.

Although countries across the OECD have made more efforts to secure incomes during this crisis than any previous crisis by providing more generous job retention schemes or unemployment benefits (see Chapters 1 and 2), many households have seen their income fall significantly. For example, the income of a third of new claimants of Universal Credit in the United Kingdom was almost twice as small in January 2021 as the pre-COVID-19 level, with a fifth of households not being able to pay their essential bills on time, and a third having higher debts than a year before (Brewer and Handscomb, 2021[100]).

Only a few PES have more elaborate approaches to support jobseekers with high debts, most notably (ranking by how well debt relief is integrated in PES services) Austria, Norway, Estonia, the Netherlands, Germany and Finland (Sol, 2016[101]). These approaches can involve training counsellors to detect labour market integration barriers related to financial difficulties and debts, guidelines for counsellors about how to address these challenges, services for jobseekers to address the challenge (e.g. debt counselling), counselling to employers who hire jobseekers with financial difficulties, as well as measures to prevent debts among jobseekers. Nevertheless, regardless how developed the specific services to address debts are by the PES, other national and local level providers are often available to provide additional services to jobseekers to relieve the financial distress. Thus, it is crucial that PES are able to detect the needs for additional support and co-operate with other providers who might provide complimentary or more suitable services.

Subsequent to the COVID-19 outbreak, PES clients are particularly at risk of mental health challenges. Joblessness can have negative effects on health, particularly mental health in any economic situation – see an extensive meta-analysis by Paul and Moser (2009[102]). A global health crisis together with restrictions on social interaction and activities can further elevate the rates of stress, anxiety and loneliness, as well as increase alcohol and drug use (WHO Europe, 2020[103]). At the onset of the COVID-19 crisis, the incidence of mental distress and mental health conditions increased significantly across the OECD (OECD, 2021[104]).

PES can have a critical role in identifying early mental ill health (OECD, 2015[105]), as they often are the first public institution newly laid-off people are in contact with. PES counsellors need to consider that mental health poses a significant barrier to finding employment, and is a crucial risk factor to long-term unemployment. While mandatory participation in psychological counselling as benefit conditionality is contraindicated, PES case workers’ role can be advising their clients to get counselling in case they see a need. As outlined in the OECD Recommendation of the Council on Integrated Mental Health, Skills and Work Policy (OECD, 2015[106]), awareness and understanding of mental health issues among caseworkers is key to ensuring that appropriate and timely mental health support is available to jobseekers experiencing mental health issues. Regardless whether PES provide psychological counselling in-house or not, PES need to direct the people to the service providers, e.g. social service providers, health service providers, providers outsourced by PES or providers in-house in the PES. The take-up of mental health support might be higher if it can be provided more discreetly and the client can choose the provider. For example, the Estonian PES allows the clients to choose the specific provider for psychological, addiction or debt counselling from a list of accredited service providers since 2021 (Sotsiaalministeerium, 2020[92]). This would enable also people from small communities to choose a provider further away, ensuring more anonymity, which may be crucial in the context of widespread stigma against individuals experiencing mental health issues. Finland rolled out one-stop-shops for young people involving a wide range of professionals in 2018 (Savolainen, 2018[107]). The key staff are youth and employment counsellors from PES and social workers from municipalities, but also psychologists, nurses, outreach workers and education counsellors. In 2021, the Finnish Government is investing further in these youth centres, particularly aiming at boosting mental health services for the young and start providing short-term psychotherapy (Ministry of Economic Affairs and Employment, 2020[98]).