4. Outreach activities and targeting of active labour market policies by the Estonian Unemployment Insurance Fund

The system of ALMP provision has significantly improved in Estonia over the past decade. The incentives for the jobseekers to contact the Estonian public employment service (EUIF) have increased, the EUIF has increased its efforts to advertise its support, expenditures on active labour market policies (ALMPs) have increased, the package of ALMPs has been revised to match the labour market needs and the EUIF has developed strategies to network with other institutions to support the clients holistically. As of 2018, the share of jobseekers in contact with the public employment service and expenditures on ALMPs in Estonia are similar to the OECD average levels. Nevertheless, discrepancies in the capacity of different institutions can potentially cause some gaps and overlaps in the overall support provided to people weakly attached to the labour market. The most critical link in the system are the municipalities, which have the greatest potential to be close to the people in need, but often fail to do so.

The next section of this chapter discusses the outreach to people in need of ALMPs, such as the incentives for the people to contact the EUIF, as well as the activities of the EUIF to reach out to the potential clients. The subsequent section assesses the strategy of ALMP provision in Estonia, including the general composition of the ALMP package and ALMP targeting. The last section discusses networking and co-operation practices between the providers of employment, health and social services to provide holistic support to the people in need.

Public employment services need to reach out to the people with weak attachment to the labour market in order to be able to support these groups. First, this section analyses, which incentives are in the Estonian system for the people in need of support to get in contact with the Estonian Unemployment Insurance Fund (EUIF). Second, the outreach activities of the EUIF are reviewed.

Slightly more than half of all unemployed people were registered with PES in Estonia in 2018, a share 10 percentage points lower than the respective OECD average (Figure 4.1). Among countries for which data are available, only six report lower values than Estonia, most notably Iceland (36%), Latvia (35%) and the United Kingdom (26%). At the other end of the spectrum, Belgium reports the highest level in the OECD, reaching 86%.

Conversely, the share of unemployed people who use public employment office services to look for a job is on a similar level in Estonia as the OECD average. In 2018, 54% of jobseekers participating in the Labour Force Survey contacted PES in Estonia to get assistance in seeking work over the past four weeks before their survey interview, against 53% on average in the OECD.

Taken together, these two findings suggest that while comparatively fewer unemployed people register with PES, those who register are in close contact with the employment office to receive help in finding a job. Legal requirements can partly explain this pattern. According to the legal regulation, an unemployed person who registers with the EUIF is required to maintain a regular interaction with the EUIF, generally at least once a month. In many other countries, activation requirements are less strict (see e.g. (Langenbucher, 2015[1])). Nevertheless, the findings also indicate that once a contact between the EUIF and a jobseeker is established, the EUIF is there and has the capacity to support the jobseeker in their job search.

International evidence as well as economic theory (the job search theory) show that although the main purpose for jobseekers to register with the public employment service should be to get support to improve their employment prospects, passive labour market policies and other benefits significantly increase jobseekers’ motivation to register and stay registered with the employment service. On the one hand, the receipt of benefits causes disincentives for the jobseekers to leave unemployment registers and take up jobs (see e.g. Mortensen and Pissarides (1999[2])), underlining that PES needs to nudge jobseekers to active job search. On the other hand, the possibility to access unemployment benefits from PES encourages people in need to get in contact with the PES. Therefore, the PES has better possibilities to engage more people in job search, including people whose initial motivation was not (re-)entering the labour market.

Unemployment benefits are not very generous in Estonia (Laurimäe et al., 2019[3]; Leetmaa et al., 2012[4]), which explains at least partially the somewhat lower share of jobseekers registering with PES compared to other OECD countries. Only about half of registered unemployed (27% of all jobseekers) receive unemployment benefits (unemployment insurance benefit or unemployment allowance, Figure 4.2). Taken together, unemployed who are not registered with the PES (48%) and registered unemployed receiving no benefits (25%) make up for almost three-quarters of unemployed jobseekers.

Regardless of low generosity of the unemployment benefit system in Estonia, benefits cause significant disincentive effects, i.e. jobseekers are reluctant to exit unemployment while receiving benefits (Lauringson, 2012[5]). Furthermore, a study by Espenberg et al. (2014[6]) indicates that unemployment benefits encourage jobseekers to register with the EUIF as they feel that they deserve receiving benefits, having paid previously unemployment insurance contributions. As the generosity of unemployment benefits has increased over time in Estonia due to maturing (more people are entitled to benefits, and for longer potential benefit periods) and due to regulatory changes (e.g. the increase in the benefit replacement rate in 2020), more people have incentives to register with the EUIF.

The Work Ability Reform, which has been implemented from July 2016 onwards,1 has induced a major change in the incentives to register with the EUIF, in particular for people with reduced work ability. First, the support to people with reduced work ability has been significantly strengthened. New ALMPs targeting this group were designed, funding of ALMPs increased and service concepts changed to meet the needs of this group better. Second, the fact that the payment of work ability benefits is linked to registering with the EUIF creates a strong financial incentive to establish a contact with the EUIF. The introduction of the Work Ability Reform is potentially the main reason that the share of registered unemployed with reduced work ability among all registered unemployed has grown from 14.9% in December 2015 to 31.4% in December 2019 (data from Eesti Töötukassa (2020[7])).

Furthermore, subsistence benefits can be an incentive to register with the EUIF. Although the responsibility for granting subsistence benefit lies with the municipalities, not with the EUIF, municipalities can take the registration with the EUIF into account when they decide on granting benefits. More precisely, municipalities can refuse to grant subsistence benefits or only grant reduced benefits in case working-age benefit applicants, or one of their household members, are out of work, but do not register with the EUIF (Social Welfare Act § 134). Municipalities can also apply such penalties if applicants or their household members do not comply with the activation criteria set by the EUIF (i.e. do not fulfil the individual action plan or refuse a suitable job offer).

Since January 2007, health insurance is granted for registered unemployed, which is thus an additional motivation to register with the EUIF. For example, in the first quarter of 2007, the increase in registered unemployment was faster than the increase in unemployment according to the Labour Force Survey, most likely due to the extension of health insurance coverage. On the one hand, health insurance can be an incentive to contact the EUIF in particular for people who are furthest from the labour market and are not entitled to unemployment benefits. On the other hand, this set-up can give rise to an increased risk of abuse of the system, as even people who do not need EUIF support may register to gain access to health insurance, e.g. workers in the shadow economy or spouses of wealthy partners with no motivation to become employed (Espenberg et al., 2014[6])).

In addition to incentives to contact the EUIF due to benefits, health insurance and general support to find (better) employment, some groups might contact the EUIF hoping to receive specific ALMP, such as training or a business start-up subsidy. For example, this may be the case for the financing of drivers’ licences (particularly category C; Espenberg et al. (2014[6])), which have always been one of the largest groups of training programmes among the short training programmes covered by the EUIF (see e.g. Lauringson et al. (2011[8]), Eesti Töötukassa (2020[9])).

In certain cases, people who might be interested in registering with the EUIF cannot do so due to the eligibility criteria set in the Labour Market Services and Benefits Act. For example, people enrolled in the education system are generally not eligible to register with the EUIF, unless they are entitled to unemployment benefits or are on academic leave. People receiving early-retirement pension are not eligible to register as unemployed either. Nevertheless, these groups can register as “jobseekers”, for whom the support provided by the EUIF is somewhat restricted compared to those with the status of “unemployed”. In addition, some ALMPs do not require any previous registration with the EUIF, such as career counselling and information, the employment subsidy for minors and unemployment prevention measures.

Although people in retirement age could be an important reserve for the labour force, especially against the background of a shrinking working-age population, they have fewer incentives to contact the EUIF. While they can register with the EUIF as jobseekers (but not unemployed) and are eligible for some ALMPs, such as job mediation, training and business start-up subsidies, they are not eligible for unemployment benefits and do not need to register with the EUIF to get health insurance, as health insurance is universally granted to pensioners.

Traditionally, the EUIF strategy has focused on jobseekers and employers as its main client groups. Over the years, the focus has widened and now includes the support of employed people in maintaining their jobs or changing jobs (Estonian Unemployment Insurance Fund, 2015[10]). The latest EUIF strategy for 2020-23 (Eesti Töötukassa, 2019[11]) highlights, in addition, the importance of encouraging inactive people to look for a job with the support of the EUIF and its partners, as well as supporting young people in school in the smooth transition from school to work. The latest EUIF strategy is also the first one highlighting specifically the need to support people with care responsibilities, people in retirement age and people with no Estonian language skills. These strategic changes are largely driven by the Work Ability Reform, the new package of ALMPs aiming to prevent unemployment and the reform concerning career services in schools (implemented in 2019). Nevertheless, the EUIF strategy for 2020-23 does not state specific activities to reach out to these new groups as the focus lies on providing the most appropriate ALMPs once a person is in contact with the EUIF. The EUIF key performance indicators focus on more and better jobs for the EUIF clients, filling vacancies and client satisfaction. Conversely, there are no targets for EUIF outreach.

Regardless of not setting targets for outreach in its strategy, along with wider client groups and new ALMPs, the EUIF has increased its efforts to advertise its new activities and policies in practice. A wide-scale marketing campaign promoted the new ALMPs targeting employed people in 2017 (re-enforced in 2019), aiming to prevent their unemployment. This campaign involved promotion through social media, radio, TV, billboards, newspapers as well as the EUIF webpage. These activities likely contributed to increasing the take-up of these ALMPs, although the levels are still slightly lower than expected (Eesti Töötukassa, 2020[9]). Also during the COVID-19 crisis, social media and the internet continue to be the main channels to advertise EUIF services, such as advertising the online counselling possibilities of the EUIF and organising webinars to provide skills and knowledge for job search.

Concerning the Work Ability Reform, the EUIF did not focus on advertising its services and measures, but on ensuring that the affected groups were well informed. The information about the reform, its objective and the process of its implementation were also disseminated by other organisations involved, above all by the Ministry of Social Affairs (SOM). In addition, the organisations representing the interests of people with reduced work ability were tightly involved in designing the Work Ability Reform, contributing to informing these client groups about EUIF activities. As a result, people with reduced work ability started to use EUIF services more actively already before the first step of the reform was implemented in July 2016. In 2013, the share of people with reduced work ability among registered unemployed was 6.3%. This share started to increase fast along with the discussions on the reform, reaching 18.4% in June 2016, just before the implementation of the reform.

A successful tool for advertising the activities of the EUIF is its co-operation with the Estonian Public Broadcasting. Different TV programmes have been broadcast in co-operation with the Estonian Public Broadcasting highlighting above all key labour market issues and EUIF priorities, such as supporting people with reduced work ability or supporting people to find employment in general during the years of the Global Financial Crisis. The main contribution of the EUIF lies in identifying relevant and interesting cases to show in these programmes.

In addition to generating a general awareness of EUIF support, the EUIF has specific activities to reach out to people in need. A specific practice to reach out to people further from the labour market is organising mobile counselling (so-called MOBI, see Eesti Töötukassa (2017[12])) about twice a year in each county, in co-operation with other relevant stakeholders (municipalities, schools, representatives of different interest groups and organisations). Although the main objective of MOBI is disseminating information on the EUIF support and labour market prospects, this activity also enables the EUIF counsellors to meet people in more distant locations and encourage them to look for a job or get support from the EUIF. Another EUIF activity to reach out to specific people in need is through the rapid response service, within which the EUIF counsellors go to workplaces where a collective redundancy is about to take place, to support people already before they become unemployed. A pro-active approach concerns also people about to be released from prisons and prisoners who are allowed to exit the prison premises for work reasons. Both of these groups receive work-focussed counselling from the EUIF counsellors. Furthermore, due to the reform in career services, the EUIF has better opportunities to support young people in their transition to the labour market now, in particular by providing counselling in schools. A further opportunity to reach out to people is through the Job Fairs organised by the EUIF. Nevertheless, as the objective of these events is above all to facilitate employers and employees meet, they are organised in economic centres of the country, and the attendees are typically already close or well attached to the labour market.

In addition, the EUIF co-operates with many other organisations to understand the needs of the people these organisations represent and disseminate information on its activities. Furthermore, the EUIF case workers network with other organisations, such as municipalities, concerning the individual needs of jobseekers, once a jobseeker is in contact with the EUIF. Specific activities to reach out to people in need are more commonly conducted by social workers in the municipalities or for example youth pop-ups (a network of youth centres) for young people.

Overall, the EUIF has made significant effort to create awareness about its possibilities to support people in getting (better) jobs. Nevertheless, not all vulnerable groups have been targeted yet and not all new packages of ALMPs have been advertised more widely. For example, information on the extension of ALMPs to people in retirement age (since 2016) has not been extensively disseminated.

This section discusses the EUIF strategy of ALMP provision, comparing ALMP expenditures with other countries, assessing the general composition of the ALMP package and discussing the strategy to implement ALMP targeting. The detailed quantitative analysis of ALMP coverage and targeting is presented in Chapter 6.

Over the years, Estonia has boosted spending on active labour market policies. Spending on ALMPs in Estonia at 0.47% of GDP is close to the OECD average level of 0.48% in 2018 and the EU average of 0.51%,2 while spending on passive labour market policies (PLMPs) remains lower despite an increase over the years (0.41% of GDP in Estonia versus 0.64% in the OECD and 0.67% in the EU as shown in Figure 4.3). A considerable increase in ALMP expenditures was induced by the reform of the system in May 2009 when the EUIF took over the role of the public employment service. While the labour market situation has improved markedly over the past ten years (see Chapter 2) and the number of people potentially needing ALMPs has decreased, expenditures on ALMPs stayed on a similar level over several years and have significantly increased since 2016 (Figure 4.4), most notably due to the implementation of the Work Ability Reform (2016), the introduction of unemployment prevention measures (2017) and the career services reform (2019).

The low level of spending on passive labour market policies in Estonia is partly the result of strong employment outcomes, at least prior to the outbreak of COVID-19 (see Chapter 2), and of relatively low generosity of unemployment benefits. In the short to medium term, however, expenditures on both active and passive labour market policies are set to rise, most notably due to recent reforms in ALMP provision, a surge in job losses caused by the COVID-19 outbreak and an increase in unemployment insurance benefit levels in summer 2020 and in unemployment allowance in 2021. Those changes brought the benefit replacement rate of unemployment insurance benefit to 60% of previous wage during the first 100 days of unemployment from 50% previously, and the rate of unemployment allowance to 50% of the minimum wage of the previous year (from the previous rate of 35%).

In addition, labour market and social integration is supported by other measures and services, such as social, health and education services or measures to support entrepreneurship. Several of these services have similarities to ALMPs provided by the EUIF. Also other benefits are provided for the people that are weakly attached to the labour market, besides unemployment benefits (PLMPs). Most notably, the work ability allowance (administered by the EUIF) and the subsistence benefit (administered by municipalities) impose also activity and job search requirements for the beneficiaries.

Along with an increase in ALMP expenditures, the diversity of ALMPs provided by the EUIF has considerably increased to meet the individual needs of the jobseekers. While there were in total five ALMPs in place in 2005, the EUIF provides today over 50 different policies aiming to tackle different barriers of labour market integration. Annex 6.A in Chapter 6 presents the entire list of ALMPs, their objectives and volumes, except the reimbursements of social tax contributions for employers hiring people with reduced work ability as this measure is not considered to be an ALMP by the Estonian stakeholders and is thus not included in the microdata analysis in Chapter 6.

Over the recent years, a new range of ALMPs has been added, most importantly: i) policies to support jobseekers with partial work ability (such as peer counselling, work-related rehabilitation, sheltered employment, covering additional costs due to disability when travelling to work, etc.); ii) policies to prevent unemployment (mainly training measures targeting both low-skilled employees as well as employers whose employees need upskilling); iii) policies for geographical mobility; iv) regional policies in the North-eastern area and in the Southern regions (areas with worse labour market situation); v) career advice and counselling for groups beyond registered unemployed. There is also a service stream to meet the very specific individual needs of a jobseeker that requires a different approach or covering some necessary expenditures that the jobseekers is not able to cover themselves, going beyond the fixed set of policies. From March to June 2020, the EUIF implemented additionally a short-time working scheme to address the labour market consequences of the COVID-19 outbreak.3

The emergence of new ALMPs in the EUIF package is the result of a combination of the needs for new ALMPs (revealed in the process of supporting EUIF clients), political will and national strategies and reforms, as well as a lower capacity to provide certain services by other organisations. For example, debt counselling is not a traditional ALMP provided by PES and in the case of Estonia, this service should be provided by municipalities. Nevertheless, as municipalities often lack capacity to provide the service to those in need, the EUIF provides debt counselling in case the counsellor assesses that this would support the jobseeker in labour market integration. There are similar cases of a few other ALMPs provided by the EUIF, which involve aspects of labour market integration, but also include health and/or social service aspects (for example providing technical aids and equipment or addiction counselling).

Simultaneously, some ALMPs have been dropped from the package provided by the EUIF as their effectiveness has been considered insufficient (e.g. public work schemes). A few ALMPs have been dropped due to their low take-up. For example, the EUIF used to cover costs for caregiving during ALMP participation or during the first months of employment, but this measure was terminated in 2019.

In general, the composition of ALMPs in the package provided by the EUIF has a good potential to be effective4 and efficient5 integrating the EUIF clients into the labour market (Figure 4.4). Estonia spends on PES and administration (job-search assistance, job mediation, counselling services, etc.) more than OECD countries on average, which according to the evaluations in other countries (Card, Kluve and Weber, 2017[13]; Brown and Koettl, 2015[14]; Dar and Tzannatos, 1999[15]; Kluve, 2010[16]) tend to be the most efficient ALMP expenditures even if targeted to a wide group of jobseekers. A high share of ALMP expenditure goes on training, which has the potential to alleviate skill mismatches and up-skill the high share of low-skilled labour force on the Estonian labour market (see Chapter 2). In the past years, when the economic situation was good, the share of employment incentives (wage subsidies) has been low, targeting only people far from the labour market, which is also the recommendation coming from the international impact evaluations. The direct job creation schemes, which in other countries consist mostly of public works schemes and for which the empirical evidence is not showing positive effectiveness on employment outcomes (often even significant negative impacts have been found), are no longer provided in Estonia. Along with the Work Ability Reform, Estonia spends a large share of its ALMP budget on ALMPs targeting health obstacles (sheltered and supported employment, rehabilitation), which indicates that the ALMP package should also be supporting well jobseekers in greater difficulties or jobseekers with disabilities. Nevertheless, while the largest increase in ALMP expenditures during the last years concerns sheltered and supported employment and rehabilitation measures, 89% of this type of expenditures in 2018 covered the reimbursements of social tax contributions for employers hiring people with reduced work ability. This measure, however, does not address individual needs of jobseekers as all employers employing any person with reduced work ability are eligible for these reimbursements.

The detailed analysis using administrative microdata of how the specific ALMPs provided by the EUIF match with the needs of their clients is presented in Chapter 6.

The implementation of targeting ALMPs takes place in the EUIF above all within the process of work-focussed counselling. During work-focussed counselling, the counsellor and the jobseeker analyse the opportunities and challenges for labour market integration together, identifying needs for ALMPs to support labour market integration. It means that most ALMPs provided by the EUIF are provided upon the counsellors’ discretion (a decision that the jobseeker needs a specific ALMP) and jobseekers cannot self-select to ALMPs. The change in the concept from self-selection to counsellor discretion has been evaluated also to have increased effectiveness of the ALMPs provided by the EUIF (Lauringson et al., 2011[8]; HoPES, 2013[17]). Nevertheless, eligibility criteria are set on some ALMPs (e.g. by age, unemployment duration or work ability), meaning that not all ALMPs are available to be used by all the EUIF clients. Exceptional types of measures are wage subsidies and reimbursements of social tax contributions, for which employers will be always eligible in case the hired employee fulfils the eligibility criteria. Although self-selection does not take place 100% of times also regarding wage subsidy, because case workers also mediate the more vulnerable clients to employers directly and advise employers to use wage subsidies. In addition, general career services are open to everybody.

Work-focussed counselling is the keystone of support provided by the EUIF to help jobseekers in their individual pathways to work. For the majority of the EUIF clients, work-focussed counselling sessions take place at least monthly unless the person is assessed to be very close to employment and self-efficient or engaged already in an extensive ALMP. Work-focussed counselling is provided by all three tiers of counsellors (job mediation counsellors, case workers, disability employment counsellors), although the counselling sessions include additional elements for clients further from the labour market.

Work-focussed counselling helps detect the individual needs for ALMPs. The counselling sessions focus on creating a trustful relationship between the counsellor and the client, supporting a self-assessment of the client and an analysis of factors affecting job finding, supporting occupational decisions and setting goals, drafting the individual action plan, supporting the client with appropriate ALMPs and information, and monitoring the action plan and adapting it when necessary (Eesti Töötukassa, 2019[18]).

In addition to qualitative profiling in the framework of work-focussed counselling, counselling is supported by a digital tool since 2020 providing quantitative assessments on the jobseekers’ perspectives. Among other features, the digital tool profiles clients based on 60 different variables to estimate their probability of employment and probability of returning to unemployment in case they get employed, and thus the tool indicates the extent of support needed. In addition, the tool provides evaluations on the effectiveness of some groups of ALMPs that could be supporting the client. The tool allows counsellors to devote more time to actual counselling as it gives a quick overview of the client’s situation and proposes ALMPs.

Although the EUIF has generally a strong work-first6 strategy in place, a prioritisation of train-first approach has taken place for some client groups since 2017, having an impact also on detecting ALMP needs in work-focussed counselling. First, more emphasis is put on training along with implementing the package of unemployment prevention measures since 2017 (see Holland (2018[19])). Second, Estonian language courses and courses to increase digital skills are always proposed when the respective skills are low (in place since 2018). As such, Estonian skills, digital skills and vocational skills are always assessed during the first counselling sessions. Digital skills are assessed using the International Digital Skills Framework and Vocational skills are retrieved from the education register. For occupational skills, the assessments from OSKA methodology for skill needs are prioritised.

The EUIF invests a lot in the skills of its counsellors as referrals to ALMPs depend largely on counsellors’ discretion. It is key that counsellors are able to detect the needs for ALMPs correctly and on time. Training counsellors aims at ensuring a proper application of the work-focussed counselling methodology and using the digital means leading to effective provision of ALMPs and labour market integration of the EUIF clients. The counsellors receive training when they are recruited as well as refreshing courses later in the career, particularly when changes are implemented in the approaches and methodologies.

The training of work-focussed counselling is built largely on practical exercises involving individual and group work. The disability employment counsellors are additionally trained in CARe (Comprehensive Approach to Rehabilitation) methodology. Furthermore, the counsellors receive daily coaching by the leading senior counsellors, co-vision (regular meetings of people on similar tasks, led by one of the colleagues), needs-based individual supervision by external consultants and feedback through regular development and quality assessments by their managers. The profiling and counselling competencies are also improved through active learning groups, where first a counsellor chooses a counselling skill they want to improve, the lead counsellor job-shadows the counsellor and gives feedback on the use of the specific skill, and finally, the counsellor and the lead counsellor analyse how to improve the skill in the future (Saat, 2017[20]).

In addition, counsellors are tested on their work-focused counselling and profiling competencies and in the past, the quality of individual active plans used to be regularly assessed to enable improving their correspondence to the individual needs of the clients (Radik, 2016[21]).

The EUIF conducts each year at least one in-depth analysis of a specific policy or a group of policies involving counterfactual impact evaluation if possible (e.g. it is possible to define an adequate comparison group; see Eesti Töötukassa (2020[22]). The effects of key ALMPs are regularly evaluated by a digital impact evaluation tool and displayed on a dashboard for the counsellors to assist them. Furthermore, the EUIF has used randomised control trials to fine-tune its counselling approaches (Scharle and Márton, 2019[23]).

Evidence on effectiveness is supported also by the EUIF monitoring framework (Kraavi, 2018[24]; Lauringson, 2013[25]; Lauringson, 2015[26]). The EUIF has an elaborate performance management system in place, focusing on the reintegration of registered unemployed, ALMP coverage and customer satisfaction, which has shown good progress over the past years. The key performance indicators are disseminated publicly in the Development Plan (Eesti Töötukassa, 2019[11]) and the results in the Annual Reports (Eesti Töötukassa, 2020[27]). The monitoring framework continues to be improved. The latest revisions include adding a composite indicator in the performance management framework aiming to measure the overall value-added of the EUIF, which was developed in co-operation with the University of Tartu (Trumm et al., 2018[28]).

Impact evaluations are conducted also by other organisations (think tanks, research organisations), as procured by SOM (Anspal et al., 2012[29]; Masso et al., 2019[30]; Melesk et al., 2019[31]; Melesk and Michelson, 2019[32]; Kallas, Kallas and Anspal, 2018[33]; Balti Uuringute Instituut, 2017[34]). Generally, all new ALMPs are being evaluated as soon as there is a sufficient volume of observations and a possibility to define a comparison group to conduct the evaluation.

Both, impact evaluations conducted by the EUIF as well as external evaluations have shown that the ALMPs provided by the EUIF (such as training, apprenticeship programmes, wage subsidy programmes, business start-up subsidies, etc.) have been generally effective and cost-efficient. Furthermore, the assessments of the European Network of Public Employment Services (2016[35]) and (2018[36]) indicate that the business and operating models of the EUIF are effective and efficient.

People with weak attachment to the labour market need often support beyond ALMPs. This section discusses the approaches to holistic support, as well as potential gaps and overlaps in the service provision between the EUIF and other service providers.

Estonia does not provide different services and measures that a person might need to be integrated to the labour market and society as a one-stop-shop. There is no one single entry point to the system, in case a person needs not only to be supported by ALMPs, but also by social services, health services or education measures. As such, the person could contact any of the service providers they think they need and it is up to the service providers to understand if the person needs more extensive support also from other providers and direct them to the relevant institution.

To be able to network with other service providers in cases needed, the EUIF has implemented a three-tier counselling model:

  • Job mediation counsellors counsel those clients who are considered to be job ready and easy to be integrated to the labour market. The main tools used by the job mediation counsellors are job mediation and providing the clients with job search skills, although other ALMPs are also used in case needed. There are on average 220 clients (in 2019) in the portfolio of a job mediation counsellor, leading to about 22 minutes per counselling session.

  • Case managers counsel clients who have significant obstacles to enter the labour market, but their work ability is not necessarily reduced. The case managers have on average 140 clients in their portfolio (in 2019), leading to about 37 minutes per counselling session. A part of the working hours of the case managers is devoted to network with other organisations and service providers to provide the support to their clients more holistically (e.g. networking with social workers in the municipalities).

  • Disability employment counsellors are counselling clients with reduced work ability and with health limitations imposing significant obstacles to enter the labour market. The disability employment counsellors have on average 100 clients in their portfolio (in 2019), leading to about 54 minutes per counselling session. The disability employment counsellors have a significant part of their working hours devoted to reaching out to other organisations (e.g. social workers, health care workers) to find the suitable and holistic solutions for their clients. Furthermore, the package of ALMPs that the disability employment counsellors use, focuses more on ALMPs targeting obstacles connected to health (e.g. work-related rehabilitation, providing technical aids to support working, etc.).

In addition to reaching out to other organisations case by case, the EUIF head office and regional offices co-operate with other organisations to provide specific services (e.g. organising coaching for working life or job clubs together with municipalities, or providing career counselling in schools in co-operation with them). Furthermore, employers’ counsellors at the EUIF, whose main purpose is to support employers to find the labour force they need, have also dedicated working hours for networking activities. These activities can include helping to find suitable employment for people who have larger obstacles to enter employment i.e. in co-operation with case managers and disability employment counsellors.

Contrary to the EUIF, other service providers (municipalities, health care sector, Social Insurance Board, education sector) do not have elaborate concepts in place on reaching out to other providers when needed. Nevertheless, some segments are being tested (e.g. the concept of pathways for stroke patients led by the SOM), which have the potential to improve the situation in the future, preventing people to fall in the gaps of the system.

The most critical link in the system are the municipalities, which have the greatest potential to be close to the people in need, particularly in the smaller communities. Nevertheless, all the stakeholders in the system consider the municipalities to be unable to fulfil this role. Although some municipalities are exceptions, in general they lack capacity to support the people in need, partly also as social affairs are not sufficiently prioritised in the agendas and budgets.

A great initiative to support the municipalities in reaching out to the groups in need, is the Youth Guarantee Support System. This is a tool supporting the municipalities to reach out to young people aged 16-26 not in education, employment or training (NEETs) in their area and, if necessary, provide them with support for continuing their education or integrating to the labour market. The tool was initiated in 2016 by SOM, but implemented finally in 2018 as its full implementation needed changes in legislation to fully comply with the data protection legislation. The tool links data from nine registers to detect the NEETs and provides the data on the detected NEETs to the case managers in the municipalities. Subsequently, the case managers can follow up with the NEETs and also refer them to the EUIF if deemed necessary. However, only about half of the municipalities were using the Youth Guarantee Support System tool as of September 2019 and only about a fifth of municipalities used it continuously in 2019 (Pärg, 2019[37]).

Particularly people further from the labour market might need more complex support, as their labour market integration is dependent on addressing their more overarching obstacles to social integration. To support the effectiveness of the EUIF support and its core policies to its clients, the EUIF has started to provide services that have elements of social and health services. In some cases, this is driven by a low capacity of the institutions which should be providing social and health services. In addition, in some cases, the existing social and health services provided by other institutions do not target well the aspects of labour market integration, although the general objective of the measure might be similar.

Municipalities have generally rather low capacity to provide employment and social services, above all as the priorities of their expenditures lie often in other areas. Out of the 13 social services that the municipalities are responsible for, four of them are provided in some form also by the EUIF as ALMPs (two types of support person services, support with transport in case of health obstacles, debt counselling).

The volume of policies of the EUIF with elements of social and health services has increased particularly in the framework of the Work Ability Reform (both in terms of ALMP types and numbers of participants) as the profile of the EUIF clients changed considerably and the EUIF (as well as the Social Insurance Fund) received a substantial budget increase from the ESF resources to support the people with reduced work ability. Nevertheless, some policies having social or health elements were there already before, such as psychologic counselling or adapting the premises of a workplace to meet the needs of a person with reduced work ability, although the use of these policies was lower before the reform.

The Work Ability Reform might have theoretically increased duplications of service provision across the EUIF, the Social Insurance Board, the Health Insurance Fund and the municipalities. For example, after the reform, three types of rehabilitation are provided in Estonia – work-related rehabilitation by the EUIF (a new policy), social rehabilitation by the Social Insurance Board and Astangu Vocational Rehabilitation Centre, medical rehabilitation by the Health Insurance Fund. Although the objectives are slightly different (integration to working life, integration to society, recovery of health), they tend to have overlapping components. On the one hand, this might cause duplication of services and confusion among the people in need of rehabilitation. On the other hand, this can cause gaps in service provision in case one institution expects the other organisations to fill also its role. Similar potential (although theoretical) overlaps concern also technical aids and equipment, support person services, support with transport in case of health obstacles, debt counselling and addiction counselling.

Some duplication of ALMPs and related services can be caused also by the so-called Open Calls Projects (ESF 2015-20, Priority 8.1, activity 3.2.1) that SOM uses to outsource ALMPs to other providers than the EUIF, targeting disadvantaged youth, people aged over 50, long-term unemployed and other vulnerable groups. These providers implement similar ALMPs as the EUIF, such as short-term training programmes, work practice or support person service and their value added compared to the ALMPs provided by the EUIF is not quite clear (Riigikontroll, 2016[38]). In addition, some municipalities provide ALMPs like coaching for working life or work practice, at times in co-operation with the EUIF.

Some duplication exists also between ALMPs and education measures concerning short-term training programmes. Above all, this concerns the ESF 2015-20 programme to provide up-skilling and re-skilling for adults and support life-long learning (Priority 10.3, activity 1.6.2 managed by the Ministry of Education and Research). Although the ESF programme of the education system has a more general objective regarding adult learning, many of the training programmes are the same as provided by the EUIF, but simply not targeted to jobseekers or people in threat of job-loss.

Avoiding gaps and overlaps in service provision is not sufficiently supported by data exchange due to implications of data protection as well as challenges related to the IT infrastructure. For example, the Health Insurance Fund is conducting in 2019-20 an audit of the rehabilitation system to better understand the current gaps and overlaps, as the data on medical rehabilitation services is not exchanged on operational basis. Some data from the Social Insurance Board reaches the EUIF, although there is also scope for improvement (information exchange via Excel files). Data exchange on services provided by municipalities and the EUIF is in place, but the actual information has still gaps. The municipalities are expected to provide the data in a central IT system (STAR) developed for that purpose by the SOM (and managed by the Social Insurance Board since 2019). Nevertheless, as the IT system has often errors and is not user-friendly, the municipalities have not started to fully use this tool (Riigikontroll, 2019[39]).

Regardless of some potential overlaps in the system, stakeholders assess that there are several groups of people who still do not get sufficient support from any of the existing schemes or that the support is temporary (project-based activities financed by the ESF). For example, care arrangements for people with dementia are largely missing (some dementia centres started in 2018 through ESF financing), posing care responsibilities for other household members and hindering their labour market integration. Furthermore, although addiction counselling is provided by several institutions, the stakeholders do not consider access to addiction treatment to be sufficient.


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← 1. The Work Ability Reform has been introduced in stages and is still going on as of 2020.

← 2. Furthermore, spending on active labour market policies increased between 2018 and 2019, i.e. it might exceed the OECD average in 2019. However, data are not available for all OECD countries yet.

← 3. In the Estonian context the new measure is considered to be an ALMP as its primary objective is to prevent unemployment and thus it also is regulated and financed as an ALMP. Nevertheless, according to the OECD-EC methodology for labour market policies, short-time working schemes are generally categorised as income support measures, i.e. passive labour market policies.

← 4. Effective ALMPs – ALMPs have a positive effect on employment outcomes for the participants in ALMPs.

← 5. Efficient ALMPs – The benefits from improved employment outcomes are higher than the cost of providing the ALMPs.

← 6. An approach prioritising a quick entry into employment, rather than focusing on increasing jobseekers’ employability first (train-first approach).

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