Study supporting the evaluation of the council recommendation on the integration of long-term unemployed into the labour market1

Written by ramboll, Seor, WiiW January 2019
EUROPEAN COMMISSION
Directorate-General for Employment, Social Affairs and Inclusion Directorate B - Employment - Unit B.1 - Employment Strategy

Executive Summary

The purpose of this assignment was to carry out an external study to support the evaluation of the actions taken in response to the Council Recommendation on the integration of the long-term unemployed into the labour market (the Recommendation), as requested by Article 14 of the same Recommendation1. The study covers actions undertaken in Members States and by the Commission in response to the Recommendation. It assesses the extent to which the general and specific objectives have been realised, tracking the activities implemented, outputs reached, and results achieved. The evaluation criteria effectiveness, efficiency, relevance, coherence and EU added value are addressed, in line with the Better Regulation Guidelines of the European Commission.

The study provides an assessment of the extent to which the Recommendation contributed to:

• an increase in coverage – increased registration of long-term unemployed individuals with Public Employment Services in Member States;

• an improved continuity and coordination between relevant services, including by identifying a single point of contact (SPOC) in charge of coordinating support;

• an improved effectiveness of interventions towards both long term unemployed and employers.


To this end, the Recommendation proposed concrete measures in four main policy areas: (1) coverage of registration; (2) individualised support to long-term unemployed; (3) inter-institutional coordination; and (4) cooperation with employers. The study has assessed whether and how the measures provided in the Recommendation have translated into new policies and practices (or planned changes) in Member States. The study was carried out using a mixed-methods approach, using both qualitative and quantitative data to assess and explore whether the Recommendation led to the expected results and impacts.

A mapping of policy changes was undertaken in all Member States, comparing policies in place to tackle long-term unemployment before the Recommendation was adopted in February 2016, and policies planned or in place by end 2018. Furthermore, the study entailed in-depth case studies in eight Member States, reaching the regional and local level to illustrate the implementation of measures proposed in the Recommendation in different contexts and institutional settings. The findings were complemented by a public consultation during summer 2018, collecting over 400 responses from stakeholders in Member States and at the EU level, and targeted interviews with key stakeholders (social partners) at the EU level. Finally, quantitative data from Eurostat and monitoring carried out in the framework of the Employment Committee (EMCO) was used to complement the qualitative findings and explore the early effects of the Recommendation.

Implementation of the Recommendation

The Recommendation was adopted in February 2016. The study showed that by end 2018 Member States have responded to the Recommendation with either implementation of new measures (where measures targeting long-term unemployed were less developed) or by changes and development to existing measures, in line with what the Recommendation proposed. Figure 1 show a synthesis of changes in quality of policy measures, based on assessments by made national experts. Countries with no or minor changes in policy are countries with already lower starting positions in terms of LTU-rates in 2014. For all countries that reported mixed or strong or very strong change, LTU-rates declined rather substantially.

The main barrier in implementation relate to resources and financial constraints. Member States with high LTU-rates also have high unemployment rates, overall putting pressure on the public employment services and high demand for activation measures. Institutional fragmentation and governance also played an important role, with challenging implementation in highly decentralised models. Finally, the institutional set-up and legal framework influences the capacity to share information and coordinate support to long-term unemployed between different institutions. The drivers for change were related to a need to increase focus on long-term unemployment, as short-term unemployment is falling, and the labour market has picked up speed since the Recommendation was adopted. Another driver has been the need to integrate recent immigrants on the labour market, in Member States with a high inflow of refugees in recent years.

Evaluation of the Recommendation

Overall, the findings show that Member States have implemented measures in line with the spirit of the Recommendation. The Recommendation was effective as a means to influence policy measures to support long-term unemployed, in particular with regards to individualised support and consistency in the support offer. In terms of results and more long-term impacts such as increased transition and labour market performance, it is too early to assess whether integration of long-term unemployed to the labour market has improved due to the Recommendation, as limited time has passed.

Due to the limited time period since the adoption of the Recommendation, it is difficult to assess whether it was efficient and cost-effective. The study did not identify any disproportionate costs, and qualitative evidence indicate that the measures proposed are perceived as cost effective in the Member States. The European Social Fund contributed significantly to the implementation of the Recommendation in several Member States, mainly through projects on methodological development and active labour market policy.

The Recommendation was found to be strongly coherent with national policies to tackle long-term unemployment, and it plays an important role at the EU policy level by targeting specifically the practical support provided to long-term unemployed individuals.

Overall, the objectives of the Recommendation were and still are, relevant to address needs and issues linked to long-term unemployment, given that longterm unemployment remains above pre-crisis levels in some Member States, the very long-term unemployment rate is declining very slowly and the share of long-term unemployment in total unemployment remains high in several Member States.

In terms of EU added value, the Recommendation helped putting/keeping long-term unemployment high on the agenda at the European level and in Member States. It is not possible to establish with available quantitative data whether funding/resources allocation to support long-term unemployed has increased, but the Recommendation likely influenced what measures Member States focussed on in their efforts to tackle long-term unemployment. In Member States where the Recommendation was expected to have a high impact, it appears to have influenced national policy and priorities. In Member States with well-developed systems, the influence of the Recommendation was more limited, as could be expected.

Conclusions

The study provides clear evidence of progress and improvements in policy fields related to the Recommendation. This change is stronger for countries which had a less favourable starting position in terms of quality of measures. The expectations outlined in the Staff Working Document accompanying the Recommendation (2015) are in the process of being fulfilled, even though much work remains in Member States to fully implement to proposed measures.


Where progress had been limited, or where measures were not prioritised, it was mainly related to contextual factors. The main factor was a lack of financial and human resources in national, regional and local administrations. The speed of implementation has also been influenced by institutional set-up, and the degree of decentralisation in the public employment services. Another factor influencing implementation are the unemployment levels, as in Member States with very high overall unemployment (for example Greece and Italy), resources in the PES are strained and caseloads very high both for unemployed and long-term unemployed.

The study has analysed the early results of the measures implemented, by looking at the outputs and results of the measures implemented. While the policy changes implemented likely have been influenced by the Recommendation, the link from measures to outputs and results is more difficult to establish and verify.


Output indicators (like the registration rate, longterm unemployed with job-integration agreement, activation rates, ESIF-participants) which are directly related to policies implemented, show positive change over the period. For most indicators there is an increasing trend, the exceptions are coverage of registration and ALMP expenditures, which are not developing as expected or intended.

Results indicators like the transition rates and the LTU-rate are more influenced by other intervening factors than output indicators. Transition rates of long term unemployed into employment and LTUrates have improved since 2014 for most countries, however the development is closely connected to the business cycle. After a correction for the business cycles’ influence there is a favourable change in LTUrates after the baseline in 2014 in certain Member States, however these are not specifically countries showing strong changes in the policy areas. In general, the study finds weak linkages between policy changes and changes in result and output variables.

However, the complexity of potentially many intervening factors and the limited time span plays a role, especially with regards to the result variables. The findings in this study should therefore be considered indicative.

Figure 1 - Change in policy measures 2015 and 2018 Source: mapping exercise task 1 & Eurostat note: countries with no change show no changes in the mapping exercise for any policy area. countries with minor change show improvement in 1 policy area. Mixed change is change in 2 or 3 policy areas. Strong change is change in at least 4 out of 5 policy areas with at most 1 policy area showing an improvement stronger than 1 point. Very strong change is change in at least 4 out of 5 policy areas with at least 2 policy areas showing an increase stronger than 1 point.

Recommendations

Based on the evaluation is it recommended that:

• Individualised support remains a key focus area to improve the support offer, also extending the support to enhanced post placement support for long-term unemployed

• Knowledge exchange and sharing of practices regarding coordination and Single Point of Contact is intensified, especially related to data sharing and institutional set-up.

• Member States and the Commission considers whether groupings with similar experiences, systems and challenges could potentially further strengthen the knowledge exchange between Member States.

• A strengthened focus on employer cooperation, also including ways to tackling stigma and bar riers to bringing long-term unemployed into sustainable employment.

• A stronger link is made between support to longterm unemployed and recognition of formal and informal skills.

1. Introduction

The purpose of this study is to carry out an external and independent study to support the evaluation of the actions taken in response to the Council Recommendation on the integration of the long-term unemployed into the labour market (Recommendation), as requested by Article 14 of the same Recommendation3. The study complies with the requirements regarding evaluation defined by Better Regulation Guidelines and Toolbox (BR)4 in assessing the evaluation criteria effectiveness, efficiency, coherence, relevance and EU added value. It is intended to serve as input into the Staff Working Document for evaluation of the Recommendation and ultimately feed into a report of the Commission to the Council due by early 2019.

To this end, the study answers to the evaluation questions put forward by the Commission. By answering the evaluation questions, conclusions have been drawn on the evaluation criteria.

1.1 Purpose and scope

The Recommendation was adopted in February 2016, and at the start of the study it had been in place for 2 years. The study covers actions undertaken in Members States and by the Commission in response to the Recommendation. It assesses the extent to which the general and specific objectives have been realised, tracking the intervention logic from activities implemented, outputs reached, and results achieved.

Since the time span covered is relatively short, the focus of the study is primarily on the planned or realised implementation of measures (activities) as well as outputs produced (short-term results). In this sense, the study has a clear formative perspective, in taking stock of how implementation of the Recommendation has been progressing and what early results can be observed. The terms of reference set a specific focus on the extent to which the Recommendation contributed to:

• an increase in coverage – increased registration of people who are long-term unemployed with Public Employment Services in Member States;

• an improved continuity and coordination between relevant services, including by identifying a single point of contact (SPOC) in charge of coordinating support

• an improved effectiveness of interventions towards both long term unemployed and employers.

To this end, the study has assessed whether and how the guidelines provided in the Recommendation have translated into new policies and practices (or planned changes) in Member States. The study highlights policy changes and practices, and aim to identify and describe the main drivers and barriers in national contexts.

Even though the study comes at an early stage of implementation, it has taken into account result (an increase in transition rates, a decrease in the share of long-term unemployed people) and attempts to link result indicators with findings in the study. However, such findings are interpreted with care since it cannot be expected that more long-term effects have already materialised, and many other contextual factors will have a strong influence on the labour market development in Europe.

The geographical scope of the study is the European Union in its present composition of 28 Member States. The time span to be covered is the period starting from the adoption of Recommendation, i.e. 15 February 2016. As a baseline, the period preceding the adoption, e.g. H1 2015 is being used, rather than 2nd half (H2), since the preparatory work and negotiations may have influenced long-term unemployment policy prior to adoption of the Recommendation. e study has a cut-off date as close to contract closure as possible to enable integration of latest data in the report, November 30, 2018.1.

1 https://ec.europa.eu/social/BlobServlet?docId=21008&langId=en (download the complete text)
2 Council Recommendation of 15th of February 2016 on the integration of long-term unemployed in the labour market
3 The LTU-rate is the percentage of long-term unemployed in the active population aged 25-64. We use yearly data for 2014 and 2017.
4 Council Recommendation of 15th of February 2016 on the integration of people who are long-term unemployed in the labour market
5 https://ec.europa.eu/info/better-regulation-guidelines-and-toolbox_en