ABSTRACT
This chapter focuses on Active Labour Market Policies (ALMPs) which consist mainly of educational and employment incentives offered to the unemployed. ALMPs aim to relieve or prevent the negative effects that spells of unemployment often bring about for the individual as well as for the labour market as a whole. The subject that researchers continually investigate is whether or not participation in ALMPs is fruitful. The chapter shows that it is difficult to make universal statements about this because the success of ALMPs seems to vary as a consequence of how they are designed, individual heterogeneity among participants and methodological issues. It discusses a short account of the unemployment process, the risk of long-lasting negative scarring effects and unemployment benefit insurance systems that aim at alleviating more direct negative economic effects. ALMPs are used to counteract labour shortages and to mobilise the workforce by holding down the overall unemployment level.
