Lessons from the Evaluation of Labor Market Policies

In this paper, I discuss results from the evaluation of labour market programmes in Sweden and Colombia. The former is used as an illustration of a comprehensive approach to providing services for the unemployed including job search assistance, training and subsidized job placement that has inspired the use of such interventions worldwide. Training seems to have no positive effect on employment or wages and job placement has only modest positive effects over and above the simple job search assistance. However, the Colombian programmes seem to hold some promise that well targeted training programmes combined with job placement can improve outcomes for a population that is considered trainable in the context of a middle income country with a large skill deficit. This leaves the question open of what can be done for those too unskilled even to be trained effectively as adults. We have no direct answer to this. However, we show that workfare holds some promise both in terms of being able to target the poorest and in terms of improving their standard of living with effects that are possibly sustainable beyond the participation in the programme.