The design and effectiveness of active labor market programs in OECD countries: a review of recent evidence for Latin America and the Caribbean

From the 1990s governments in many countries with extensive social protection systems have sought to realign their labor market policies by shifting their policy focus from “passive” income support payments towards more “active” programs. Such “active” measures include a diverse range of interventions and programs aimed at improving the functioning of the labor market, notably by matching the unemployed and other disadvantaged groups to jobs or, by enhancing their employability and skills to improve their employment prospects. This paper reviews recent findings on the relative effectiveness of different active labor market programs with an emphasis on the extent to which they meet the needs of women and young people. It then reviews findings on the role and effectiveness of publicly funded training and skills programs. It also considers reforms to the public employment service and related delivery organizations with a particular focus on evaluation findings concerning the impact of front line case managers and of subcontracting program delivery to external providers. The paper aims to facilitate learning from developments in the OECD area and the conclusion considers how these findings may be of relevance to Latin American and Caribbean countries.