1. Second Vienna conference on Western Balkan labor markets
An overview of labor market services and measures in the Western Balkans
Second Vienna conference on Western Balkan labor markets
Vienna March 2018
Mihail Arandarenko

2. Monitoring of labor market policy in EU
LMP statistics covers public interventions in the labor market carried out with the goal to
Achieve efficient functioning of labor market by correcting disequillibria (e.g. information defficiences, skill mismatches)
Assist vulnerable groups (distinguishing LMP from general employment policy)
Primary but not only target group – persons registered with PES
LMP is increasingly concerned with
Persons at risk of job loss,
Persons requiring support to remain in employment,
Formally inactive persons attempting to join or reintegrate into labor force

3. Labor market policy statistics
Eurostat defines the scope of data collection, statistical unit and coverage, classification system and guidelines on the data to be submitted
Methodology is available to all at the Eurostat / DG Employment website
For each intervention a separate questionnaire is filled – because each intervention is one unit of observation
National interventions are classified based on the joint EU classification to secure consistency and comparability at the EU level
LMP interventions are classified by the type of action
There are three broad groups of intervention – services, measures and supports, comprising the total of 8 categories
Services and measures together make active labor market policy (ALMP)

4. Services within LMP Organized within a single Category 1 - Services
Information on vacancies
Job search training and other related services
Career development services
Other similar activities

5. LMP measures Category 2 – Training Category 4 – Employment incentives
Category 5 – Sheltered employment and rehabilitation
Category 6 – Direct job creation
Category 7 – Start-up incentives

6. Main benefits from ’europeanization’ of monitoring labor market services and measures (ALMPs)
Well developed and ready to use statistical methodology applied in most EU countries and in OECD
Detailed methodological instructions, easy to use software, standardized questionnaire
Harmonized methodology makes it possible to compare the comparable, in relation to EU averages and benchmark countries
Currently, each Western Balkan country has its own methodology (typically implicit and incomplete) that deviates significantly from Eurostat

7. National vs. Eurostat classification of LMP
National classifications
No single criterion – mostly by the type of action, but also target groups, or their combinations (e.g. Youth packages)
Not standardized (implicit) and not systematized, with frequent changes
Sometimes mechanical reliance on the title of measure (e.g. if ’training’ in title, goes to category Training)
Not fully comprehensive (often omits measures to sustain employment, job rotation, job sharing, tax subsidies etc.)
Eurostat classification
Single basic criterion – by type of action
Clear and detailed definitions ensure comparability
Full coverage (beyond PES activities) – based on detailed guidelines what is to be considered LMP intervention

8. RCC/ESAP sub-project on ALMPs in WB6 November 2016 – March 2017
Use for the first time Eurostat classification of LMP – need to re- classify existing documentation
Insert missing programs that are not typically part of national ALMP statistics – such as supported employment, rehabilitation, LMP measures outside PES
Provide statistics that is more comparable within the region and with the EU on
Total expenditures on ALMPs and their structure by categories and individual measures
Total number of participants and their structure by categories and target groups

9. RCC/ESAP sub-project on ALMPs in WB6 November 2016 – March 2017 – cont’d
Some important limitations
Expenditures on services could not be calculated in accordance with Eurostat rules (include costs of staff time), but were simply taken from national statistics, which have either completely ignored costs of staff time, or have not fully accounted for it
Number of participants could not be re-calculated following the Eurostat procedure, but was taken at face value.
Both things combined make services look unrealistically efficient and effective, underestimate the true costs and overestimate the number of participants

10. Expenditures on ALMP as share of GDP – Western Balkans vs. EU countries

11. Albania – spending and participants

12. Albania – allocation of expenditures across categories

13. Kosovo – spending and participants

14. Kosovo* – allocation of expenditures across categories

15. FYR Macedonia – spending and participants

16. FYR Macedonia – allocation of expenditures across categories

17. Montenegro – spending and participants

18. Montenegro – allocation of expenditures across categories

19. Serbia – spending and participants

20. Serbia – allocation of expenditures across categories

21. BiH: Federation BiH – allocation of measures across categories

22. BiH: Republic of Srpska, allocation of measures across categories

23. Some tentative conclusions
Expenditures on ALMP well below CEE average and far below EU average, even if upwardly corrected for underestimation of services
Montenegro is the only country with ALMP expenditures close to CEE/EU average, other below 0.2% of GDP
Two sub-groups – with relatively balanced (Serbia, FYR Macedonia, BiH - Federation BiH) and with unbalanced expenditures across categories (Albania, Kosovo*, Montenegro, BiH: Republic of Srpska)

24. ALMP statistics - way forward
Switching to Eurostat LMP statistics is relatively easy – Serbia has tried and is about to implement it
Still, it requires
Re-classification of LMP services and measures
Centralised monitoring of all ALMP (Ministry or PES?)
Revision of expenditures (accounting for staff time, allocation rules)
Revision of participants (definitions of entrants and exiters, weighting the number by the time spent in the measure etc.)
New monitoring methodology will be much better base for
Net impact evaluations of ALMPs and
Cost-benefit analysis