1. Commission initiative on integration of long term unemployed
ESF Committee
26 March 2015

2. Political orientations
Commission Work Programme COM(2014)910
Member States are facing the difficult challenge of getting more people into work, and ensuring that workers have the skills they need to progress and adapt to the jobs of the future. The Commission will present a package of measures to support these efforts to help boost integration in the labour market and promote skills
New initiative : Proposal for a Council recommendation on integration of the long term unemployed
Council Conclusions on "2015 Annual Growth Survey and Joint Employment Report" and on "Inclusive labour markets" (9 March 2015)
Preventing and reducing long-term unemployment: through improved efficiency of public employment services, the effectiveness of activation and make work pay measures, and by investing in human capital as well as tailor-made active labour markets policies and integrated social services.
Political urgency of supporting the current stock of long term unemployed, at risk of being left out of the current recovery.
Prevention through structural reforms important, but need for remedial interventions

3. Long –term Unemployment is the main legacy of the crisis
Key figures
Long –term Unemployment is the main legacy of the crisis
11.9 million long term unemployed (49% unemployed)
59% very long term unemployed
Every year, 19% fall into inactivity; more than 50% remain unemployed
High incidence among prime age and older workers
Increasingly high proportions of low skilled are long term unemployed, contributing to polarisation and inequalities

4. Recent evolution
Long term unemployment and very long term unemployment in active population (EU 28)
LTU doubled between 2008 and 2013, with large divergence in the performance of MS
Share of very long term unemployment (the filled area in the graph) persistently high.
Large stock of long term unemployed are a social and employment policy emergency
Acknowledge that LTU is not an homogeneous group (diversity of situations)
High and profound social and economic consequences
This is a problem for the EU (Demographic challenges – 18 M over next 20 years)
Eurostat, LFS

5. Job finding rates by duration of unemployment
Integration evolution
Job finding rates by duration of unemployment
Rates of jobfinding among unemployed decrease sharply with duration of unemployment.
The graph shows that transitions to employment decreased in the last years.
For long term unemployed they remain persistently low -> sticky problem.
With the initiative, we aim to make the line drop less steeply.
Decrease because
Population most difficult to reintegrate
Longer time add an handicap to existing ones
Eurostat, LFS 2013, experimental data

6. Problem Insufficient focus
Inadequate support to the long term unemployed
Coverage of activation support
Low coverage of active measures among long term unemployed
(4% HR --> 41% AT)
Diminishing spending per capita during crisis
Effective activation design
Links to employers and primary labour market - design of hiring subsidies and related services
Countries which activate a higher share of the unemployed, which have higher participation in lifelong learning and stronger activation conditionality are more resilient to long term unemployment
In 17 Member States the maximum duration of unemployment benefits/assistance is 12 months; the minimal duration is below 10 months in 25 Member States. Only in DE, DK, ES, LU, PT, FR, NL, BE is the maximum duration at 24 months or above. Most unemployed do not qualify for the maximum duration.

7. Eurostat, LFS 2013, self- declared
Problem - Discontinuity
Share of unemployed receiving labour market benefits or assistance by duration of unemployment
The graph shows the share of unemployed who declare to benefit from unemployment benefits or assistance.
The window of action we would like to focus on is moths, to capture this moment of transition crucial for the effectiveness of further support.
Type of compensation support (insurance or assistance)
PES primarily serve those eligible for unemployment benefits, in most countries up to 12 months. With transition to social assistance institutions, activation effort diminishes.
Type of intervention and which body
PES and other bodies
Turning point 12/24 months
Lower coverage of assistance measures for long term unemployed shows in the declining jobfinding rates shown in the previous slides.
Eurostat, LFS 2013, self- declared

8. Problem – Integration & partnerships
Insufficient coordination between delivery agents
Lack of continuity in individual assessment and action plan when responsibility for services shifts
Insufficient coordination between delivery agents (public employment services, municipalities, social services) – lack of clear obligations and mechanisms to cooperate
Inadequate enforcement of benefits conditionality / Lack of coherence / low level of incentive to work

9. New Initiative - Objectives General objective Specific objectives
Support Member States to increase transitions from long term unemployment to employment.
Specific objectives
Increase the share of the long-term unemployed who receive active support leading to employment.
Support Member States in re-shaping activation to better address individual barriers and labour market needs.
Enhance cooperation within Member States between relevant public or outsourced services delivering activation support, benefits and social services to LTU

10. No policy change (continuation of European Semester process)
Options considered
No policy change (continuation of European Semester process)
Council Recommendation on general measures to address LTU (Guidelines the integration policies)
Council Recommendation introducing the notion of Job integration offer (or individual activation offer)

11. March 2015 Employment Guidelines:
Baseline scenario
Current EU policy
European Semester (19 Member States CSRs on LTU, activation, active measures)
Communication on European Semester implementation (March 2015): need to strengthen the capacity of their Public Employment Services to fight long-term unemployment.
March 2015 Employment Guidelines:
Comprehensive and mutually reinforcing strategies for LTU
Provision of specific active support
Better targeted and simplified social services
European Social Fund ''Access to Employment' and 'Active Inclusion' investment priorities ( )

12. Mutual commitments Comprehensive and mutually reinforcing strategies
Option : Broad Council Recommendation
Comprehensive and mutually reinforcing strategies
Integrated approach
delivery partnerships
coordinated support offer
Partnership with employers
enriching services for employers
awareness, incentives and post-placement support
Individualised approach
individualised case management
tailored services
Mutual commitments
rights and responsibilities
gradual approach

13. Job Integration Agreements
Option : Targeted
Council Recommendation
Job Integration Agreements
Specific instrument for specific group of beneficiaries, additional to other ALMP offers
Relevant activation offer
Intensified point of intervention: between 12 and 24 months or after end of UB
Personalised individualised approach
Mutual commitments – activation, benefits, social services building on existing entitlements
Single point of contact/ integration of services
Open questions on the timing of intervention, on identification of the target groups and on type of agreement (contract of part of IAP)

14. Public consultation open until 15/05 on Europa website
Next steps
Public consultation open until 15/05 on Europa website
Impact assessment analysing different options
Consultations of social partners
Consultations of relevant EU committees
Foreseen proposal - Summer 2015