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What can active labour market policy do?

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During the 1980s, two dimensions in particular of the unemployment problem have been a source of increasing concern for policy-makers in Europe. One id the increasing rate of structural change and the resulting decline in employment opportunities for unskilled manual workers. The other is the evidence of the corrosive effects of long spells of unemployment on individuals and societies. This paper attempts to assess the role of active policies, the combination of more rapid structural change in long-term unemployment. Even where schemes do not have much of a return to those on them, as much of the microeconomic evidence suggests, they may still have a substantial social return in preventing the emergence of long-term unemployment. The key requirement is to ensure that no unemployed person, who is able and willing to work, should be allowed to draw benefits for more than a limited period of time. The resources of the ;about market authorities should be used to endure that as a last resort some appropriate temporary job or training opportunity is made available by the end of this period.

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