Labour Market Programs: A Review of the Literature

Melbourne Institute Working Paper No. 23/97

Date: October 1997

Author(s):

Elizabeth Webster

Abstract

ommonwealth labour market programs currently consume $1.5 billion dollars per annum. Most of this expenditure is aimed at the long term unemployed. Since 1973-74, expenditure on these programs has risen and fallen in line with the unemployment rate. This government behaviour parallels the overseas experiences. Most empirical evidence from Australia and elsewhere indicate that programs improve participants' employment experiences for at least a year or two after leaving the program. However, most of this improvement could well be at the expense of other jobseekers. There is a lack of convincing evidence that the programs reduce wage pressures enough to permit an increase in total employment. Nevertheless, labour market programs appear to have intrinsic worth as an equity instrument, for they provide hope and opportunity to the most disadvantaged of all jobseekers

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