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The point of departure is Calmfors et al. (2001, 2002, 2004) where Swedish evidence available in the early 2000s was surveyed. We have complemented the picture given in these surveys by new Swedish evidence as well as international evi- dence in areas where Swedish evidence is scarce. We have also cove- red a number of new topics. In this process some of the conclu- sions reached by Calmfors et al. have been modified and a number of new issues have been raised. The picture painted by Calmfors et al. of the effects of ALMPs in the 1990s was to a large extent a gloomy one. Not least is this the case for training programmes. Whereas the few available studies of training programmes in the 1980s found significant and reasonably large positive effects of vocational training programmes, most of those programmes in the 1990s at best found insignifi- cant effects. This pattern is again reversed in the three studies of training programmes in roughly the last decade, where positive tre- atment effects are found again. As yet, there is no conclusive evidence on why treatment effects seem to have improved since the 1990s. One can, however, list a number of possible explanations: First, a target was introduced that 70 per cent of vocational training programme participants should have a job within 90 days after completed training. This may have induced the case workers at the () to work to identify both participants and courses. With heterogeneous treatment effects, this could lead to better treat- ment effects to the extent that the individuals identified actually would be selected on expected treatment effects rather than on expected job finding rates. To the extent that the target made case workers work to identify courses that were better adapted to labour demand, this would produce better treatment effects. Second, the possibility to renew UI benefit eligibility by participa- tion in a training programme was removed. This changed the incentives in a way that probably made participants more interested in acquiring useful skills rather than a prolonged period with UI benefits. Third, the recession of the 1990s was very deep. This made it hard to identify which occupations and sectors to train for – there were no easily identified bottlenecks. Also in this respect, things had changed for the better for the training programme par- ticipants of the early 2000s. Finally, it seems that a number of the evaluations of training programmes in the 1990s did not make a distinction between prep courses and vocational training. This rai- ses some issues of how the estimated effects should be interpreted, and results in et al. (2007) suggest that that the estimates are likely to be downward biased estimates of the effects of voca- tional training programmes.17 It is, however, important to stress that the new results should not be used as a rationale for an unconditional expansion of trai- ning programmes. Training programmes are much more expensive than other programmes, and the improved results probably, at least partly, reflect that volumes in the early 2000s were much smaller than in the 1990s. The second major type of programme is subsidised employment of various kinds (including practice programmes and most program- mes targeted at youth). Calmfors et al. concluded that the available evidence suggested that the closer a programme in this category 17 There is a fundamental problem involved in estimating the effects of prep courses. This problem arises because prep courses are designed to prepare for other programmes (most often, but by no means always, vocational training programmes), and not directly for transitions from unemployment to work. This raises hard to solve issues of how sequences of programmes should be evaluated. was, the more likely it was to speed up the transition to an ordinary job. They also found that the programmes with the closest resemblance to ordinary jobs (employment subsidies and self employment grants) actually seemed to have a positive treatment effect in the sense that they outperformed continued job search in open unemployment. The latter result is confirmed by the few available new studies. A potential problem with the programmes most similar to ordi- nary jobs is that there is evidence that these programmes also tend to be the programmes most associated with crowding out ordinary jobs. However, how serious this problem is, taking also other gene- ral equilibrium effects into account, depends crucially on how the programmes are targeted. If the programmes are targeted at long- term unemployed outsiders, those crowded in by the programme will on average exert only a limited downward pressure on wage as they are outsiders and probably also rather compete for available jobs only to a limited extent. Those crowded out will on average be more like insiders and efficient competitors for the available jobs. The net effect will be a downward pressure on wages and higher employment, counteracting the direct crowding out effect at given wages. A third important part of labour market policies is the emp- loyment service. Calmfors et al. concluded that Swedish evidence was rather old and pertained to certain groups only. , they concluded that it was impossible to establish whether or not a general increase in the service level would have a positive effect. Our survey of international and more recent Swedish research gives somewhat more precise answers. An overall conclusion based on the international studies is that intensified job search assistance, in particular combined with incre- ased control, gives rise to positive effects on employment. Increa- sed support and counselling together with increased control seems to create a good mix of increased support and more in-depth fol- low up. It can be considered conditional support, where the unemployed gets extra support in exchange for increased search efforts. However, when interpreting the international evidence, it is important to keep in mind that monitoring and counselling are parts of the normal supply of services at the Swedish PES. , unless effects are linear, the international evidence does not support an unconditional increase in counselling and monitoring. research using controlled variation in levels of counselling and monitoring is needed to determine whether or not the benefits exceed the costs of raising the level of support in the Swedish PES above its present level. The positive effects found for counselling and monitoring also has some bearing on how one should interpret the estimated effects of participating in various labour market programmes. The control group in Swedish studies of labour market programmes consists of unemployed persons with access to the services offered by the PES. Some gloomy evaluation results may therefore reflect good effects of the alternative treatment – it may well be the case that time used for job search, using the facilities of the PES is equ- ally well (or better) used than time spent in a labour market pro- gramme. In fact, the distinction between (= programmes) and passive (= UI benefits) labour market policies may be serio- usly misleading and seems to be based upon a view of UI benefits as compensation for non-work. In fact, in the Swedish unemploy- ment insurance, as well as unemployment insurance in other coun- tries, receipt of benefits is conditional on meeting a whole set of requirements relating to job search and being available for work. In , the PES plays a key role in this process. The PES is suppo- sed to provide job search assistance as well as monitoring of job search behaviour to make sure the benefit recipient meets the requirements in the legal framework of UI. From this perspective, job search assistance and monitoring should be considered a labour market programme. Pre-programme effects and compulsory programmes In addition to the topics discussed above, which were also covered by Calmfors et al., we have covered a number of issues raised by recent research. One such issue relates to compulsory programmes where the timing of programme entry can be predicted with good accuracy. The interest in such programmes at least to some extent has arisen because expected programme entry may affect the beha- viour of the unemployed already before programme start. In prin- ciple, the effect on present behaviour of future expected compul- sory programme participation will depend on the expected utility of taking part in the programme. If the expected utility is negative (compared to some relevant alternative), the unemployed has incentives to avoid the programme. The normal way to achieve this is to find a job. If, on the other hand, the expected utility of pro- gramme participation is positive, the unemployed will act so as to get access to the programme. , the announcement of a com- pulsory programme will generally affect the job-finding rate of the unemployed already before programme start, pre-programme effects. The empirical literature indicates that such pre-programme effects actually seem to be present. This creates a complicated situ- ation for policy design. In order to maximise a pre-programme inc- rease in the job-finding rate, programmes should be made unattractive: they should confiscate a maximum of leisure time, pay low benefits and have bad treatment effects. However, it is likely that at least some unemployed job seekers would benefit from a well designed programme involving skills upgrading. , an optimal policy design would treat job seekers with different labour market differently in terms of the types of programmes offered. For job seekers with good labour market , com- pulsory low-quality programmes may be a good way to increase job-search efforts and decrease reservation wages. seekers with bad labour market should instead be offered programmes with important skills-upgrading components. Given this view, it becomes crucial for policy to identify how to sort the unemployed into these different kinds of treatments. This is, of course, a non- trivial task. One possible way to improve programme assignment is to give caseworkers access to statistical profiling and targeting instru- ments. Profiling aims at early identification of the labour market of unemployed job seekers, usually in the form of a pre- diction of the risk that somebody will become long-term unemplo- yed. If the caseworker, aided by the profiling instrument, can iden- tify those at risk of becoming long-term unemployed, measures can be taken early in the unemployment spell and resources will not be wasted on those that will find a job anyway. A pilot using a profi- ling model was launched a few years ago. This pilot has as yet not been evaluated. Systematic profiling has been used in a few other countries, but the empirical evidence on the effects so far is not conclusive. Suppose that those at risk of becoming long-term unemployed are properly identified (possibly from a statistical profiling instru- ment). A more ambitious task is then to assign the right treat- ment to those at risk. This is the aim of statistical targeting models. Targeting models have also been used on a small number of occa- sions. Too is known about the effects to warrant any conclu- sions. Fundamentally, compulsory programme assignment for all and profiling/targeting represent polar views on how to conduct ALMPs. On a priori grounds, the latter approach is attractive: each and every one will get the right treatment at the right time. In addition, locking-in effects will be excessively large if a compulsory programme is used for groups with good labour market , especially if the programmes only to a limited extent involve job search activities. , there may be good reasons to question the strong focus in present Swedish ALMPs on compulsory program- mes, guarantees. However, it is necessary to stress that empirical knowledge in this area is almost non-existent. For instance, this applies to knowledge about the effects of the timing of treatment. However probable it may seem that early intervention is an effici- ent strategy, there is no empirical support for this view. To increase the knowledge about the effects of targe- ting/profiling, it is necessary to introduce such instruments in a way that facilitates evaluation. It is also necessary to gain more knowledge about the alternative – compulsory programmes for all. A fundamental problem about compulsory programmes for all is that they, in general, cannot be evaluated due to the lack of control groups. To gain more knowledge about such programmes, it is necessary to conduct pilot studies where, for example, programmes are not rolled out in the whole country at the same time. Private provision of ALMPs An interesting has arisen due to the introduction in of pri- vately provided labour market policy measures during the last few years. Private providers can potentially be important complements to the publicly provided services, both as providers of specific pro- grammes and as providers of whole packages of services (similar to what is provided by the PES). In this is a recent phenome- non, but the government aims for a rapid increase in the market share of private providers; actually the target for the present year is that a third of the participants in the and development guaran- tee and the guarantee for youth should be serviced by private providers. Our survey of theoretical arguments and empirical evi- dence suggests that there are no unambiguous effects to be expec- ted from privatisation. There are only a small number of empirical studies of the effects of private provision of labour market policy measures. All but one of them (the only Swedish study) relies on non-experimental observational data, and it is not completely clear that the studies have actually identified causal effects, given that self-selection to private providers poses a serious evaluation problem. However, even if selection has been handled in a satisfactory way, it is not evident what one should expect. An important dimension of any process with private provision of services is contract design. All contracts create incentives, and the extent to which these incenti- ves reflect the interest of the principal depends on a number of conditions, and these conditions, such as how hard it is to specify the services in a way that is verifiable, can be expected to vary from one context to another. A special feature of interest in the context of labour market policies is the fact that private provision a relati- vely novel feature. Probably it takes time for the principal to acquire skills in contract design.