Labour market policy in OECD countries – selected aspects
Authors: Knapińska Magdalena , Woźniak-Jasińska Katarzyna 
Published: December 2024

The goal of the paper was to evaluate OECD countries in terms of labour market
policy, and to create a measure allowing to divide the analysed countries according to
public spending on labour market policy. Dealing with crises caused by exogenous and
endogenous factors mainly consists in activating macroeconomic policy instruments, which
requires a deeper analysis. One of the objectives of macroeconomic policy is full
employment, pursued in particular through labour market policies – and this aspect of
the state’s activities is presented extensively in the paper. First, on the basis of the
OECD database, an analysis was made of the amount of funds spent on labour market
policy: active and passive, measured as the percentage of the GDP of a given country.
Secondly, based on the TOPSIS method and the CRITIC method, a synthetic measure with
regard to public spending on labour market policy was created. These methods enabled to
group the countries according to the number of these measures as well as in terms of the
importance of labour market policy within macroeconomic policy. Thus countries were
assigned to the labour market policy models analysed and presented in the earlier
literature. Research method: literature analysis (OECD reports), analysis of statistical
data from the OECD database with the use of descriptive statistics methods, logical
inference, analysis of cause-effect relationships, the Technique for Order Preference by
Similarity to an Ideal Solution (TOPSIS) method, the Criteria Importance Through
Intercriteria Correlation (CRITIC) method. Hypotheses: OECD countries are diversified in
terms of the labour market policy (measured as % of GDP); an active labour market policy
plays a more important role in OECD countries than a passive one; the assignment of
countries to the labour market policy models discussed earlier in the literature has
changed. Results: The analysis showed that the examined OECD countries were diversified
in terms of labour market policy, as they focused on different instruments of this
policy. However, the level of public spending on labour market policy increased in most
countries in the period 2007-2019. Based on the employed methods, the author divided the
OECD countries into four groups in terms of the role of labour market policy, and stated
that in some OECD countries (e.g. Scandinavia), the policy on labour market (LMP)
corresponded to the classification of models of LMP in the literature. Other OECD
countries represented different models of LMP and different values of a synthetic
measure and, in their case, this study did not confirm compliance with the theoretical
models, however this could have resulted from the specification of the research or the
change in the specific nature of labour market policy in these countries. Value added:
The literature offered varied typologies of labour market policy, most often derived
from the models of implemented economic and social policy. This study contributes to the
literature by investigating empirically the selected OECD countries in terms of labour
market policy, and also compared the results with existing models of labour market
policy in the literature.