COMMISSION STAFF WORKING DOCUMENT Analytical Supporting Document Accompanying the document Proposal for a Council Recommendation on the integration of the long-term unemployed into the labour market
Date: 2015-09-17
Institutions: Directorate-General for Employment, Social Affairs and Inclusion, European Commission
Subjects: EU Member State, EU employment policy, action programme, fight against unemployment, integration into employment, labour market, long-term unemployment

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 17.9.2015  SWD(2015) 176 final   COMMISSION STAFF WORKING DOCUMENT Analytical Supporting Document Accompanying the document Proposal for a Council Recommendation on the integration of the long-term unemployed into the labour market  {COM(2015) 462 final}  
 
 
Contents 

1. 

INTRODUCTION ....................................................................................................... 4 

2.  LONG-TERM UNEMPLOYMENT TRENDS .......................................................... 4 

3.  PROBLEM DEFINITION .......................................................................................... 7 

3.1.  Transitions from long-term unemployment to employment ............................. 7 
3.2.  Focus of the initiative ........................................................................................ 8 
3.3.  Low coverage of activation support ................................................................ 10 
3.3.1.  Registration with employment services is declining ......................... 10 
3.3.2.  Participation in active labour market measures is limited ................. 11 
3.3.3.  Conditionality of benefits is not always enforced ............................. 12 
3.4.  Discontinuity in service delivery ..................................................................... 13 
3.5.  Activation  design  –  Individualisation  of  service  and  labour  market 

relevance of support ........................................................................................ 14 
3.5.1.  An heterogeneous group .................................................................... 15 
3.5.2.  Services are not sufficiently tailored to individual needs.................. 16 
3.5.3.  Low employer engagement ............................................................... 19 
3.5.4.  Support is not always leading to increased employability ................ 20 

4.  THE ENVISAGED INITIATIVE ............................................................................. 22 

4.1.  Objectives ........................................................................................................ 22 
4.2.  Job integration agreements .............................................................................. 22 

5.  ARTICULATION WITH EXISTING MEASURES ................................................ 23 

5.1.  Links with other policy instruments ................................................................ 23 
5.1.1.  The EU Semester process .................................................................. 23 
5.1.2.  Support  to  the  long-term  unemployed  through  the  European 

Structural and Investment Funds ....................................................... 25 
5.1.3.  Mutual learning at EU level .............................................................. 26 
5.1.4.  Active inclusion initiatives and fundamental rights .......................... 27 
5.1.5.  Reforms undertaken at national level ................................................ 27 
5.1.6.  Additional action needed ................................................................... 28 
5.2.  Lessons learned from the Youth Guarantee .................................................... 29 

6.  EFFECTIVENESS OF THE ENVISAGED RECOMMENDATION ...................... 31 

Increasing coverage of activation support (specific objective 1) .................... 31 
6.1. 
6.2.  Continuity and coordination in support delivery (specific objective 2) .......... 32 
6.3. 

Increased  effectiveness  of  interventions:  individualised  support  (specific 
objective 3) ...................................................................................................... 33 
Increased  effectiveness  of  interventions:  employer  support  (specific 
objective 3) ...................................................................................................... 34 

6.4. 

7.  EXPECTED IMPACTS AND COSTS ..................................................................... 35 

7.1.  Expected impact on transitions to employment .............................................. 35 

2 

 
 
7.2.  Expected impact on poverty and social inclusion ........................................... 38 
7.3.  Overall economic impacts ............................................................................... 39 
Implementation costs ....................................................................................... 40 
7.4. 
7.4.1.  The role of the European Structural and Investment Funds .............. 42 
7.4.2.  Monitoring costs ................................................................................ 43 
7.5.  Budgetary impact ............................................................................................ 43 
7.6.  Timely impact and implementation risks ........................................................ 45 

8.  EVALUATION AND MONITORING .................................................................... 46 

9.  STAKEHOLDER CONSULTATIONS AND EXPERTISE USED ........................ 48 

9.1.  Stakeholder consultations ................................................................................ 48 

9.1.1.  Labour  Market  Observatory (LMO),  European  Economic  and 

Social Committee (EESC) ................................................................. 49 
9.1.2.  European Social Fund Committee ..................................................... 49 
9.1.3.  European Network of Public Employment Services ......................... 49 
9.1.4.  Employment Committee ................................................................... 50 
9.1.5.  Social Partners ................................................................................... 50 
9.1.6.  Social Protection Committee ............................................................. 51 
9.2.  Expertise used ................................................................................................. 52 

ANNEX  1 ABBREVIATIONS AND GLOSSARY OF TECHNICAL TERMS USED  53 

ANNEX 2 - SUPPORTING DATA AND ANALYSIS ................................................... 57 

3 

 
 
 
 
1. 

INTRODUCTION 

The strengthened economic activity in the European Union has a positive impact on employment, but 
progress is subdued and the situation is very different across the Member States. In 2014 the level of 
unemployment varied from 5.0% in Germany and 5.6% in Austria to 24.5% in Spain and 26.5% in 
Greece1.  Since  mid-2013,  employment  has  risen  and  unemployment  has  fallen  in  the  EU.  As 
economic  growth  strengthens,  labour  market  conditions  should  improve  further.  Long-term 
unemployment  rates  also  increased  and  remained  at  high  levels  in  2013-14,  most  markedly  in  the 
Member States (MS) most hit by the crisis. 

Action is already undertaken to support MS in securing a rapid return to work of those who are long-
term unemployed in order to prevent the permanent loss of their skills and capabilities. But more is 
needed to complement the mechanisms already in place and to reinforce their effectiveness, notably 
by a more coordinated approach 

This  report  presents  the  problems  addressed  by  the  initiative,  the  effectiveness  of  the  solutions 
proposed and provides an image of the estimated impact  of a Council recommendation to support the 
integration of long-term unemployed (LTU). The initiative (2015/EMPL/005) is one of three elements 
contained  in  the  Commission  Work  Programme  20152  item  on  Promoting  Integration  and 
Employability. 

Stakeholders were consulted in the preparation of the report in the period February-June 2015. Main 
results and positions expressed have been taken into account throughout the process. A summary of 
the stakeholder consultations is included in the last chapter of this document. 

A public consultation was carried out on the ‘Your-Voice-in-Europe’ web portal between 19/02 and 
15/05/2015.  Twelve  weeks  were  allocated  for  responses.  The  consultation  was  supported  by  a 
summary of context and scope of the envisaged initiative3. A summary of the consultation responses 
is available online4. 

2.  LONG-TERM UNEMPLOYMENT TRENDS 

After six years of subdued growth and low labour demand, LTU numbers doubled in the EU5. Half of 
the unemployed are now long-term unemployed6 (more than 12 million people or 5% of the active EU 
population), 60% of whom have been jobless for at least two consecutive years7.  

The economic crisis led to a surge of LTU, reversing the progress made before 2009 in re-integrating 
the  long-term  unemployed  in  the  labour  market.  Unlike  overall  unemployment,  LTU  has  had  an 
increasing  trend  of  growth  since  the  beginning  of  the  crisis  and  it  is  now  at  historically  high  levels 
(Figure 1). 

1 EUROSTAT LFS survey data [une_rt_a] 
2 COM(2014) 910 final 
3 http://ec.europa.eu/social/main.jsp?catId=333&langId=en&consultId=15&visib=0&furtherConsult=yes 
4 http://ec.europa.eu/social/BlobServlet?docId=14186&langId=en 
5  Long-term  unemployment  refers  to  unemployment  (ILO/Eurostat  definition)  lasting  for  more  than  one  year.  Here  and 
further on, estimates on number of long-term unemployed are based on EUROSTAT lfsa_ugad database. Unless otherwise 
notified, current reference period is 2014, reference population is aged 15 to 74 years, EU refers to EU28.  

6 Based on EUROSTAT lfsa_upgan database 
7  Here  and  further  on,  long-term  unemployment  if  for  2  or  more  years  is  referred  to  as  very  long-term  unemployment  or 

VLTU.  

4 

 
 
 
                                                            
This is partly due to positive developments in terms of ensuring the long-term unemployed remain on 
the  labour  market  rather  than  fall  into  inactivity  by  narrowing  pathways  to  early  retirement  and 
linking social benefits with activation requirements8. 

Figure 1: Long-term unemployment rates and share of LTU among unemployed, EU28 

Source: Eurostat, LFS, data seasonally adjusted (unemployment rate) [une_rt_q] and non-seasonally adjusted (long-term 
unemployment rates) [une_ltu_q] 
Left axis: Unemployment rates (% of labour force). Right axis: unemployment share (% of unemployed) 

Structural dimension 

The  increasing  share  of  the  LTU  in  total  unemployment  and  decreasing  one  of  the  short-term 
unemployment    STU  indicate  that  the  job  recovery  risks  benefiting  mainly  the  STU  leaving  the 
existing  LTU  even  longer  in  unemployment  and  risking  further  deterioration  of  their  employability 
and making the LTU structural (Figure 2). 

Figure 2: Evolution of short term versus long-term unemployment, 2008-2014 

Source: Eurostat LFS [lfsa_upgan], reference population aged 25-74 years 

Different subgroups of the unemployed return to employment at different rates, with LTU being less 
responsive to economic recovery9. The slow decline reflects cyclical factors such as an insufficiently 

8    EC (2014a) - Economic and Social Developments in Europe   

5 

 
 
 
 
 
                                                            
strong and broad recovery but also the persistence of high structural unemployment10. The ECB warns 
that  a  significant  share  of  employment  losses  during  the  crisis  could  become  permanent,  with 
structural  unemployment  stabilising  around  10%11.  Pushing  down  unemployment  therefore  requires 
reinforced efforts to tackle its structural component12. 

EU Dimension 

The 12 million stock of the long-term unemployed at EU level masks a significant amount of diversity 
at MS level. Most recently, the LTU rate ranged from 1.5% in Austria and Sweden to almost a fifth of 
the  total  labour  force  in  Greece  (19.5%).  Still,  LTU  rates  increased  in  all  MS  except  for  Germany 
since 2008, as shown in Figure 3 below. 

Figure 3. Change in LTU rates EU-28, 2008-14

Source: Eurostat Labour Force Survey (LFS) [une_ltu_a] 

9 Agnello et al (2014); Krueger et al (2014). Current national trends in LTU support this delayed responsiveness: while the 
overall level remained stagnant, it decreased in 15 MS, remained constant in 3 and increased in 10 MS between Q4 2012 - 
Q4 2014 (LFS).   

10  EC  (2015)  -  European  Economic  Forecast  Spring  2015:  the  Euro-area's  NAWRU  (Non  Accelerating  Wage  Rate  of 
Unemployment, which estimates structural unemployment) is expected to rise from 9.8% in 2014 to 9.9% in 2016, and the 
EU-28's NAWRU is expected to decline only slightly, from 9.0% to 8.8%. There is a high correlation between structural 
and long-term unemployment (Annex 2, Fig 16). The period of strong economic growth between the mid-1990s to 2007 
led to a modest and unsustainable decrease in structural unemployment (from 9.5% to 8.8%), which is unlikely to re-occur 
in the medium term EC (2014f) - ECFIN’s medium term projections: The risk of secular stagnation Annex 2, Fig 15 shows 
the forecast trend in cyclical and structural unemployment. 

11 M. Draghi (2015)– Structural reforms, inflation and monetary policy  M. Draghi (2015)– Structural reforms, inflation and 

monetary policy – Introductory speech at ECB Forum on Central Banking Sintra, 22 May 2015 

12  Absent  additional  policy  interventions,  unemployment  is  expected  to  decline  very  gradually.  The  no-policy  change 
scenario in the Ageing Report provides unemployment estimations of 10% for the Euro-Area and 9.2% in the EU-28 in 
2020,  with  unemployment  at  22.1%  in  Greece  and  19.5%  in  Spain.  EC(2014),  The  2015  Ageing  Report:  Underlying 
Assumptions and Projection Methodologies. European Economy, no. 8 

6 

 
 
 
 
                                                                                                                                                                                         
3.  PROBLEM DEFINITION  

3.1.  Transitions from long-term unemployment to employment  

The  on-going  economic  recovery  already  started  to  decrease  short-term  unemployment,  limiting 
inflows. However, job finding rates among the LTU decreased and continue to be low, as shown by 
the lines for 2009 and 2013 in Figure 4.   

Job finding chances diminish quickly with unemployment duration (Figure 4). If 29% of unemployed 
succeed in returning to employment by the end of the first unemployment year, less than 17% do so 
beyond 2 years.   

Figure 4. Transition rates from unemployment to employment by unemployment duration 

50

40

30

20

10

0

f
o
s
h
t
n
o
m
y
b
b
o

i

j
a
g
n
d
n
i
F
%

t
n
e
m
y
o
p
m
e
n
u

l

47,4 

42,3 

44,3 

38,7 

38,2 

33,9 

32,2 

29,0 

2008-09

2012-13

26,7 

27,8 

23,6 

20,7 

20,4 

16,7 

17,2 

12,1 

< 1
month

1-2
months

12-17
6-11
3-5
months
months
months
Unemployment duration 

18-23
months

24-47
months

> 4 years

Source: Eurostat, EU-LFS, ad-hoc experimental calculations of transition rates. EU24 (without BE, LU, NL, PT) 

Country  differences  in  transition  rates  from  unemployment  to  employment  are  large.  There  is 
therefore  huge  potential  for  improvement:  Over  40%  of  LTU  find  a  job  before  the  second  year  of 
unemployment in DK, EE, SI, compared to less than 20% in EL, SK, RO, IT, BG (Figure 5).  

7 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Figure 5. Transition rates from unemployment to employment by unemployment duration, 2013-2014 

Source: Eurostat, EU-LFS, ad-hoc experimental calculations of transition rates. Note: 'U' refers to unemployment duration; 
only countries with available data included; lower reliability of data for Austria regarding unemployment duration above 2 
years; reference population 15-74 years old.    

In  spite  of  lower  chances  to  find  a  job,  fewer  unemployed  are  demotivated  and  become  inactive. 
Transitions  to  inactivity  dropped  during  the  crisis,  more  so  in  the  MS  most  affected,  e.g.  EL,  HR, 
SK13.  This  shows  that  transitions  to  employment  are  a  more  acute  problem  than  transitions  to 
inactivity.  

3.2. 

Focus of the initiative 

Structural  factors  on  the  labour  and  product  markets  play  an  important  role  in  explaining  the  high 
long-term unemployment rates and the unemployment duration. Several barriers prevent the LTU to 
return to employment: 

  Investment and regulatory constraints limiting job creation or job reallocation between sectors and 

firms, 

  Lack of responsiveness of the labour market14: 

o  High  taxes  on  labour  that  do  not  reward  the  work  effort  enough,  wages  not  in  line  with 
productivity,  rigidity  in  employment  protection  and  lack  of  responsiveness  of  working 
arrangements, lack of a constructive social dialogue may act as deterrents to hiring; 

o  Benefits trap: Too high or too long income replacement levels can diminish job search efforts; 
o  Low educational achievement and attainment:  low skills and levels of qualifications make it 

difficult to (re-)enter employment. 

  Insufficient support to the LTU: Low public expenditure on employment services and active labour 
market  policies  (ALMPs)  and  low  LTU  participation  in  ALMP  measures  and  lifelong-learning 
correlate strongly with lower transitions to employment. 

13  Annex  2  Fig  7,  8.  This  is  consistent  with  findings  from  the  US:  Krueger  et  al  (2014)  find  that  LTU  exits  to  inactivity 
diminish during downturns, but increase during recoveries. Different LTU characteristics (e.g. higher motivation, higher 
job-readiness) or to reduced possibilities of exit towards retirement or pre-retirement schemes can account for this.   
14 The need to address structural barriers on the labour market was emphasised in ETUC's and employer contributions.  

8 

 
 
 
 
 
                                                            
Important  as  they  are,  the  first  two  challenges  fall  outside  the  remit  of  the  proposal.  The  European 
Semester continues to address structural barriers on the labour and product markets. The low skills of 
the  workforce  will  be  tackled  as  part  of  the  same  CWP  initiative  "Promoting  integration  and 
employability" under a forthcoming skills initiative, while the Commission Investment Plan addresses 
investment constraints. 

These actions will have to be considered in a more comprehensive set of ambitious reforms needed to 
facilitate the adjustment of labour markets and foster economic growth. As underlined in the Annual 
Growth  Survey  (AGS)  2015,  structural  reforms,  fiscal  responsibility  and  investment  are  priorities. 
Simultaneous  action  in  these  three  priority  economic  policy  areas  is  critical  to  restore  confidence, 
reduce  the  uncertainty  that  is  impeding  investment  and  maximise  their  strong  mutually  reinforcing 
effects. 

In this respect, there is no one size fits all solution at the national level. In particular, labour market 
reforms have to take into consideration country specific institutions, which can help explain divergent 
experiences  across  countries  in  terms  of  their  long-term  unemployment  rates.  Apart  from  effective 
active  labour  market  policies  targeting  the  long-term  unemployed,  including  the  role  of  public 
employment  services,  other  important  institutional  factors  relate  to  the  design  of  unemployment 
benefit and social security systems, employment protection legislation, and taxation. 

The  actions  proposed  under 
the  country  specific 
recommendations issued in the context of the European Semester and they should be implemented in 
full compliance with the rules of the Stability and Growth Pact. 

this  recommendation  are 

line  with 

in 

The  initiative  would  tackle  the  quality  of  support  to  LTU  and  its  root  problems:  low  coverage  of 
activation  support,  ineffective  design  of  activation  models,  both  in  terms  of  individualised 
support  to  jobseekers  and  of  employer  involvement;  and  the  discontinuities  in  support  to  the 
LTU.  

Figure  6  below  summarises  the  "problem  tree"  for  the  initiative,  outlining  the  problems  identified, 
their drivers and consequences, further detailed in the next section.  

9 

 
 
 
 
Figure 6. Problem tree for the initiative 

3.3.  Low coverage of activation support 

3.3.1.  Registration with employment services is declining 

Registration with the PES of the long-term unemployed decreased during the crisis and the rates vary 
widely among MS.  Around 73% of the long-term unemployed declare to be registered with the PES, 
compared  to  77%  in  the  pre-crisis  period  (average  2004-2007).  Registration  rates  are  high  (above 
85%) in countries as diverse as DE, ES, SK, much lower (around 50% or less) in IT, UK, NL, BG and 
very low in RO (Figure 7)15. 

Figure 7. Long-term unemployed by Member State, stock and share registered with the PES, 2013 

15 Different registration rates can be attributed to the level, duration and eligibility of unemployment benefits, to the share of 
those who never worked among the LTU and to the obligations and sanctioning mechanisms linked to benefits, as well as 
to the quality and attractiveness of PES services.  

10 

 
 
 
 
                                                            
Source: Eurostat LFS 2013, missing data on registration in IE. 

Countries  with  higher  levels  of  LTU  participation  in  ALMPs  achieve  higher  transition  rates  to 
employment16. Low registration rates limit the access to support and limit the ability to tackle the real 
stock of LTU.  

3.3.2.  Participation in active labour market measures is limited 

In  2012  available  data  indicate  that  LTU  over  25  had  a  participation  rate  of  13.5%  in  ALMPs17. 
Involvement in ALMP measures is often linked to the receipt of unemployment benefits and less often 
to  other  forms  of  social  assistance.  In  17  MS,  unemployment  benefits  end  by  the  first  year  of 
unemployment.  On  average,  24%  of  the  LTU  received  unemployment  benefits  in  2013,  down  from 
36% in 200718.  

A  first  driver  of  low  coverage  is  the  insufficient  priority  for  LTU  interventions  compared  to 
interventions for the short-term unemployed. In spite of making up half of the unemployed, the LTU 
receive one fifth of support19. Much under-investment occurs by design: 22.1% of ALMP expenditure 
is explicitly (and not exclusively) targeting LTU20.  

According  to  the  MLP  database,  only  eight  countries  target  more  than  30%  of  ALMP  measures 
explicitly (but not exclusively) to the long term unemployed.   Ireland (64.6%) and Finland (72%) are 
the only MS to target more than half of expenditure on LMP measures to the long-term unemployed. 
Indeed, more than half of the countries for which the proportion is known (14/25) target less than a 
fifth of expenditure at the long-term unemployed. 

16  Annex  2  Fig.  13,  14.  Registered  jobseekers  have  higher  job  search  intensity  than  non-registered  ones.  Bachmann  and 
Baumgarten (2013)  A meta-analysis shows that participation in ALMPs increases by 9% to employment and by 7% the 
probability of being employed approximately one year post participation. Flieges et al (2015)  See also Martin (2014). 

17  When  adding  youth,  LTU  make  up  a  fifth  of  all  participants  in  ALMPs.  Calculations  based  on  the  LMP  database.  For 
adult  LTU,  data  is  only  available  for  19  countries  (excluding  BG,  CZ,  DK,  EL,  IT,  CY,  LU,  MT,  PL,  UK);  for  LTU 
participants data is not available for UK, PL, CY, EL. 

18 Annex 2 Fig. 19,20.  EC (2014a) - Economic and Social Developments in Europe  finds a positive relation of receipt of 

unemployment benefits and transitions to employment. 

19  This corresponds to 20.8% of expenditure on ALMP measures for all LTU and to 16.2% of expenditure on adult LTU  
(LMP database). The corresponding share of LTU in unemployment was 44.5% in 2012. 
20 EU average, excluding EL, CY and UK. Although ALMP measures support a wider group than just the unemployed (for 

inactive persons who want to work), the registered unemployed are the primary target group.  

11 

 
 
 
 
                                                            
Table 1 – Groups of countries by expenditure on  LMP measures targeted at long-term unemployed 

% expenditure 
<10% 
10-20% 
20-30% 
30-40% 
40-50% 
>50% 
Unknown 

Groups of countries 
CZ, RO, DK, FR, LV, LU, HU, NL, SK 
EE, LT, MT, AT, PT 
BG, DE, PL 
BE, IT, SI 
ES, HR, SE 
IE, FI 
EL, CY, UK 

Source: DG-EMPL, LMP database (own calculations) 

While the share of LTU increased, dedicated expenditure decreased from 28.4% of ALMPs in 2008. 
Only DE, DK, SE and UK offer a right of placement on LTU support services or measures, achieving 
above average transition rates, while seven others are using performance targets on LTU activation21.  

3.3.3.  Conditionality of benefits is not always enforced 

A  second  driver  of  low  coverage  is  the  lack  of  enforcement  of  benefits  conditionality22.  Current 
national legislation in 21 MS links social assistance benefits to registration with the PES and in 26 MS 
to mandatory participation to activation measures. The impact on coverage depends on the degree to 
which  conditionality  applies  to  registration  with  PES,  to  participation  in  ALMP  measures  and  on 
whether  graduated  sanctions  are  applied.  In  11  MS,  sanctions  are  not  gradual:  the  unemployed  are 
simply erased from the PES registry and lose the associated benefits for a period of time23. This can 
create perverse incentives for leaving out the long-term unemployed from activation services.  

21 Annex 2, Table 2 
22Two  thirds  of  organisations  to  the  public  consultation,  including  EMCO  and  employers,  find  the  mutual  responsibilities 

approach relevant and efficient, while most individual responses challenge its efficiency and one third its relevance. 

23  Information  on  graduated  sanctions  vs  de-registration  for  refusal  pertains  to  2011  and  was  built  on  D.  Vern  (2012)  - 
Eligibility  Criteria  For  Unemployment  Benefits:  Quantitative  Indicators  for  OECD  And  EU  Countries,  OECD  Social, 
Employment And Migration Working Papers No. 131 

12 

 
 
 
 
                                                            
Table 2: Conditionality for social assistance recipients 

Job  search  efforts 
required  

Compulsory 
registration  with 
PES  

Mandatory take-up of 
activation measures 

De-registration 

Graduated 

for refusal 

sanctions  

s
e
i
r
t
n
u
o
C

AT,  BE,  BG,  CZ, 
CY,  DK,  EE,  FI, 
FR,  HR,  HU,  IE, 
LV,  LT,  LU,  MT, 
NL,  PL,  PT,  RO, 
SE, SK, UK 

AT,  BE,  BG,  CZ, 
DK,  EE,  EL,  FI, 
FR,  HR,  IE,  IT,  
LT,  LU,  MT,  NL, 
PL,  PT,  RO,  SE, 
UK 

AT,  BE,  BG,  CY,  CZ, 
DE,  DK,  EE,  ES*,  FI, 
FR,  HR,  HU,  IE,  IT, 
LU,  LT,  LV,  NL,  PL, 
PT,  RO,  SE,  SI,  SK, 
UK 

BG,  CZ,  HU,  LT, 

BE,  CY,  DE, 

LU, MT,   PL, PT, 

DK,  EE,  FI, 

RO, SK 

FR,  NL,  ES, 

SE, UK 

Sources:  ESPN  (2015)  Integrated  support  for  the  long-term  unemployed  –  A  study  of  national  policies;  Vern 
(2012);*Regional variation 

Some countries impose unpaid community service activities (BE, BG, CY, HU, NL, PT, RO, SK) or a 
mandatory participation to activation measures (all MS except EE, EL, ES, FR, SK), sometimes along 
with sanctions such as cuts in benefits, in cases where the participation is not satisfactory. 

PES  from  12  MS  report  data  on  the  share  of  the  registered  unemployed  receiving  social  assistance 
benefits24; they range from a high share in IE (76%) to very low shares in EL (only 1%). 

When  enforced,  activation  conditions  for  the  receipt  of  social  assistance  have  a  strong  effect  on 
participation in active support and on transitions to employment25. However, given the low coverage 
of activation offers, existing conditionality is rarely enforced.  

3.4.  Discontinuity in service delivery 

The  PES  primarily  focus on  unemployed  eligible  for  unemployment  benefits.  When  eligibility  ends 
(on  average  after  14  months),  the  LTU  may  be  eligible  for  non-contributory  minimum  income  or 
other  social  assistance  benefits26.  In  10  MS  the  unemployed  may  still  receive  contributory-based 
benefits after 12 months of unemployment.  In general, the average duration of unemployment benefit 
is much below the maximum duration in most MS. 

The main driver behind fragmentation is the lack of coordination of service delivery.  The shift from 
the responsibility of the PES to other authorities leads to potential discontinuity in service provision27. 
In 11 MS, the PES hands primary responsibility to social assistance authorities. In 21 MS both PES 
and social authorities are involved, creating a potential for ambiguity and grey zones.   

Table 3: Inter-agency coordination of offers for long-term unemployed 

Coordination of offers 

Countries  

24 Table 3, Annex 2.  
25 Eichhorst and Konle-Seidl (2008). Explicit discussions with caseworkers on the unemployed persons’ duties are found to 
increase employment rates  Behncke et al (2010).  In Belgium, simply notification of higher requirements for job-search 
activities  and  more  resolute  monitoring  lead  to  22-28%  higher  transitions  to  employment  among  those  notified.  (Cockx 
and Dejemeppe (2012)) Besides the threat effect, receiving sanctions also increases the re-employment probability. 

26 EC(2015b) – Unemployment benefits with a focus on making work pay; Pareliussen (2014) OECD (2011) 
27 88% of respondents to the public consultation identified this as relevant/very relevant. In many countries, a multitude of 
service providers intervenes, from private employment services, NGOs, municipalities, social enterprises, training provides 
or  the social  partners,  under the responsibility of  the public authorities  in charge.  The  PES  Network  report  refers  to the 
"conductor" role of the PES for the efforts of the diverse service providers.  

13 

 
 
 
                                                            
 
 
Single point of contact for benefits and activation 
Project-based partnerships 
Formalized agreement between agencies 
Legal obligation to cooperate 
DATA EXCHANGE 

Full data exchange 
For benefits eligibility 
For preparing activation plans 

BE, CZ, DE, DK, FI, IE, NL,UK 
AT, BE, CZ, DK, FI, HU, LT, PL, SE 
BE, CY, DE, EE, ES, FR, LU, NL, PT, SK, SI 
CY, DE, FI, PT, RO, SE, SI 
AT, BE, BG, CY, CZ, DE, DK, EE, ES, FI, FR, HR, HU, 
IE, LU, LT, LV, MT, NL, PL, PT, RO, SE, SI, SK, UK 
DK, NL, SE, NL 
BG, EE, FI, LT, MT, PT, RO, SE, SI 
DE, FI, HR 

Source: ESPN (2015) Integrated support for the long-term unemployed – A study of national policies 

Among MS in which several agencies are involved, only seven provide for formalised agreements that 
regulate the cooperation between agencies (BE, CY, DE, ES, LU, NL, SK). Their scope (data sharing, 
cross-referrals), depth (degree of management coordination, shared resources, common performance 
monitoring) and coverage (only in some municipalities or for subgroups of LTU) vary considerably28. 

Nine MS promote an institutionally coordinated offer of service delivery, in the form of a single point 
of contact or a one-stop-shop29.  A single point of contact refers to coordination of front-line services 
and  client  intake,  through  a  system  of  cross-organisational  referrals  and  data  sharing.  In  DK,  they 
integrate client intake, follow-up, employment services and sanctions. Broader one stop shops entail 
joint  provision  of  several  functions  in  one  organisation.  In  UK,  NL  (local  Werkpleinen  within  the 
UWV  Company)  and  DE  they  also  disburse  benefits.  In  FI,  municipal  LAFOS  centres  integrate 
supporting social services, but not benefit disbursement. In NO all functions are integrated30.  

Blurred  responsibilities  between  PES  and  social  authorities  affect  the  coverage  of  activation.  They 
could result in "parking" difficult cases or, when agents have incentives to reduce assistance rolls to 
over-use  of  ALMPs  and  "revolving  door"  effects,  with  loss  of  efficiency31.  Unclear  pathways  to 
support lead numerous LTU to de-registration once their unemployment benefit ends32.  

Limits  in  coordination  also  hinder  coverage  and  individualised  service  delivery.  They  diminish  the 
capacity  to  enforce  benefit  conditionality  and  hinder  access  to  adult  learning,  debt  counselling, 
migrant integration support (language courses, recognition of qualifications) and to supporting social 
and  family  services  (elderly  or  child  care,  addiction,  health  or  rehabilitation  support),  thus  limiting 
activation impact on the personal barriers to work33.  

3.5.  Activation design – Individualisation of service and labour market relevance of 

support  

Effective  activation  design  combines  individualised  services  to  jobseekers  and  to  employers  and  a 
tailored ALMP offer to increase the involvement of the employers and reinforcing the relevant skills 
for employability34. 

28  Clegg  (2013),  FP7  project  COPE;  LOCALISE  Policy  Brief  no  2.Mutual  learning  in  the  PES  Network    identified  the 
coordination and balancing of income support with activation as a major challenge when the two are delivered by different 
institutions. EC (2014e) - PES approaches for sustainable integration of long-term unemployed - Toolkit 

29 Minas (2014), FP7 project INSPIRES 
30 See also COPE (2015) European Policy Brief,, FP7 project COPE 
31 Dean (2013), McQuaid and Fuertes (2014), Rees et al (2014) 
32 Minas R. (2014) , FP7 project INSPIRES 
33 Champion and Bonoli (2014) article of FP7 project LOCALISE 
34 Kluve 2010; Card et at 2010. 

14 

 
 
                                                            
3.5.1.  An heterogeneous group 

As  emphasised  by  the  Employment  Committee  (EMCO)  in  the  stakeholder  consultation,  the  group 
affected by LTU is heterogeneous. Specific groups such as persons with disabilities and the Roma are 
more  affected.    LTU  rates  are  double  as  high  among  the  low  qualified  and  third  country  migrants 
(Figure 8 and 9).  

LTU  rates  increased  faster  for  the  low  qualified  (Figure  8).    By  2025  employment  for  the  low 
qualified  is  expected  to  decrease  by  10%35  and  that  low  qualified  workers  are  increasingly  out-
competed by medium-qualified workers in elementary occupations36.  Unemployment among the low 
qualified  is  three  times  higher  than  among  high-qualified  persons37,  while  LTU  increased  faster 
among the low qualified during the crisis. 

Workers  with  low  basic  skills  are  1.8  times  more  likely  to  be  unemployed38  and  run  a  high  risk  of 
inactivity: only 55% of the low skilled surveyed in the PIAAC study were in employment, showing 
their fragile link to the labour market. Re-entering the labour market often requires acquiring a formal 
qualification,  but  low  qualified  persons  remain  more  than  4  times  less  likely  to  take  up  lifelong 
learning opportunities than high qualified persons39.  

Figure 8: EU28 Long-term unemployment rate (aged 20-64), total and by level of education, 2004 to 2014 

Source: Eurostat, LFS 

Some groups in the  labour force are particularly affected  by long-term unemployment. In  some EU 
countries,  the  share  of  the  third-country    nationals  among  the  long-term  unemployed  is  particularly 

35 http://www.cedefop.europa.eu/en/events-and-projects/projects/forecasting-skill-demand-and-supply/skills-forecasts-

detailed-data 

36 European Vacancy and Recruitment Report 2014  
37 In 2013, unemployment rates among high qualified was 6.4%, while unemployment rate for the low qualified workers was 

19.2% (Eurostat – LFS) 

38 Schleicher (2014) – Developing Educational Policies in a Holistic Skills Framework in S.K. Lee et al. (eds.), Educational 

Policy Innovations: Levelling Up and Sustaining Educational Achievement, Springer 

39 In 2014, 4.4% of low qualified workers participated in lifelong learning, compared to 18.8% of the highly educated 

(Eurostat- LFS) 

15 

 
 
 
 
 
                                                            
high and on the rise, e.g. in Belgium 12%, in Spain 15%, in Sweden 16% of LTU40. In comparison, 
the share of third-country nationals among the economically active population of the latter countries is 
at about 3% in Sweden and Belgium, and at about 9% in Spain.41  

Figure 9. Third-country nationals as a share of the long-term unemployed, 2013 and 2008 

Source: Eurostat, EU-LFS ad-hoc calculations. Note: low reliability of data for CY, CZ, LU, SI; country selection based on 
data availability.  

The  diversity  of  the  group  points  to  a  lack  of  a  one-size-fits-all  solution.  Support  should  start  from 
each  person's specific needs.  This requires a differentiated approach and a broad tool box matching 
the individual barriers to work. 

3.5.2.  Services are not sufficiently tailored to individual needs 

Limits in individualised service are a first driver of ineffective activation design taking the form of 
insufficient  profiling,  lack  of  generalised  use  of  individual  action  plans  (IAPs)  and  limited  use  of 
integration  contracts  or  targeted  action  plans  in  social  assistance42.  As  illustrated  below,  many  MS 
lack a coherent system for referral to the support they need and for follow-up. 

40The  reasons  why  third-country  nationals  are  more  affected  by  long-term  unemployment  vary  across  Member  States  and 
individual  circumstances.  Recent  in-depth  analysis  points  to  issues  related  to  access  to  general  information  on  the 
functioning of the labour market; 
overall level of education and skills as well as mastering the host-country language; 
recognition  of  qualifications  acquired  abroad  and  lack  of  evaluation  of  previous  qualifications  and  skills;  access  to 
vocational  training  including  on-the-job  training;  limited  contact  with  professional  networks  and  potential  employers. 
CEDEFOP (2014) Valuing diversity: guidance for labour market integration of migrants,; OECD/European Union (2014), 
Matching Economic Migration with Labour Market Needs 

41 Based on EUROSTAT EU-LFS DG EMPL ad hoc calculations - data for 2013.  
42 IAPs are documents to which jobseekers and employment service providers subscribe, stating rights and obligations, goals 
and steps to achieve the goals; the extent to which they include detailed information differs across MS. All organisations 
and 88% of individuals responding to the public consultation identified individualisation as relevant/very relevant. Most 
organisations find that provision is already individualised, most individual replies find that this is not the case. 

16 

 
 
 
 
                                                            
 
A  pre-requisite  for  individualised  support  is  an  effective  profiling  of  clients,  able  to  identify 
employment  barriers.  Profiling  allows  in  turn  the  differentiation  of  support,  through  "client 
segmentation" within employment services. This aims to better target services at high risk groups, to 
match  individuals  to  instruments  of  public  action  and    enable  tailor-made  services  suiting  the 
individual needs of jobseekers.43 Services are more efficient when individualised support is based on 
profiling.  This  is  particularly  the  case  in  countries  with  limited  resources,  where  caseworkers  have 
high workloads44.  

14 MS currently have a system of profiling clearly linked to client segmentation in the PES, while in 9 
other MS the profiling is either under development or partially applied45 

Table 4: Use of profiling and segmentation in the PES, 2014 

Profiling  and  client 
segmentation 

Profiling,  but  no 
client segmentation 

Profiling systems under 
development/revision 

No  profiling/  client 
segmentation 

Countries 

BE,  BG,  DE,  EE,  FR, 
IE, LV, LT, PT, SE, SI, 
UK 

AT, DK, FI, MT, NL   ES, HR, HU, PL 

CY,  CZ,  EL,  IT,  LU, 
RO, SK 

Sources: EC (2015) - Identification of latest trends and current developments in methods to profile jobseekers in European 
Public Employment Services; Country fiches prepared for the Peer Review Peer Review ‘PES approaches for sustainable 
activation of long-term unemployed’, April 2014; PES Business Model questionnaire 2014. 

While jobseeker capabilities are affected by the unemployment duration, profiling is only used in the 
first months of unemployment and no re-assessment occurs systematically46. When updates are done, 
they  are  more  likely  to  be  a  review  later  in  the  process.  Moreover,  it  is  unclear  to  which  degree 
profiling is systematically used when clients are cross-referred between organisations, for instance for 
long-term unemployed on social assistance.  

IAPs are key administrative tools linking the needs and objectives of jobseekers to the offer of support 
services and ALMP measures. In 10 MS, PES do not offer IAPs to all registered unemployed and 17 
lack targets for their completion47. 

The extent of use of individual action plans differs: while some  MS use it for all registered  clients, 
others only use it only for sub-segments or on a programme basis  (Table 5). 

43 (Berthet and Bourgeois, (2014, article of FP7 project LOCALISE, Whitworth and Carter, 2014). Services are more efficient 

when individualised support is based on profiling (O’Connell et al. (2012).  

44 Loxa and Morgandi (2014). 
45 EC (2015) - Identification of latest trends and current developments in methods to profile jobseekers in European Public 

Employment Services. 

46 EC(2015) op. cit. This view is confirmed in the report of the PES Network.   
47  26  MS  use  individual  action  plans.  The  two  exceptions  are  NL,  where  they  were  restricted  to  persons  with  disabilities 
while some elements were kept as part of self-service (e-service provision) and the Luxembourg PES which is currently 
piloting  them.  EC  (2012a)  Activation  And  Integration:  Working  With  Individual  Action  Plans:  Toolkit  For  Public 
Employment Services;  Bimrose (2012). 

17 

 
 
 
 
                                                            
Table 5: Use of individual action plans within the PES, 2014 

Individual  action  plans  for 
all clients 

Administrative 
filling in action plans 

targets 

for 

Individual  action  plans  only 
for 
groups/ 
programmes 

specific 

Countries  AT,  BE,  BG,  CZ,  DE,  DK, 
EE,  FI,  FR,  HR,  IE,  LT, 
MT, PT,SE, SI, SK, UK 

AT,  BG,  CZ,  DE,  EE,  FI, 
HR, LT, PT 

CY,  EL,  ES,  IT,  LU,  LV, 
NL, PL*, RO, SK 

Source: European Network of Public Employment Services, 2014 questionnaire on business models. 
*To be extended to all clients according to new legislation 

Administrative targets for completion of action plans range from 3 days in the UK to 5 months in the 
Czech Republic. Some PES use action plans only for certain categories e.g. workers younger than 25 
and older than 50 unemployed for more than 6 months in Poland or workers below 50 in Belgium 
(Brussels region), or recipients of unemployment benefits in Portugal. For some other PES, individual 
action plans are not formalised and come close to job-search counselling sessions (e.g. in Greece, 
Malta or Romania). Evidence from PES peer learning indicates that in some countries (e.g. in SK, LT) 
profiling and individual action plans systems within the PES were abandoned under the pressure of 
high caseloads during the crisis. 

Social integration contracts 

Social  integration  contracts  offered  by  social  assistance  authorities  target  a  segment  usually  more 
remote from the labour market48. Integration contracts differ from action plans insofar as they focus 
on addressing the social conditions underlying the unemployment spell and focus on enabling social 
services  –  psycho-social  counselling,  housing  support  or  debt  counselling  for  instance.  Integration 
contracts target beneficiaries of unemployment/social assistance and are drawn up by social assistance 
agencies , while IAPs are managed by the PES. 

12 MS provide integration contracts that target beneficiaries of social assistance, guaranteed minimum 
income scheme or recipients of specific programme schemes. Except for DE these countries have both 
IAPs  within  the  PES  and  integration  contracts  in  the  social  assistance  agencies.  Nevertheless,  apart 
from France and Portugal, there is no formalized transition foreseen between action plans drawn up 
by  the  PES  and  integration  contracts.  Their  incidence  is  hard  to  assess,  as  they  are  rather  localised 
initiatives. This creates a duality of support between PES and social authorities in the 12 MS where 
they  are  offered.  Two  countries  developed  a  seamless  approach,  integrating  them  with  IAPs  in  a 
common instrument (DE, UK).  

Most  integration  contracts  provide  individualized  support  for  the  unemployed.  In  7  MS,  signing  an 
integration  contract  is  an  obligatory  requirement  in  order  to  receive  social  assistance  benefits. 
Integration contracts may include a plan defining which steps have to be taken in order to reintegrate 
the  unemployed  into  the  labour  market  (in  BE,  DE,  ES,  FR,  LU,  PT,  SI)  or  can  be  linked  with 
activation measures (in BE, DE, ES, FR, LU, PT). 

48  Social  integration  contracts  state  the  obligations  of  beneficiaries  of  unemployment/social  assistance  and  their  rights, 

particularly to social services and benefits. 

18 

 
 
 
 
                                                            
Higher  intensity  interventions  with  reduced  caseloads,  in  the  range  70-100  clients/  employment 
counsellor  impact  positively  employment  outcomes  and  client  satisfaction49.  Individual  follow-up 
offers further gains in tackling lack of motivation and complex barriers to work. However, intensified 
individual  follow-up  occurs  sporadically  and  generally  is  programme-based:  19  MS  lack  dedicated 
LTU counsellor roles50.  

3.5.3.  Low employer engagement 

A second  driver of ineffective activation  design  is the  low employer engagement. Effectiveness of 
activation measures depends on the degree of employer buy-in. 58% of employers surveyed in 5 MS 
find government support ineffective for dealing with LTU51.  

Firstly,  developing  an  employer  service  offer  which  builds  a  long  term  direct  relationship  to 
employers leads to improved LTU placement results52. The PES allocate between 4% (HR or EL) to 
20% (LV or LT) of staff to employer services53.  

Secondly, employment incentives generally increase LTU transitions to employment but can have high 
displacement  effects54.  Even  if  48%  of  ALMP  LTU  participants  benefit  from  employment 
incentives55, such schemes are grossly under-funded. In actual spending on LTU, 26% of the ALMP 
budgets are spent on employment incentives.  This can further the risk for placement in low quality, 
unsustainable  jobs,  a  concern  expressed  by  the  European  Trade  Union  Congress  (ETUC)  in  the 
consultation56. 

Often,  the  MS'  nominal  commitment  to  private  employer  support  is  not  followed  through.  31%  of 
ALMP  expenditure  for  LTU  goes  to  public  works,  more  than  the  expenditure  for  employment 
incentives57.  There  is  however  ample  evidence  on  the  ineffectiveness  and  inefficiency  of  such 
programmes  on  returns  to  employment58.    Public  work  schemes  show  however  a  high  degree  of 

49    Evaluations  in  DE,  PT  and  NL  show  higher  transitions  to  employment  with  the  requirement  to  attend  more  frequently 
PES and obligatory ALMP participation (where refusal was sanctioned) Martins and Pessoa (2014), Dengler et al. (2013), 
Georges et al (2008).  In FR, LTU intensified support increased both transitions to employment and client satisfaction.   
50 Individual follow-up / case management designates a one-to-one stable relationship between an employment counsellor 
and  a  jobseeker,  while  IAPs  are  formalised  agreements  with  the  institution  and  the  jobseeker.  Individual  follow-up 
including  referral  to  additional  support  services  was  found  to  be  effective  in  increasing  transitions  to  employment  in 
evaluations  in  DE,  FR,  DK,  EE.    EC  (2014b)  -  PES  approaches  for  sustainable  integration  of  long-term  unemployed; 
Annex 2 Table 4. 

51  IPPR  (2015)  –  European  Employers'  Perspectives  on  long-term  unemployment,  recruitment  and  public  employment 

services. A total of 2552 employers were surveyed in UK, DE, ES, FR, SE in late 2014. 

52 EC (2012b) - Effective services for employers - Forging partnerships for the future Employment services include pre- and 
post- placement support and counselling provided by employment services. There is wide support for a stronger employer 
dimension in the actions addressing LTU among the contributions received to the stakeholder and the public consultation. 
The  PES Network, EASPD, Eurocities emphasize the need to enhance service provision and to create win-win support 
structures for both LTU and employers. 

53 Annex 2 Table 5. Few MS (SE, DE, DK) are currently piloting dedicated employer counsellors for LTU integration. 
54  The  scale  and  scope  of  hiring  subsidies  programmes,  the  type  (subsidies  of  wage  or  non-wage  costs,  subsidising  social 
security contributions, and refund mechanisms), their duration and conditionality strongly influence their attractiveness.EC 
(2014c) - Stimulating job demand: the design of effective hiring subsidies in Europe;  Crepon B. et al (2013). 

55 Correspondingly, 50.6% of ALMP expenditure targeting LTU is allocated to employment incentive measures and 32.9% 

to public works/ direct job creation measures. 

56  Low  spending  per  participant  in  employment  incentive  schemes  reduces  significantly  their  effectiveness.  EC  2014c, 
Sjögren and Vikström (2015). In the public consultation, organisations were aware of the existing support to employers. 
Opinions were split on its effectiveness, with many organisations considering it both sufficient and effective. 

57 Public works or public job creation designate programmes in which state agencies organise work, which is additional to 
open  market  demand  for  the  unemployed,  in  return  to  payment.  In  terms  of  per  capita  spending  per  year,  spending  on 
public work LTU participants is on average 9.605 Euro/year, while spending on private employer incentives is on average 
3.288 Euro/year.  

58 Meta-evaluations of private employer support versus public job creation in Card et at 2010, Kluve 2010.  

19 

 
 
                                                            
resilience.  In  a  survey  from  2013,  their  average  duration  was  no  less  than  17  years59.  Public  work 
schemes were expanded during the crisis in HU, LV, LT and CZ and new schemes were adopted in 
2014 in SI and EL. 

Figure 10: Distribution of expenditure by category of LMP measure and by LTU status, EU, 2012 (%) 

40

35

30

25

20

15

10

5

0

Total

LTU

Non-LTU

40

35

30

25

20

15

10

5

0

Training

Employment
incentives

Sheltered
employment and
rehabilitation

Public works

Start-up support

Source: DG-EMPL, LMP database (own calculations) 
Note: Data not available for EL, CY and UK in 2012. These are therefore excluded from the EU figures 

3.5.4.  Support is not always leading to increased employability 

A  third  driver  of  ineffective  activation  design  is  the  lack  of  employability  relevance  of  support. 
Skills  mismatches  are  a  root  cause  of  LTU,  increasing  with  duration  of  unemployment60.  Broader 
unemployed  participation  in  training  and  life-long  learning  is  associated  to  higher  transitions  to 
employment61.  In  spite  of  this,  training  is  one  of  the  least  frequently  offered  ALMPs,  making  up 
15.7% of LTU participations in ALMPs, corresponding to 20.8% of ALMP expenditure62. The joint 
employers' contribution emphasises the need to align training to the employer's needs63. 

59 EC (2013a) – Public Works: How can Public Employment Services contribute to increasing their value as an activation 

tool? 

60 Arpaia A. et al (2014); Orlandi (2012) finds that sector mismatches have a strong bearing on structural unemployment.  
61 Annex 2 Fig.13. 
62 Relative to the other unemployed, adult LTU (over 25 years old) have particularly limited access to training: only 13.3% 
of  ALMP  support  takes  the  form  of  training  for  these  participants,  corresponding  to  18.2%  of  expenditure.  The 
contribution of Eurocadres emphasises increasing the efficiency of training and life-long learning. 

63 59% of public consultation respondents consider that access to training in not sufficient and that training is not efficient. 

Unlike most individuals, most organisations replying find training provision efficient.  

20 

 
 
 
 
 
 
 
 
 
 
 
                                                            
Figure 11. Distribution of participants in LMP measures by category and LTU status EU, 2012 (%) 

50

45

40

35

30

25

20

15

10

5

0

Total

LTU

Non-LTU

50

45

40

35

30

25

20

15

10

5

0

Training

Employment
incentives

Sheltered
employment and
rehabilitation

Public works

Start-up support

Source: DG-EMPL, LMP database (own calculations). 
Note: Data not available for EL, CY and UK in 2012, which are therefore excluded from the EU figure. 

Workers lacking basic skills or formal qualifications are more affected by LTU. Results of OECD’s 
Adult Skills Survey show that 20% of Europeans have inadequate basic literacy and number skills and 
in the case of digital skills the figure increases to 25%64 Low skilled unemployed are four times less 
likely to participate in life-long learning65.  In order to benefit from suitable training, boosting their 
basic skills is required. 

 Support for basic skills is sparingly integrated in support, with 7 MS offering LTU some support for 
addressing  basic  skills66.  Upskilling  the  low-skilled  long-term  unemployed  is  a  complex  long-term 
project  for  which  their  period  of  unemployment  can  be  put  to  good  use.  The  process  builds  on  the 
assessment  of  each  individual’s  skills  and  skills  needs,  can  include  validation  and  accreditation  of 
existing skills and follows up with referral to a training course/ adult education, preferably including 
on-the-job training, supported by counselling and guidance throughout the path to stable employment. 
An essential ingredient for such a complex process is cooperation between employment services and 
private or public adult education services.  

Start-up  support  increases  employability  of  the  unemployed  with  lower  skills  or  part  of  vulnerable 
groups.  In  few  MS,  start-up  subsidies  are  targeting  explicitly  LTU.  Even  if  not  leading  to  higher 
overall  job  creation,  their  re-employment  effects  are  generally  positive67.  Start-up  support 
programmes however represent 8.4% of participations and 4.7% of expenditure of ALMP measures 
for LTU68.  

64 EC (2013) - The Survey of Adult Skills (PIAAC): Implications for education and training policies in Europe. 
65 Eurostat LFS 2014; EU High Level Group of Experts on Literacy (2012) – Final Report. 
66  EC  (2015)  –  Upskilling  unemployed  adults.  Regular  referrals  to  basic  skills  (second  chance)  education  were  only 
identified  for  young  jobseekers:  In  DK,    starting  with  2015  all  unemployed  below  30  who  are  early  school  leavers  are 
referred  first  to  educational  programme  to  complete  their  qualifications.  In  FR  the  planned  "New  Chance" 
professionalization contract will target improving basic skills for young LTU remote from the labour market.  

67 Caliendo and Künn (2010); EC (2014d) - Activating jobseekers through entrepreneurship: Start-up incentives in Europe. 
68  Most  respondents  to  the  public  consultation  (both  individuals  and  organisations)  agree  that  there  is  insufficient  start-up 

support for the long-term unemployed.   

21 

 
 
 
 
                                                            
4.  THE ENVISAGED INITIATIVE  

4.1.  Objectives 

The general objective is to support MS to increase the rate of transitions from LTU to employment.  

Within this general framework, the specific objectives of this initiative are to support MS to:  

(1)  Increase coverage with higher registration and active support for the long-term unemployed  
(2)  Ensure continuity and coordination between relevant services  
(3)  Increase the effectiveness of interventions aimed at both long term unemployed and 

employers; 

4.2. 

Job integration agreements 

The  proposed  initiative  combines  the  introduction  of  the  Job  integration  agreements  (JIAs)  for 
jobseekers at the latest when they reached 18 months of unemployment with general policy guidance 
on  individual  assessment  and  on  strengthened  links  with  employers.  The  threshold  of  18  months  is 
chosen due to the large drop in transitions to employment between 12 and 24 months (Figure 4) and to 
match existing dates for intervention. Most MS proposing similar interventions act within the period 
(SE and FI at 10 months; UK and DE at 12 months; DK (pilot) at 16 months).  

The design of the JIAs builds on three steps which open a pathway to job integration: (1) encourage 
registration with an employment service; (2) assess individual needs and potential; (3) propose a plan 
for return to work under a JIA approach. These three elements can be implemented in a flexible way 
corresponding to the specific situation in MS. 

JIAs would consist in a written agreement covering the service offer and the obligations, between the 
jobseeker  and  a  single  point  of  contact  within  an  employment  or  social  service.  To  allow  a  lower 
caseload  and  intensified  support,  the  JIA  would  be  targeted  to  beneficiaries  at  the  latest  when  they 
reach 18 months of unemployment, irrespective of age or qualification levels. 

The creation of the single point of contact will not require full integration of employment services and 
(social)  benefits  disbursement.  It  could be  set  up  through  inter-institutional  cooperation,  focused  on 
the relation with the client. 

JIAs would also include intensified individual follow-up (or 'case management') entailing intensified 
provision of employment services (counselling, guidance) and step-by-step monitoring of job search 
efforts.  

The policy guidance would serve to place JIA into a minimum frame of action common for all MS: 
  The  (re-)assessment  of  the  individual  skills,  needs  and  prospects  of  all  registered  LTU  before 
reaching 18 months of unemployment, based on the individual employment and support history. 
  The re-orientation of ALMPs away from public works towards employer incentives, services for 

employers and reinforced up-skilling and start-up support for LTU. 

The  target  group  would  avoid  any  overlap  with  the  Youth  Guarantee.  MS  which  do  not  have 
integration agreements along the lines outlined above would be required to set them up for the target 
group.  

Implementation can be expected to be gradual. All MS offer currently support to the LTU, using both 
national  and  ESIF  financing  (primarily  ESF).  Such  support  can  be  re-structured  and  integrated  in 

22 

 
 
 
JIAs.  Countries  with  consolidated  systems  will  be  encouraged  through  the  recommendation  to 
institute a "last call" point of intensification of effort. 

A  Council  recommendation  can  provide  MS  specific  guidance  on  the  policy  pathway,  whilst 
accepting  MS  discretion  in  adapting  implementing  measures  to  national  institutions  and  delivery 
models. This is in line with the principle of proportionality in Article 5 TFEU and meets the concerns 
raised by several MSs on the degree of prescription of the initiative.   
The recommendation introduces the approach of Job integration agreements, which will act as a focal 
point  of  integration  support  for  the  long-term  unemployed.  Under  this  approach,  the  following 
elements of flexibility for Member State implementation are included:  

-  deciding  the  content  of  the  offer  included  in  the  Job  integration  agreement  to  best  tailor  the 
individual circumstances of the beneficiaries and the labour market conditions;  it can be focused on 
employment services, ALMP measures or social support services or a mix thereof; 
-  choice  of  organisations  providing  the  Job  integration  agreements  and  of  the  coordinating 
organisation (governments, PES, regional or local authorities); 
- choice of public or private provision of support included in Job integration agreements; 
- the organisation of the single point of contact – whether this would be done through cross-referrals, 
data  exchange,  or  wider  organisational  restructuring  such  integration  of  front-office  functions,  co-
location or transfer of organisational functions between agencies; 
- the organisation of personalised services, whether this would take the form of a personal counsellor 
providing case management or would include on-line channels for follow-up  
- the  means to  reach  higher registration, more employer involvement and  more relevant  support for 
employability. 

5.  ARTICULATION WITH EXISTING MEASURES 

5.1.  Links with other policy instruments 
LTU has been identified by the Council (ECOFIN and EPSCO) and the ECB69 as an impediment to 
growth and as a key challenge in the 2015 Annual Growth Survey.  

A number of initiatives at EU level are already in place to support employment, notably the European 
Semester  recommendations  and  Employment  Guidelines,  the  European  Structural  and  Investment 
Funds – in particular the European Social Fund (ESF) and the European Regional Development Fund 
(ERDF), and mutual learning.  

5.1.1.  The EU Semester process 

The  Council  recommendation  will  support  implementation  at  national  level  of  the  European 
Employment Strategy and of Europe 2020 goals on increasing employment rate and reducing poverty.  

The  overall  objectives  of  the  European  Semester  process  of  economic  policy  coordination  are 
supported by the integrated guidelines, which include both the Broad Economic Policy Guidelines and 
the  Employment  Guidelines.  The  former  guidelines  cover  priorities  such  as  boosting  investment, 
implementing  structural  reforms,  and  improving  the  coordination,  sustainability  and  growth-

69 http://www.ecb.europa.eu/press/key/date/2014/html/sp140822.en.html. 

23 

 
 
 
 
 
                                                            
friendliness of public finances in order to contribute to growth and jobs at EU level. The latter ones 
cover  priorities  such  as  facilitating  job  creation,  enhancing  labour  and  skills  supply,  enhancing  the 
functioning of labour markets, ensuring social protection and fighting against poverty.  

Within  the  European  Employment  Strategy,  the  current  Employment  Guidelines  aim  to  address 
structural  barriers  linked  to  rigidities  on  the  labour  market  and  inadequate  skills  or  insufficient 
investment  in  human  capital.  Elements  in  these  areas  which  feature  prominently  in  the  country 
specific  recommendations  include  reducing  financial  disincentives  to  work,  adjusting  wage-setting 
mechanisms  and the benefits, shifting the tax burden away from labour, strengthening active labour 
market policies and modernising vocational education and training and apprenticeships. 

In  addition,  the  newly  proposed  Employment  Guidelines  propose  to  reduce  LTU  "by  means  of 
comprehensive and mutually reinforcing strategies, including the provision of specific active support 
to long-term unemployed to return to the labour market"70. 

The  2015  country  specific  recommendations71  acknowledge  that  LTU  needs  to  be  tackled  by 
combining effective social assistance with employability. In this respect, they stress that efficient and 
effective vocational education and training programmes, including targeted adult learning play a key 
role in improving employability. They also note that the role of the PES needs to be strengthened in 
some  MS  and  that  active  labour  market  tools  could  be  more  efficiently  targeted  to  support  the 
inclusion of those furthest from the labour market. 

Structural  reforms  of  labour  markets  will  have  an  impact  on  the  LTU  level  in  the  medium  to  long 
term,  as  policy  transmission  channels  take  time  to  impact  the  labour  market.  By  adding  a  focus  on 
LTU, the current proposal can support that this group benefits from positive developments on labour 
markets  quicker  than  otherwise,  in  combination  with  structural  labour  and  product  market  reforms. 
Moreover,  in  the  context  of  the  streamlined  European  Semester,  country  specific  recommendations 
(CSRs)  focus  on  issues  where  reform  is  macro-economic  relevant  and  requires  urgent  attention72. 
Thus, LTU might not be mentioned in the CSR even if LTU is high in a particular MS. By providing 
specific guidance on the process of addressing LTU, the recommendation complements the analysis 
and guidance provided in the European Semester through country reports and CSRs.  

A common action framework aimed at increasing the performance of all MS would offer a basis for 
subsequent analysis of reforms and progress. For countries addressing CSRs related to LTU or related 
areas (activation or active measures), the recommendation provides further guidance supporting their 
implementation  effort.  For  countries  with  high  LTU  levels  who  do  not  have  CSRs  in  the  area,  it 
provides an EU level impetus for improvement of support to long-term unemployed.  

While the European Semester follows the structural reform priorities for each MS, the initiative would 
complement this through additional guidance, joining up different reform streams in the employment 
and social field with PES and social services capacity building. By reducing divergence in LTU rates, 
the initiative would strengthen the social dimension of the Economic and Monetary Union (EMU). 

70 COM(2015) 98 final. 
71 Council Recommendations on the National Reform Programmes, OJ 215/C 272 of 18.08.2015. 
72 The Commission proposals for CSRs in the 2015 European Semester addressed explicitly LTU in 4 countries (FI, RO, SI, 
SK). In 2014, CSRs for nine countries explicitly mentioned LTU (BG, DE, ES, FI, IE, HR, LT, PT, SK). Under the 2015 
Semester, the Commission identified limited progress in addressing CSRs on active labour market policies (COM(2015) 
85 final – Annex 2) and pointed to the "need to strengthen the capacity of their Public Employment Services to fight LTU" 
(COM(2015) 85 final). 

24 

 
 
                                                            
5.1.2.  Support  to  the  long-term  unemployed  through  the  European  Structural 

and Investment Funds 

ESF-supported activation measures were equivalent to around 20% of the total ALMP expenditure in 
the  EU  between  2007  and  201373.  The  LTU  account  for  29%  of  the  unemployment  allocations 
supported by the ESF, slightly higher than in corresponding national ALMPs74. Relative to the high 
LTU rates of the period, the same pattern of under-investment applies, particularly in MS with high 
LTU75.  

Table 6. Share of ESF allocations to unemployed and long-term unemployed 

ESF allocation, EU28 

Share of unemployed in ESF beneficiaries 

         …of which: long-term unemployed 

Share of long-term unemployed in total beneficiaries 

2007-2013 

2014-2020 

31,3% 

28,2% 

8,8% 

> 41% 

> 25% 

> 10% 

Source: DG Employment estimates based on past and current ESF programming 

On the basis of current programming for 2014-2020, the unemployed will constitute at least 41% of 
the allocations supported by the ESF; at least 25% of these will be for the long-term unemployed76.  

The 2014-2020 ESF allocations allow room to increase the financing of LTU support and to enhance 
its efficiency. Under investment priority 8i on active labour market measures, 11.08 billion Euro were 
programmed  for  2014-2020,  with  particularly  high  shares  in  SK,  FI,  and  IE.  Under  the  investment 
priority 8vii on increasing the capacity of labour market actors, 980 million were programmed, with 
higher  allocations  in  IT  and  RO.  12,93  billion  Euro  were  programmed  under  the  social  inclusion 
priority (9i), with higher shares in NL, FR, IE, BE. 

Early  results  from  ex-post  ESF  evaluation  identify  on  the  basis  of  interviews  with  programme 
managers  the  following  success  factors  for  programmes  addressing  disadvantaged  groups:  (1) 
effective  referral,  engagement  and  outreach  approaches;  (2)  provision  of  intensive  support;  (3) 
ensuring  access  to  a  relevant  range  of  services;  (4)  ensuring  continuity  in  support  to  participants77. 
The  recommendation  tackles  through  the  approach  chosen  (Job  integration  agreements)  the  entire 
spectrum of improvements identified in the evaluation of the ESF. It reinforces the referral system for 
long-term unemployed to the support needed, it encourages intensive, personalised support, and opens 
access  to  a  broader  range  of  services,  under  a  contractual  framework  which  entails  continuity  of 
support and follow-up. This goes beyond the usual reach of ESF programme-based interventions, as it 
tackles the basic set-up of interventions, on which further ESF interventions can be built.  

73  EC (2014) The 6th Report on Economic, Social and Territorial Cohesion, p 219. 
74 The share of LTU participants in ALMPs was 20% in 2012. The participation rates in Table 6 translate into an estimated 
overall financial allocation to LTU of approximately 2.7 bn €. The estimated financial allocation in 2007-2013 is obtained 
by   multiplying ESF spending on the priorities that could include LTU (31, 9 bn€) by the share of the LTU out of the total 
number of participations (8.8%). 

75 The share of LTU participating in ESF interventions targeting the unemployed ranged from 11% in LU to 86% in HR and 

100% in SE. 

76 Minimal estimate on the basis of the MS having chosen to set targets for the long-term unemployed.  The share will most 

likely be higher, as it is not an obligation to programme for all common indicators. 

77  EC  (2015)  -  ESF  2007-2013  Ex-post  evaluation:  Supporting  the  integration  of  disadvantaged  groups  into  the  labour 

market and society, forthcoming.  

25 

 
 
                                                            
This  also  shows  that  with additional  changes  in  the support delivery  through  the  implementation  of 
the recommendation, existing ESF budgets could be spent more efficiently, in particular in addressing 
issues linked to continuity of support and individualised referrals to support. 

While the European Social Fund (ESF) is the EU's main financial instrument for tackling long-term 
unemployment,  other  funds  like  the  ERDF  may  also  support  the  objectives  of  the  initiative.  In 
addition  to  the  measures  financed  by  ESF,  ERDF  measures  within  the  existing  operational 
programmes  for  2014-2020    can  support  investment  in  infrastructure  for  employment  services 
(investment priority 8d), vocational education and training and skills and lifelong learning (investment 
priority 10), as well as financing for self-employment and start-ups (investment priorities 8a and 3a). 

Ex-Ante conditionalities can also play a role in making sure that jobseekers (including LTU) can be 
better supported78. A number of MS will have to fulfil them by the end of 2016 at the latest and report 
on  fulfilment  in  2017.    Both  ex  ante  conditionalities  8.1  and  8.379  focus  on  the  capacity  of 
employment  services  to  deliver:  (1)  personalised  services  and  active  and  preventive  labour  market 
measures at an early stage, which are open to all jobseekers while focusing on people at highest risk 
of  social  exclusion,  including  people  from  marginalised  communities;  (2)  comprehensive  and 
transparent information on new job vacancies and employment opportunities taking into account the 
changing  needs  of  the  labour  market;  (3)  the  setting  up  of  formal  or  informal  cooperation 
arrangements with relevant stakeholders.  

 The recommendation provides guidance which supports MS who are engaged in strategic changes to 
meet the ex-ante conditionalities. The first and second ex-ante conditionalities are closely related to 
the  first  and  second  specific  objectives  of  the  Council  recommendation.  The  establishment  of  JIAs 
will help implementation of both principles embedded in the conditionalities. However, while ex-ante 
conditionalities can play a role in improving the policy framework for effective implementation, they 
do not focus on long-term unemployed as a specific group and do not cover all elements of service 
delivery.  

The  envisaged  initiative  could  provide  further  guidance  on  how  to  best  achieve  results  with  LTUs 
when  designing  the  framework  and  when  implementing  the  operations.  The  ex-ante  conditionalities 
and the initiative are reinforcing each other and do not duplicate.  

5.1.3.  Mutual learning at EU level 

In terms of sharing of good practices, actions supporting Europe 2020 reform implementation through 
policy  learning  are  taking  place  and  will  continue  (for  example,  regular  peer  reviews  on  LTU  and 
active  labour  market  policies  as  part  of  mutual  monitoring  within  EMCO,  as  well  as  best  practice 
exchange under the Mutual Learning Programme80).  

The  PES  Network  is  currently  developing  a  "benchlearning"  process  to  provide  an  overview  of  the 
performance of PES in all MS, in order to encourage mutual learning (peer-to-peer or group activities, 
analysis,  cooperation,  and  exchanges).  This  will  contribute  to  capacity  building  and  increased 
awareness within the PES on effective ways of developing support for LTU. However, mutual policy 

78 Ex-ante conditionalities aim to ensure that institutional and strategic policy arrangements are in place at the level of the 

Member States for effectively achieving the specific objectives of investment priorities for ESIF funds. 

79 Annex XI – Part I of the Common Provisions Regulation. 
80  A  thematic  event  on  tackling  long-term  unemployment  was  organised  in  November  2012  and  other  events  focused  on 
related  themes,  e.g.  job  creation  incentives  and  segmentation  on  the  labour  market.  Peer  reviews  touched    on  e.g. 
integration support for the unemployed, the activation of the elderly, pathways to work for lone parents, integration in the 
labour market of the Roma community, or public works in activation programmes.  

26 

 
 
                                                            
learning takes place at a technical level and needs support at political level to ensure implementation 
of the agreed solutions. In addition, capacity building in the PES cannot influence the composition of 
ALMPs  and  has  limited  influence  on  social  assistance  authorities.  Therefore,  the  above  mutual 
learning processes are not sufficient to incentivise structural and process changes at the required level 
in the MS. 

5.1.4.  Active inclusion initiatives and fundamental rights 

Previous Commission initiatives focused on the active inclusion approach, encompassing outreach to 
groups  such  as  the  inactive  or  non-registered  long-term  unemployed  that  are  the  furthest  from  the 
labour market and face multiple barriers81.  

The  initiative  reinforces  protection  of  fundamental  rights.  Improving  the  access  to  support  services 
and establishing an individualised services approach for long-term unemployed guarantees and further 
enhances  the  right  to  access  to  free  placement  services  laid  down  in  Article  29  of  the  Charter  of 
Fundamental  Rights  of  the  EU.  Furthermore,  providing  better  protection  of  long-term  unemployed 
duly observes the principles enshrined in Article 34 of the Charter of Fundamental Rights of the EU, 
since it improves the entitlement to social security benefits and social services protection in case of 
loss of employment, helps combating social exclusion and ultimately reinforces human dignity. 

Moreover,  better  individualised  support,  coordination  of  delivery,  assistance  for  return  to 
employment, training and for work experience would also contribute to a better implementation of the 
UN Convention on the Rights of Persons with Disabilities.  

5.1.5.  Reforms undertaken at national level 

LTU  affects  MS  to  a  different  extent,  notably  as  the  impact  of  the  crisis  has  been  uneven  and 
countries differ in terms of macroeconomic situation as well as economic structure and labour market 
functioning. The policy response has also been uneven. 

Economic  recovery  and  lower  inflows  to  LTU  and  the  improved  budgetary  situation  open  up 
opportunities for additional interventions. However, LTU is addressed by current reforms in less than 
half  of  the  MS.  Many  well  performing  MS  (e.g.  EE,  FI,  FR,  NL,  SE)  continue  to  improve  their 
support, while other MS with high LTU rates have not undertaken initiatives (e.g. RO, EL, HR, SK), 
or the initiatives do not address the main problems  (e.g. the launch of new public works programmes 
in EL, HR, SK). The momentum of reform in the MS most affected by unemployment is not likely to 
lead to a substantial change either in terms of priority given to LTU or in enhancing service delivery. 
This risks to increase the divergence in the impact of support and consequently in LTU transitions. 

Several MS launched additional ALMP programmes, combining services and counselling, provision 
of  programme  income,  and  additional  subsidies  for  employers82.  While  such  initiatives  can  have  a 

81 The Social Investment Package (2013) proposed to combine income support, tailor-made activation and access to enabling 
services to enhance support for those furthest from the labour market (COM(2013) 83 final). The Package builds on the 
evaluation  of  progress  in  the  implementation  of  the  2008  Commission  recommendation  on  active  inclusion  (C(2008) 
5737), which observed piecemeal  implementation of integrated and comprehensive active inclusion strategies, due to the 
lack  of  coordination  between  delivery  agents,  scattered  policy  responsibilities  and  variability  in  funding  streams 
(SWD(2013) 39 final). 

82 For example, the Spanish Tripartite Agreement on an Extraordinary Program for Activation and Employment provides an 
additional subsidy of 426 Euro for 6 months to  500.000 LTU  beneficiaries. In exchange, beneficiaries will participate in 
additional  counselling  and  ALMP  measures,  including  placements  with  temporary  work  agencies.  The  programme  is  
temporary and will run from 15 January 2015 to 15 April 2016.  

27 

 
 
                                                            
positive impact, they are limited, addressing the coverage problem with less focus on the problems of 
discontinuity and activation design. 

After  dropping  for  the  last  5  years  by  a  total  of  10%,  expenditure  on  public  employment  services 
began  stabilising  during  the  last  two  years.  In  2014,  a  small  increase  of  expenditure  on  public 
employment services occurred in most MS83.  

Creating  a  coherent  referral  and  support  system  for  LTU  requires  structural  holistic  change.  Such 
changes occurred only in a handful of MS during the last decade (CZ, DE, EE, IE, FI)84 and none of 
the countries with above average LTU rates undertook the process.  

5.1.6.  Additional action needed 

Addressing  the  specific  challenges  linked  to  long  duration  of  unemployment  requires  additional 
policy  guidance  and  a  more  coordinated  approach  at  EU  level  in  addition  to  and  supporting  the 
existing frameworks.   

Existing national and EU initiatives can be expected to address the problem of insufficient coverage 
only  partly.  Smaller  inflows  to  LTU  during  recovery  and  the  launch  of  additional  programmes  in 
some MS can allow a partial re-direction of ALMPs towards LTU. Additional ESF support explicitly 
targets  the  LTU  in  the  MS  which  received  CSRs  in  the  area  in  2013,  further  reinforcing  provision. 
However  such  interventions  are  mostly  programme-based,  and  cannot  be  expected  on  their  own  to 
systematically  improve  the  coherence  of  the  support  system  and  the  enforcement  of  benefit 
conditionality.  

The problem of lack of continuity is likely to be least addressed by current initiatives. Recent national 
reforms  led  to  better  coordination  only  in  a  few  MS,  e.g.  in  ES  through  joint  evaluation  of  ALMP 
programmes and the introduction of performance criteria for the allocation of funds on in IT through 
the start of the reinforcement of a central PES.  

The  problem  of  ineffective  design  of  interventions  can  only  be  partly  alleviated  through  existing 
mutual  learning.  The  PES  Network  can  influence  performance  management  in  the  PES  and  models 
for  delivery  of  both  individualised  services  and  employer  services.  However,  the  establishment  of 
partnerships  and  lasting  cooperation  between  different  authorities,  as  well  as  the  required  shifts  in 
active measures, go beyond the PES remit.  

Divergent  labour  market  national  performance  in  terms  of  LTU  rates  and  transition  from  LTU  to 
employment may have both negative economic impacts and undermine social cohesion across the EU. 

The  persistence  of  LTU  can  have  a  dampening  effect  on  economic  growth  and  is  detrimental  to 
potential output growth in the medium term.  The longer the active  population remains unemployed 
the more the risk that skills will be lost and the LTU may leave the labour force. This would imply 
both a waste of resources and an increase in social costs. A long period of unemployment can lead to 
an  increase  of  NAIRU  (non-inflationary  rate  of  unemployment)  and  a  reduction  in  the  growth 
potential  of  the  most  affected  MS  and  of  the  EU  as  a  whole85.  A  lower  growth  potential  renders  it 

83 EC (2015) – Assessment report on PES Capacity.  
84 Scharle (2015). With only incremental steps towards cooperation and integration of services, NGOs and ESF projects will 
continue  to  act  as  brokers  across  the  organisations  in  charge,  bridging  separate  streams  of  provision.  These  are  the 
predominant  coordination  mechanism  in  countries  such  as  IT  and  PL  identified  in  Heidenreich  and  Aurich-Beerheide 
(2014), article of FP7 project LOCALISE.  

85 Ball (2014), cf. EC (2014) - ECFIN’s medium term projections: the risk of ‘secular stagnation’. 

28 

 
 
                                                            
more difficult to reduce public deficit and debt levels which exploded during the crisis. High LTU is 
thus a source of rigidity and further vulnerability in the economic recovery. 

Social  cohesion  is  one  of  the  Treaty's  general  objectives.  However,  the  problem  definition  has 
demonstrated that the current national divergences regarding LTU support can grow further. Persistent 
long-term  unemployment  leads  to  skill  erosion  and  obsolescence  and  lower  utilisation  of  human 
capital  in  a  context  of  demographic  decline.  It  is  a  strong  source  of  social  exclusion  and  a  serious 
obstacle to the achievement of Europe 2020 goals.  

In  conclusion,  additional  action  is  required:  "The  situation  of  young  people  and  the  long-term 
unemployed  in  particular  requires  determined  action.  Benefit  systems  should  combine  adequate 
income replacement with activating and enabling services targeted at individual needs and delivered 
through one-stop shops (AGS 2015)". 

The recommendation would complement and support action at national level since: 

a) It will create a Political Momentum 

The Youth Guarantee has shown that a recommendation adopted by the Council increases ownership 
and  gives  a  stronger  political  signal  than  cooperation  at  technical  level.  A  politically  visible 
commitment  centred  on  one  delivery  approach  with  citizen  visibility  deepens  mutual  learning  and 
creates stronger impact than purely technical exchange on good practice. 

Recognising  the  relevance  of  an  EU  level  policy  response,  the  Council  invited  the  Commission  "to 
develop proposals to help support the long-term unemployed, taking lessons from the introduction of 
the  Youth  Guarantees  across  the  EU,  while  fully  integrating  them  into  the  European  Employment 
Strategy". 

b) The issue concerns all the MS 

The  performance  of  MS  in  supporting  LTU  towards  re-employment  varies  significantly,  partly 
because MS with low performance have not put in place adequate and effective integration policies, 
but also due to other factors such as overall macroeconomic performance and rigidities in product and 
labour  markets.  There  is  scope  for  performance  improvement  in  most  of  the  MS  to  address  in  an 
integrated  way  the  three  problems  identified  (coverage,  discontinuity,  activation  design),  thus 
allowing the economic recovery to translate more swiftly into a return to work for more of the long-
term unemployed. 

The initiative will cover all MS with the aim to support a general improvement in the efficiency and 
modernisation of the integration process. It translates the lessons from mutual learning into an action 
framework aiming to raise service delivery performance in all MS. This should contribute in aspects 
related to LTU to the overall EU efforts towards upward social convergence. 

c) Need to reinforce and complement existing EU level interventions 

The recommendation will complement and reinforce the effectiveness of the existing tools. Providing 
a  foundation  for  prioritising  support  aimed  at  job  finding  for  the  long-term  unemployed  at  national 
level,  it  encourages  the  allocation  of  necessary  resources,  including  support  from  the  European 
Structural  and  Investment  Funds.  It  also  provides  an  impetus  for  greater  administrative  capacity, 
better cooperation between service providers and efficiency in public spending. 

5.2.  Lessons learned from the Youth Guarantee 

The Youth Guarantee (YG) was  established by the Council  in 2013 to address high levels of youth 
unemployment  and  inactivity  resulting  from  the  crisis  and  to  improve  school  to  work  transitions. 

29 

 
 
Similar  to  the  current  initiative,  the  YG  proposes  an  intervention  model  based  on  an  individual, 
coordinated offer. The current initiative also includes a three–step approach: registration, assessment 
and an offer, similar to the YG model. 

A full evaluation of the early impacts of the YG will be available in 2016. However, the evolution of 
youth employment following adoption and implementation reports already suggests a positive impact.  

  The adoption of the Council recommendation and the political momentum that it created enabled 
the  adoption  of  Youth  Guarantee  Implementation  Plans  by  each  Member  State.  Already  the 
drawing  up  of  these  plans  and  the  setting  up  of  the  YG  schemes  created  new  structures  (for 
example YG coordinators) and ways of working together in the MS. 

  The  recommendation  acted  as  basis  for  many  of  the  CSRs  on  youth  employment  in  the  first 
European Semester in which the implementation of the Council recommendation was monitored. 
In 2014 there were 18 CSRs on youth employment (of which 8 explicitly mentioned the Youth 
Guarantee).  

  The  Employment  Committee  (EMCO)  –  in  its  preparation  of  Council  deliberations  -  pursues 
multilateral surveillance on Youth Guarantee implementation. To underpin monitoring and multi-
lateral surveillance, an Indicator Framework for Monitoring the Youth Guarantee was developed. 
This  form  of  multilateral  surveillance  within  the  Council  and  across  MS  not  only  provides  for 
thorough  evaluation  and  continuous  improvement  of  schemes,  but  also  enables  peer  learning, 
creates peer pressure and strengthens ownership of the MS. 

  The implementation of the YG acted as a driver for structural reforms in MS and has already lead 
to  first  successes  on  the  ground.  Reforms,  including  for  example  the  stepping-up  of  early 
activation  and  intervention  measures,  the  strengthening  of  Public  Employment  Services  for  the 
delivery of the YG, a renewed focus on the quality of education and training systems and better 
school to work transitions could be observed in many MS.  

  Since  the  inception  of  the  YG  there  has  been  a  noticeable  decline  in  youth  unemployment.  In 
April 2015, compared with April 2013, youth unemployment decreased by 935 000 in the EU28. 
The youth unemployment rate was 20.7% in the EU28, compared with 23.9% two years ago. 

The  monitoring  and  regular  reporting  on  developments  concerning  the  design,  implementation  and 
results  of  Youth  Guarantee  schemes  are  part  of  the  annual  programme  of  work  of  the  European 
Network  of  Public  Employment  Services.  Qualitative  reports  on  the  impact  of  the  YG  on  service 
provision in the PES demonstrates that a Council recommendation can produce significant changes to 
support  delivery  models,  leading  to  increased  effectiveness  of  delivery.  Most  PES  recognise  a 
significant impact of the initiative on their delivery capacity86.  

Within  the  PES,  implementation  lead  to  a  mainstreaming  of  a  partnership  approach  (in  25 PES),  to 
resourcing  specialist  youth  caseworkers  (in  18  PES)  and  specific  management  targets  (in  18  PES). 
Two  thirds  of  PES  have  engaged  in  outreach  work  aiming  for  higher  registration  rates,  including 
through proactive partnerships and awareness campaigns and increased use of e-services87. 

Almost half of PES have also developed pilot projects on youth employment in 2014. These include a 
strong focus on disadvantaged and vulnerable youth groups. Over half of PES also provided staff with 
training on specific aspects of working with young people in 2014.  

86  EC  (2014)  –  The  Role  of  PES  in  the  Delivery  of  the  Youth  Guarantee;  PES  Network  Self-assessment  Report  on  PES 

capacities to implement the Youth Guarantee. 

87 EC(2015) – Report on PES Implementation of the Youth Guarantee.  

30 

 
 
 
                                                            
Since  April  2013  (date  of  adoption  of  the  Youth  Guarantee  recommendation),  the  youth 
unemployment  rate  in  the  EU  started  to  decrease:  from  23.9%  or  about  5.7  million  people  (April 
2013) to 20.7% or about 4.75 million people in April 2015. The youth unemployment rate fell more 
than  one  would  expect  on  the  basis  of  the  relationship  between  youth  unemployment  and  GDP 
growth. 

Based on the experience of the Youth Guarantee, the design of the initiative addresses a number of 
points  of  concern  raised  in  the  European  Court  of  Auditor's  Special  report  on  the  EU  Youth 
Guarantee. By stating clear requirements for a JIA and by defining as a clear outcome re-employment, 
the initiative gives orientation on a "quality offer" to the jobseekers88.  

Secondly, by  proposing  a monitoring  framework  from  the  outset  (included  in  Section  8  below),  the 
initiative would allow tracking progress in implementation from the very beginning.   

It is crucial for ensuring a genuine individual approach that the choice of the offer done within JIAs is 
not pre-defined. The type of support offered (provision of employment services, of ALMP measures 
such  as  employment  incentives,  training,  start-up  support,  or  referral  to  social  services  or  further 
education)  should  be  defined  based  on  the  individualised  assessment  and  on  local  labour  market 
needs.  While  allowing  autonomy  in  the  choice  of  offer,  it  is  important  to  ensure  accountability  and 
value  for  money  through  a  sound  monitoring  framework.  The  quality  of  employment  outcomes  in 
terms  of  sustainability  of  re-employment  and  of  the  type  of  labour  contract  are  captured  by  the 
indicators proposed.  

6.  EFFECTIVENESS OF THE ENVISAGED RECOMMENDATION 

The  analysis  of  the  overall  effects  is  based  on  experience  from  MS  that  have  already  introduced 
similar measures. In the analysis of coordination of support, individualisation and employer relevance 
(Objectives 2 and 3), both the mechanism of impact and the effectiveness in increasing transition rates 
are  presented,  privileging  among  the  sources  used  published  evaluations  with  control  groups  and 
systematic reviews. While for each sub-section the analysis integrates evidence from evaluations in 5-
8 MS, generalisations to EU level impact should be read with caution, as the fit of each scheme and 
the effectiveness may vary across MS.   

6.1. 

Increasing coverage of activation support (specific objective 1)  

Reinforced support in a single point of contact has an outreach effect. The experience of countries that 
established one-stop-shops confirms its positive effect on extension of both registration and coverage 
of employment services89.  

The  table  below  presents  the  target  group,  based  on  up  the  stock  of  registered  LTU  over  30 
unemployed  for  at  least  18  months,  as  well  as  the  effective  target  group  (excludes  countries  which 
offer JIAs or quasi-universal coverage of LTU (DE, DK, SE, UK). Data for IE is missing.  

Table 7: Coverage of LTU support 

89 Introduction of the one-stop-shop, coupled with benefit reform in Germany lead to rise in open unemployment and a 

decrease of hidden (non-registered unemployment) Eichhorst et al (2006). A similar effect in registration was observed 
shortly after the introduction of the Jobcentre Plus in the UK (Riley et al(2011)), and identified as a general trend in 
reforms. Minas (2014) FP7 Project INSPIRES; Koch et al (2009). 

31 

 
 
 
                                                            
 
1 
2 
3 
4 

Target group ( registered LTU - thousands)  
Effective targeting 
Net additional expected coverage  

On ALMP 
On Employment Services 

Numbers (1000) 
4797 
3923 
Subject to MS 
implementation and 
budgetary constraints. 

Source: Own calculations based on LFS 2013 data, ad-hoc transitions calculations and the LMP Database. 

 It is not possible to provide an ex-ante assessment of the expected increase in coverage of services 
and  measures,  based  on  the  introduction  of  the  offers  within  the  JIAs.    Experience  in  the  countries 
which have already introduced JIAs shows that more precise targeting of individual needs would lead 
to  a  significant  shift  of  resources  from  ALMPs  to  employment  services.  As  the  cost  ratio  of 
employment  services  to  ALMPs  can  be  roughly  estimated  at  3:1,  this  would  entail  an  increase  of 
coverage of long-term unemployed through employment services. MS retain however flexibility in the 
establishing the balance between ALMP measures and employment services in their provision mix, as 
well as control of resources allocated to LTU relative to other groups.  

JIAs  targeted  by  duration  (at  the  latest  when  having  reached  18  months  of  unemployment)  offer  a 
balanced  impact  geographically,  with  relatively  high  impact  in  weak  support  countries  and  thus 
lowest  deadweight  loss.  Given  that  on  average  the  low  skilled  and  the  older  workers  have  higher 
registration rates with the PES, increased coverage by duration will also benefit these groups.   

6.2.  Continuity and coordination in support delivery (specific objective 2) 

Two mechanisms ensure continuity in support delivery: 1) A systematic referral system to the support 
needed and 2) Data sharing mechanisms across organisations. 

Degree of coordination already in place: 

Single point of contact 
CZ, DE, DK, FI, IE, NL, UK 

Based on Table 3 above.  

Partnerships / data exchange 
AT,  BE,  CY,  EE,  ES,  FR,  HU,  LU,  PL, 
PT, SE, SI, SK 

No formal coordination 
BG, EL, HR, IT, LT, LV, MT, RO 

Table 8. Coordination of support delivery 

Mechanism 
Systematic  referral  through 
single  point  of  contact  to 
services,  measures 
and 
benefits 

Impacts on coordination and transitions to employment 
The  introduction  of  single  point  of  contact  led  to  increased  re-employment 
probabilities  and  off-flows  from  benefits  in  the  UK  and  accelerated  job 
finding among the long-term unemployed in DE, while improving the quality 
of occupational matches90.  

Intensified 
through 
contact 

intervention 
single  point  of 

In  DE,  the  “Berlin  Job-Offensive”  offered  intensified  counselling  and 
guidance by reduced caseloads (to 1:100) and higher contact intervals (every 
4 weeks), increasing transitions to employment91. 

Improved  monitoring  of  job  search  activity  and  more  credible  threats  of 
sanctions also increased transitions to employment in DE, DK and EE.92   

90 Evaluation of introduction of Jobcentre Plus in  Riley et al (2011).   Effects of 'Harz reforms' on speed of job finding in 

Klinger and Rothe (2012) and on occupational matches in Fahr and Sunde (2009). 

91 Benefit savings amounted to around 115 million €. Together with savings from reduced ALMP-utilization and revenues 
from taxes and  social security contributions gains of about 182.5 million € were achieved. Thus, net gains amounted to 
almost 150 million € in almost two years. This is equivalent to a net payoff per head of around 1,970 €. ICON 2015, Fertig 
(2014)  A  previous  pilot  project  in  14  local  employment  offices  in  Germany  has  shown  that  a  better  workload  (1:70 
unemployed per caseworker) reduced the average duration of the UE spell by 10 days (Hainmueller et al. 2009). 

32 

 
 
 
 
 
 
 
 
                                                            
Better 
benefit conditionality 

enforcement 

of 

A pilot from NL shows that intensified contacts focusing on rights and duties 
lead to higher job search intensity93.  

Data protection, unclear division of tasks and lack of performance indicators 
risk hampering exchanges of information94. 

6.3. 

Increased effectiveness of interventions: individualised support (specific 
objective 3) 

Three  mechanisms  ensure  a  stronger  individualised  support:  1)  A  minimal  standard  of  service 
ensuring  that  administrative  processes  achieve  tailored  support,  matching  the  needs  and  goals  of 
jobseeker,  while  allowing  case  handler  discretion  and  choice;  2)  Re-orienting  ALMPs  towards 
employability  support  (up-skilling/basic  skills/start-up  support);    3)  Re-assessment  of  the  needs  and 
employment prospects of the LTU. 

Impact will be higher on MS without individual approaches in place: 

No or limited impact 
DE, UK, DK, EE, SE, FI, BG, FR, IE, 
LT, UK 

Base on tables 4 and 5 above. 

Table 9. Individualised support 

Medium impact 
BE, AT, PL, LT, SI, SK, MT, NL, LU 

Stronger impact 
CY,  CZ,  EL,  ES,  HR,  HU,  IT,  LU, 
PL, RO, SK 

Mechanism 
JIAs as individualised, 
tailored document for 
LTU 

Impacts on individualised support and transitions to employment 
JIAs  guarantee  a  minimal  standard  of  service  individualisation  for  LTU  and  thus 
provide  a  quality  standard  for  interventions.  Delivery  in  a  single  point  of  contact 
allows  dealing  with 
to  employability  which  are 
accumulating during unemployment, with indirect impact on ALMP effectiveness95.  

the  underlying  barriers 

Re-assessment of long-
term unemployed 

Establishment  of  a  single  point  of  contact  can  facilitate  further  relaying  with  life-
long learning providers for up-skilling, as shown in the UK96.  
An  improved up-skilling  offer  can  link  individual  re-assessment,  referrals through 
the single point of contact and employer services, as shown in IE97.  

Linking  the  content  of  the  training/up-skilling  offer  to  specific  job  requirements 
increases its effectiveness98. 

Evidence  from  DE,  NL,  SE,  PT  and  DK  shows  that  lower  caseloads  and  higher 
“contact  intensity”  have  a  positive  impact.  A  model  combining  intensive  support, 
caseworker  discretion  and  monitoring  of  outcomes  has  a  positive  impact  on  both 

92  The  Estonian  reform  of  2009,  which  merged  the  Labour  Market  Board  with  the  Unemployed  Insurance  Fund,  lead  to 

better enforcement of conditionality and to more effective activation of jobseekers. Scharle (2015). 

93 Randomised control group evaluation of ACE (Activation and Control leads to Effect) pilot, UWV Werkbedrijf, NL. 
94 Scharle (2015). 
95 A UK support "trailblazer" scheme for the very long term unemployed reported lower levels of assistance payments after 

six months of starting the programme compared to a control group of clients not included in the scheme.   

96 In the UK, the District Provision Tool (DPT) provides access to the full range of provision and support for up-skilling for 

the Jobcentre Plus clients, also facilitating post-recruitment workplace training.  

97 In IE, alongside the  Intreo single points of contact, the 2012  Pathways to Work governmental strategy established new 
programmes for re-skilling targeted at LTU – the Momentum and Springboard programmes, which are tailored to labour 
market needs as registered through data gathered in the single point of contact and through provision of employer services. 
98 McGuinness et al (2014) find that training focused on job search techniques and medium to high level skills courses in IE 
leads to more sustainable re-employment. Carling and Richardson (2004) find that employer subsidies and employer-lead 
training outperform classroom training in effectiveness.  

33 

 
 
 
 
 
 
 
 
 
 
 
 
                                                                                                                                                                                         
placement rates and on matching, lowering skills mismatches and increasing quality 
jobs for the long-term unemployed99.  

Re-orient ALMPs 
towards employability 
support 

An explicit contractual approach commits case handlers to choices. By opening up 
access to the whole range of ALMPs and services, it allows a genuine effort to fit 
the participant's needs to the activation offer. 

Increased caseworker 
discretion 

The German MoZaRT pilots showed that when offered with higher  discretion and 
lowered caseload, counsellors became more proactive imposing more sanctions on 
clients with low search efforts and registered more new vacancies. 

Similar results were obtained in the NL for the ProPOM trial. 

6.4. 

Increased effectiveness of interventions: employer support (specific objective 3) 

Contact to employers impacts transitions to work. Among employers who did recruit from the LTU in 
the five countries covered by the IPPR survey, 56% recalled contacts with the PES, compared to 21% 
who did not recruit from the LTU100.  

Two mechanisms ensure stronger employment support: (1) enhancing services to employers and (2) 
focusing  ALMPs  on  the  competitive  labour  market,  reducing  to  a  minimum  public  works.  There  is 
consistent  evidence  on  the  lack  of  effectiveness  of  public  works  on  promoting  transitions  to 
employment101.  

Impact is expected to be higher for countries with large public work schemes: 

Over 15% of all ALMP in public works (2012 data) 
SI, SK, LT, PT, BG, IE, HU 

Over 40% of LTU schemes / public works (2012 data) 
DE, FR, HR, CZ, LV 

Source: Own estimates, based on LMP Database, 2012. 

99  Increasing  the  frequency  of  client  contacts,  as  well  as  an  earlier  start  of  mandatory  full-time  programme  participation 
reduced    unemployment  duration  by  3  weeks  in  DK  (Rosholm  2008).  In  the  NL  experiments  focused  on  a  broad  client 
group  including  LTU,  involving  a  population  of  631,104  individuals  reported  a  cost  benefit  ratio  of  1:6  for  early 
intervention advisor interviews with LTU, 1:10 for competence tests, and 1:12 for workshops for older jobseekers.  Similar 
positive  returns  on  programmes  of  intensive,  twice  weekly,  interviews  with  LTU  clients,  mentoring  schemes  for  young 
LTU clients were found in DK. 

100  IPPR  (2015)  -  European  employers'  perspectives  on  long-term  unemployment,  recruitment  and  public  employment 

services 

101 In a review of 137 ALMP programmes in 19 European countries,  Kluve 2010 finds the lowest effectiveness for public 
work creation programmes. In DE the so-called “1€-Jobs” have been a widely used ALMP-measure, with average stock of 
participants amounting to more than 300,000 individuals between 2006 and 2010. Several evaluations find a non-positive 
causal  effect  of  participation  in  such  jobs  on  employment  prospects  in  the  non-subsidised  employment  and  on  leaving 
benefits.    This  is  corroborated  by  evidence  on  large  lock-in  negative  effects  in  HU  especially  for  the  low-skilled. 
Hohmeyer and Wolff (2012), Koch and Fertig (2012). 

34 

 
 
 
 
 
 
                                                            
Table 10. Employer involvement 

Mechanism 
Increasing partnerships 
with employers on LTU re-
integration 

Invite MS to shift 
resources from public 
works or other public job 
creation schemes towards 
strengthened employer 
services/ start-up support. 

Impacts on employer involvment and transitions to employment 
Evidence  from  effects  of  mutual  learning  within  the  European  Network  of  PES 
show slow positive impact on reinforced PES employer services. 

In  FR  for  instance  the  action  plan  for  fighting  LTU  includes  adjustments  in  the 
"insertion contracts", increasing their attractiveness to employers102.  

Particularly  in  countries  with  high  share  of  public  works,  re-allocation  towards 
employer incentives can lead to significant efficiency gains for LTU.103  

A  number  of  studies  find  mixed  results  for  employment  incentives  not 
accompanied  by  additional  services  towards  employers  or  towards  placement 
beneficiaries104. 

Under JIAs services to the 
LTU and to employers 
could be organised back-
to-back. 

Personalised interventions with employer involvement increase transitions to 
work for unemployed with longer duration, as shown by evidence from AT105 and 
SE106.  

Sustainable re-employment is enhanced when employer incentives are based on 
an individual referral system allowing better targeting and mutual 
responsibilities.107 

A German scheme for jobseekers aged over 50 that included counselling and 
training, based on close cooperation between local public authorities, service 
providers and employers also registered positive re-employment effects. The SE 
and AT schemes quoted above also show more positive effects for older workers. 

7.  EXPECTED IMPACTS AND COSTS 

7.1.  Expected impact on transitions to employment 

Transition  rates  depend  not  only  on  the  factors  tackled  by  the  initiative,  but  also  on  a  range  of 
exogenous factors including the broader macroeconomic environment, the degree of flexibility of the 

102 National action plan for addressing LTU. 
103 The New Start Jobs programme in SE showed significant effects, particularly when subsidies are longer (matching the 
unemployment duration) and cover higher share of wage costs. The duration of the subsidy was equal to the months spend 
in unemployment, but with a maximum of two years (and an effective minimum of 12 months). Similar positive results 
were observed in a BG scheme (Mihaylov (2011)). 

104 A large scale employer subsidy scheme in DE tailored to an estimated productivity gap of each beneficiary but without a 
personalised  counselling/  employer  service  element  had  negative  results  on  transitions  to  work,  estimated  at  12000 
Euro/participant (ICON 2015). Experience in DK with employer subsidies was more positive, and they have proven more 
effective than training programmes.  

105 The AT integration subsidy offers a wage subsidy covering up to 66.7% of the total wage cost and a lump sum of 50% for 
non-wage  labour  costs  for  a  maximum  of  2  years,  targeting    LTU  and  older  workers.  Seven  years  after  entering  the 
programme,  non-subsidised  employment  for  the   beneficiaries  was  increased  between  330  and  454  days  (33.3%  -  52%) 
depending on sex and age group. Even with substantial deadweight losses (around 60%) the authors estimate that the wage 
subsidy led to a net benefit of 1,800 € for women and 1,360 € for men over a five-year period for prime-age LTU. Eppel 
and Mahringer (2013). 

106  The  Swedish  Job  Net  2  programme,  co-financed  by  the  ESF  organised  a  work  trial  to  very  long-term  unemployed 
supported by continued coaching from the PES. The follow-up was very intense, with a caseload of 10-20 jobseekers per 
counsellor and a requirement to allocate at least 50% of the time for counselling towards employers. The intervention lead 
to  shortening  by  6%  of  the  duration  of  unemployment  on  the  open  market  or  by  15%  when  including  subsidised 
employment. It was later mainstreamed to all long-term unemployed. Liljeberg and Lundin (2010). 

107 Kluve 2010. Wolff and Stephan (2013). 

35 

 
 
 
 
 
 
 
 
 
                                                            
labour markets, the level and relevance of skills in the workforce. All these factors are highly country 
specific and therefore are not taken into account in the estimates presented below. 

JIAs offer a framework for upward convergence of support to the long-term unemployed in the MS. 
The  possible  convergence  effect  of  the  initiative  can  be  presented  under  two  scenarios:  (1)  the  gap 
between the current transition rates and the top 3 MS in transition rates (DK, EE, SI) is closed by half;  
and (2) the gap to 3 countries with support very similar to the proposed JIAs (DK, DE, NL) is closed 
by half.108 The scenarios do not control for other intervening factors (increased labour demand, labour 
market  flexibility,  etc.)  and  are  not  based  on  a  modelling  of  impact  in  the  MS.  They  illustrate 
numerically the potential gains from a process of convergence in the quality of support109.  

Table 11. Estimated additional LTU transitions to employment 

Estimated additional LTU transitions to employment 

(1) Half-closing gap to top 3 performers 
(2) Half-closing gap to top MS with JIA  

380.000 
254.000 

Numerical annual estimates based on the assumption that the gap between the current transition rates and the top 3 MS in 
transition rates (DK, EE, SI) is closed by half  (scenario 1 in first row) or that the gap to MS with support systems similar to 
that proposed by the recommendation (scenario 2 in second row). 

Own estimates, based on Eurostat transition experimental transition data and LMP Database110  

Based  on  the  more  conservative  scenario  (2)  above,  the  potential  annual  gains  in  transitions  to 
employment  are  illustrated  below  for  the  MS  most  concerned  for  which  both  transition  data  and 
ALMP data are available.  

Table 12. Estimated additional LTU transitions to employment, by country 

BG 

CZ 

EL 

ES 

FI 

FR 

HR 

IT 

LT 

PL 

PT 

RO 

SK 

5200 

2100 

37200  100500 

1100 

19000  10500  37000 

2900 

14500 

6700 

2900 

12700 

Numerical annual estimates based on the assumption that the gap between the current transition rates is half closed relative 
to MS with support systems similar to that proposed by the recommendation.  

Own estimates, based on Eurostat transition experimental transition data (2013/14)111. 

While transition rates vary also due to specific labour market conditions, a better focus of integration 
policies  would  have  impact  independent  from  the  macroeconomic  situation  and  labour  market 
structures.  

Figure  12  presents  both  the  positive  impact  of  the  good  structured  support  on  the  transitions  to 
employment, as well as the impact of reforms on increasing transitions. Countries which have already 
increased  individualisation  of  service  work  systematically  with  IAPs  and  have  ensured  data  sharing 
for  service  coordination,  thus  offering  more  structured  support  to  LTU  achieve  higher  rates  of 

108  The  scenarios  do  not  control  for  other  factors  or  modelling  the  impacts.  For  all  scenarios,  only  registered  LTU  are 
considered,  lowering  estimates,  which  can  be  considered  a  minimal  threshold.  The  second  scenario  underestimates 
impacts,  as  the  benchmark  are  transition  rates  in  countries  where  arrangements  similar  to  the  JIAs  already  achieved  a 
strong reduction in LTU and the remaining LTU are very remote from the labour market.  

109 Closing by half the gap to top performers is realistic. We assume an increase in transition rates of 2-3 % in HU, CY, CZ 
up to an increase of 11% in EL or SK. Increases witnessed in countries which reinforced their support system in recent 
years were in the range of 10% increase (Figure 12). 

110 No effects are assumed for DE, DK, NL, who already have provision similar to JIAs, while data is missing for  BE, IE, 

LU, MT, UK, which are therefore not included in the scenario. 

111 Estimated by multiplying the increase in transition rates with the target population. 

36 

 
 
 
 
                                                            
transitions  to  employment  (e.g.  DK,  EE,  SE,  CZ,  FI,  DE  IE  in  Figure  12)112.  Moreover,  countries 
which  reinforced  support  structures  show  considerably  higher  transition  rates  following  reforms,  as 
illustrated  by  CZ,  EE  and  IE113.  This  suggests  the  potential  for  improvement,  although  the  figure 
below should be interpreted with care, as other factors such as macroeconomic trends or wider labour 
market reforms may affect performance.  

Figure 12. Support to LTU and transitions to employment 

4
1
-
3
1
0
2
l
p
m
e
o
t

s
t
n
o
i
t
i
s
n
a
r
t

U
T
L

45

35

25

15

5

PL 

ES 
RO 
SK 
EL 

EE 08-09 

CZ 08-09 
IT 
IE 08-09 

DK 

SE 

FI 
DE 

EE 

CZ 

IE 

Weakly structured support 

Strongly structured support 

Gaps in profiling, IAPs, one-stop-shop 
provision and data exchange 

Profiling, IAPs to all, single point of 
contact or data exchange. 

Source: Eurostat, EU-LFS, experimental ad-hoc transitions calculations. For CZ, EE and IE, data for both 2008/09 and 
2013/14. 

In light of the figure above, the scenarios presented at the beginning of this section appear realistic. 
This is also in line with research outcomes on support for highly disadvantaged groups of unemployed 
where  it  is  not  unusual  to  find  that  the  most  successful  programmes  increase  by  10%  their 
employment rates114. 

112 In Figure 12, MS with weakly structured support do not profile, do not offer IAPs to all, lack one-stop-shop provision or 
extensive data exchange; the converse applies to MS with strongly structured support. The correlation between the strength 
of the support and transition rates to employment is corroborated by the strong correlation between LTU transition rates 
and  ALMP  spending,  unemployed  participation  in  life-long  learning  and  ALMP  coverage  (Annex  2  Figs  11-13).  Other 
factors which  might  influence  transitions  to  employment  such as  job  creation  rates,  labour  market  rigidities  or  levels  of 
unemployment  are  not  controlled  for.  However,  both  sides  of  the  figure  include  countries with high  (UK,  RO)  and  low 
GDP growth (FI, EL); high (DK, SE, ES) and low (DE, UK) ALMP expenditure; high (IE, SK) and low (PL, SE) LTU 
rates in 2013. See also EC (2014a) - Economic and Social Developments in Europe 

113 EE reformed in 2009-2011. IE started introducing in 2012 the INTREO centres creating a one-stop-shop for employment 
services  and  benefits.  CZ  introduced  in  2010  a  similar  reform,  integrating  employment  and  social  assistance  in  a  single 
organisation. They are the only countries which implemented large changes  during the last 6 years and all succeeded in 
breaking the EU trend of decreasing transition rates. 

114 OECD Employment Outlook 2005, p. 224 

37 

 
 
 
 
 
 
                                                            
 
 
 
 
 
 
 
7.2.  Expected impact on poverty and social inclusion 

Long-term unemployment is one of the most significant determinants of poverty. Half of those who 
take a job also escape the risk of poverty, with a share varying from 20% in BG and RO to 65% in PT 
or SE115.  

Chances to exit poverty are linked to the chances of successful transitions to employment. Figure 13 
shows  that  on  average  half  of  those  taking  up  a  job  exit  from  poverty.  Transitions  out  of  poverty 
depend amongst others on the type of contracts (permanent/ temporary, part time/full time), on wage 
levels and on the availability of in-work benefits116.   

Figure 13: Transitions to employment and exits from poverty  

k
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r

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a
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9
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8
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100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Stay into
poverty

Exit out
of
poverty

RO BG ES EL FI SI UK AT BE IT LV HU CZ PL FR EE LU LT PT SE

EU

Source:  EMPL  calculations  based  on  Eurostat,  EU-SILC  2010  longitudinal  data;  data  for  DE  and  IE 
missing. (ESDE 2013). 

While the initiative would not target specific groups (such as persons with disabilities or partial work 
impairments, persons from migrant background, Roma, single mothers), strengthening individualised 
approach  leads  to  more  targeted  solutions  and  improved  ascertaining  of  support  for  return  to 
employment.  Support  would  be  embedded  in  a  simpler  institutional  environment  improving  the 
identification  of  specific  barriers  to  labour  market  inclusion  and  providing  a  gateway  for  access  to 
supporting social services, often needed to address multiple disadvantages. Given that the initiative is 
living flexibility to MS and focusing to the support infrastructure, the risk of diverting support away 
from groups more remote to the labour market emphasised in the consultation by the Social Protection 
Committee, is minimised. 

The  impact  on  the  overall  level  of  social  protection  would  be  positive.  Increased  transition  rates 
would  relieve  pressure  on  the  social  benefits  budgets117,  but  on  the  other  hand  more  integrated 
provision  can  increase  the  number  of  claimants  registering  with  the  integrated  services.  Simplified 

115 ESDE 2013,  
116 bid 
117 SPC Committee (2015) - Social Europe - Aiming for inclusive growth. 

38 

 
 
 
 
 
                                                            
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
service delivery leads to higher registration not only with employment services, but also with social 
authorities118.  

Successful transitions to employment  will  mitigate  the negative  social consequences of LTU: lower 
educational  achievement  both  for  workers  and  for  their  children,  family  instability,  deterioration  of 
mental health, increased mortality and lower access to healthcare119. At societal level, LTU is closely 
correlated  with  increased  inequalities,  poverty  rates  and  social  exclusion,  decreased  trust  in  public 
policy and social cohesion120.  

7.3.  Overall economic impacts  

The  initiative  is  likely  to  have  a  positive  impact  on  EU  competitiveness.  Decreasing  LTU  would 
increase  disposable  income,  increase  aggregate  demand  and  lower  fiscal  imbalances.  The  overall 
budgetary impact of the initiative can be expected to be positive by reducing benefit recipiency and 
increase of tax receipts, provided that other structural reforms are implemented to boost job creation. 
Offering  more  individualised  support  would  improve  the  human  resources  matching  of  labour  to 
productive opportunities.  

Ensuring  more  transitions  to  employment  and  bringing  the  LTU  closer  to  the  labour  market  would 
facilitate labour market transitions and re-allocation of labour across sectors, contributing to a more 
flexible labour market.  

Addressing LTU would also increase the contribution of labour to growth – which has been rather low 
during the last 6 years - and alleviate some of the demographic pressure currently building up121.  

An indirect effect of the JIAs is the opening of employment services market to a plurality of delivery 
agents. By creating or further reinforcing the individual referral system, they lay the groundwork for 
performance  based  outsourcing  of  employment  services122.  Research  results  show  that  past 
introduction of single points of contact led to an increase in private employment service provision.123  

By emphasising simplified support, enhanced services and partnerships with employers, the initiative 
will impact positively on the business sector. Advocating a shift away from public works will help re-
focus ALMP resources towards the competitive labour market and the needs of private employers.  

In a setting of low labour demand and limited fiscal space, employment incentives can be attractive 
instruments for supporting employment while also improving the employability of specific vulnerable 
groups.  However,  if  not  well  designed,  employment  incentives  may  result  in  wasteful  spending  of 
public  money,  particularly  if  the  subsidised  jobs  would  have  been  created/maintained  anyway 
(deadweight loss), or if the subsidies simply induce employers to hire/keep certain workers instead of 
others  (displacement  effects).  They  may  also  reduce  productivity  to  the  extent  that  they  create 

118 Scharle (2015);  Mploy (2011). 
119 General social impacts of LTU are discussed in Nichols et al (2013), Addabbo et al (2011). Involuntary joblessness can be 
detrimental to mental health e.g. via feelings of helplessness brought on by a perceived lack of control or failure to obtain 
recognition, social connections and nonmonetary benefits of work. Paul and Moser (2009);  Herbig et al (2013). 

120 SPC Committee (2015)) Unemployment has been constantly identified as one of the top two issues of public concern at 
both national and European level during the last years. (Standard Eurobarometer issues 2012-2014); On impacts on trust 
and social cohesion, see Martin (2014) and Easterly et al (2006). 

121  Kroft,  K  et  al  (2014);  Krueger  et  al  (2014);  EC  (2014)  -  ECFIN’s  medium  term  projections:  the  risk  of  ‘secular 

stagnation’; EC (2014) - Economic and Social Developments in Europe. 

122  PARES  dialogues  between  private  and  public  employment  services  reached  the  consensus  view  that  individualised 
service based on profiling and diagnostic assessments, data pooling and a coordinated offer are key enablers for the private 
actors entry of on the market for integration services, particularly for LTU; EC(2014f) - Delivering a coordinated service 
offer. See also Fuertes et al (2014) FP7 Project LOCALISE and Zimmermann et al (2014) FP7 Project LOCALISE. 

123 Van Berg et al (2012); Minas (2014) Report of FP7 project INSPIRES. 

39 

 
 
                                                            
incentives for companies to substitute more productive workers with less productive ones. If jobs are 
created only for the duration of the subsidy, this still improves employability of the involved workers, 
but the net social benefit is much more limited, or even negative124. 

For  these  reasons,  the  foreseen  initiative  emphasises  more  employer  services  (e.g.  pre-recruitment 
selection of candidates, pre- or post-recruitment workplace training, post-placement counselling and 
mentoring) rather than financial incentives for employers. While such services can still carry risks of 
deadweight loss, they are less likely to produce distortions on the labour market. 

Reinforced  and  personalised  employer  support  is  also  likely  to  be  more  relevant  for  the  small  and 
medium enterprises (SMEs). Particularly small enterprises without HR departments can be expected 
to  benefit  more  from  employer  services  and  direct  contact  with  employer  counsellors.  Currently, 
.medium and large enterprises (100-1000 employees) were found to have more contact with the PES 
than small or very large ones125.  

7.4. 

Implementation costs 

MS need to continue to finance the IT infrastructure for benefit and ALMP eligibility and monitoring, 
and  the  administrative  routines  for  handling  services,  monitoring  and  sanctions.  Current  costs  for 
delivery  of  LTU  support  within  the  PES,  social  services  or  by  outsourced  provision  are  not 
available126.  The  costs  for  LTU  ALMPs  average  at  8.900  Euro/participant-year,  varying  from  over 
1000 € in RO, SK to over 16.000 € in SE, NL, DK. Such costs of basic service provision are likely to 
continue to vary strongly across Member States, with more investment needs in countries with lower 
administrative capacity. 

The  initial  costs  for  establishing  the  JIA  infrastructure  are  the  costs  related  to  the  organisational 
changes  to  achieve  better  coordination  in  order  to  offer  an  integration  agreement  through  a  single 
point  of  contact.  They  relate  to  IT,  new  administrative  protocols,  equipping  or  co-locating  one-stop 
shops and staff training and are dependent on the extent of prior collaboration between the agencies in 
charge,  which  varies  as  shown  in  section  3.4  above127.  Available  evidence  suggests  that  the  initial 
additional financing does not vary strongly with the level of capacity of national administrations. In 
Germany it amounted to 175 € per household in 2005, in Hungary to 300 € per person and for the case 
of  Jobcentre  Plus  in  the  UK  the  roll-out  costs  were  around  275  €  per  benefit  recipient  in  2008 
(excluding infrastructure investment costs which were around the same amount). The running costs of 
offering  the  JIA  offers  are  however  more  dependent  on  the  administrative  capacity  of  the 
administrations in charge. 

The ICON study shows that running costs per participant vary considerably and are lower in countries 
with lower capacity128. They are mainly related to staff re-assignment to ensure lower caseloads, while 
the  ensuing  administrative  procedures  of  provision  of  job  offers,  referral  to  ALMP  measures  or 

124 http://ec.europa.eu/europe2020/pdf/themes/2015/employment_incentives.pdf 
125  IPPR  (2015)  -  European  employers'  perspectives  on  long-term  unemployment,  recruitment  and  public  employment 

services. 

126  HU  is  currently  introducing  client  profiling,  segmentation  and  IAPs.  The  costs  for  the  introduction  of  the  reinforced 
support are estimated at a one-off investment 9.4 million Euro, which are already financed under the ESF. The entire IT 
infrastructure of the PES is currently restructured in RO, including e-services for setting up IAPs and linking the PES 
registry to social benefits, the tax and population registry at a cost of 5 million €, financed by the ESF.  

127  Estimates  in  this  section  are  based  on  ICON  (2015)  study;  estimates  on  costs  of  ALMPs  for  LTU  are  based  on  own 

calculations in the LMP database, shown in Table 7 of Annex 2 (2012 data). 

128 ICON (2015). 

40 

 
 
                                                            
monitoring entail only small additional costs, as in many cases they only need to be adapted based on 
current practice and integrated in the JIAs. 

For both initial and running costs, there are strong counter-financing effects through better integration 
rates into the labour market (shorter unemployment duration) and savings on benefits through better 
monitoring under JIAs129. The single point  of contact leads to savings through joint direct customer 
contact in employment and social services. 

Based  on  the  ICON  study,  estimated  additional  costs  are  presented  in  more  detail  for  5  MS  which 
differ  in  the  extent  of  service  provision  to  LTU,  in  resources  and  administrative  capacity  and  in 
institutional setting (Table 13)130. The estimated costs are already incurred in Germany and Denmark, 
who  would  not  need  additional  initial  investment  to  fulfil  the  requirements  of  the  recommendation. 
The  running  costs  are  built  on  a  scenario  assuming  an  individual  qualified  contact  person  for  each 
beneficiary, the assessment of employment potential, the agreement of a JIA opening access to the full 
spectrum  of  ALMP  measures/  provision  of  job  offers  and  regular  follow-up  assuming  a  contact 
intensity  of  3-6  months  and  caseloads  between  1:150-1:250.  They  can  be  considered  a  minimum 
package of individualised support. 

In addition, the table estimates in the last row the additional costs of intensified intervention should 
Member States opt for an ambitious implementation of the recommendation, by considerably reducing 
caseloads  for  counselling  the  long  term  unemployed  to  1:70-1:100.  Such  option  would  have  the 
consequence of increasing  the staffing of the implementing agencies.  

Table 13: Estimated additional costs in five EU MS 

Initial financing 

Germany 
175 € per 
household 
(2005) 

Denmark 
- 

Hungary 
300 € per person  

Italy 
- 

Lithuania 
- 

1,380 € 

522 € - 2,065 €** 

Running costs per capita 
per year* 
Intensified intervention 
per capita per year*** 
* UB2-benefit recipient in Germany, LTU in Lithuania and registered unemployed in all other countries ** Depending on 
the data source used for calculating costs *** Additional costs for intensified (70 LTU jobseekers/caseworker vs. 250 LTU 
jobseekers/caseworker in the row above on direct costs). Source: ICON (2015). 

156 € 

175 € 

163 € 

300 € 

100 € 

- 

- 

- 

While the table above shows estimates of both initial and direct costs per capita of provision of JIAs, 
the estimates should be interpreted with caution. 

The recommendation asks MS to put in place Job integration agreements which should fulfil certain 
standards, but does not prompt MS to provide a certain type of offer (e.g. counselling, training, work 
placement, referral to other services). The  re-allocation of resources from public works could create 
additional  budgetary  space  which  could  be  used  in  interventions  targeting  employers  on  the 
competitive labour market. The cost of implementation in terms of expenditure on ALMP measures is 

129 In DE, 3% of LTU experienced a benefit cut of  20-25% per year leading to benefit savings of around 200 million € per 

year (20% of the costs of running a system of individualised integrated support) – ICON 2015. 

130 Table 13 extrapolates experience from countries applying interventions foreseen and applies it to the 5 MS situations, on 
the  basis  of a  detailed  baseline case  studies presented in  ICON  (2015).  The  five  countries  are chosen  so as  to present 
representatively the situation across the EU 28: MS with strong (DE, DK) and weak (HU, IT) employment services, with 
high  (DK,  IT)  and  low  (DE,  LT)  spending  on  ALMPs,  with  municipal  (DK),  regional  (IT),  centralised  (LT,  HU)  or 
mixed (DE) level of decentralisation. 

41 

 
 
  
                                                            
therefore  not  included  in  the  cost  estimates  in  Table  13  above.  The  costs  of  additional  counselling, 
translating into more intense intervention, are presented in the last row. This is fully in line with the 
objective  of  increasing  the  individualisation  and  effectiveness  of  support,  which  means  that  support 
should be adapted to the needs of beneficiaries and not pre-determined through administrative rules or 
targets. The estimates of running costs of provision should therefore be taken with caution, as they are 
subject to subsequent choices at MS level on the implementation tools.  

In  light  of  the  flexibility  given  to  MS  on  the  type  of  offers,  a  price  estimate  with  regard  to  their 
content  is  not  appropriate.  It  can  be  generally  assumed  that  many  of  the  offers  included  in  Job 
integration  agreements  would  be  focused  on  employment  services,  rather  than  placement  in  ALMP 
measures (such as training, employment incentives, etc.). The data in LMP database shows that there 
is very wide variation in the cost of such services (whether provided internally in the PES or by other 
providers).  Costs  per  capita  average  for  instance  between  31  and  1183  Euro/  participant  in  SI,  or 
between  31  and  2655  Euro/participant  in  DE,  depending  on  the  complexity  and  intensity  of 
interventions.  Similarly,  the  average  expenditure  ranges  from  below  150  euro  in  PL  or  HR  to  over 
1000 Euro in BE or DE. The optimal choice of offer should be therefore chosen by the implementing 
organisations in the MS, given individual circumstances and conditions on local and regional labour 
markets and cannot be adequately priced at EU level.  

Overall,  implementation  would  entail  additional  costs  related  mainly  to  the  initial  set  up  of 
coordinated provision of support offers through JIA and the single point of contact. The running costs 
of provision, including both the initial assessment and the follow-up of JIA recipients, as well as the 
costs of offers (whether taking the form  of employment services or placement on ALMP measures) 
can  be  expected  to  be  covered  mainly  through  re-allocations  from  existing  expenditure  on  labour 
market  policies  and  a  stronger  prioritisation  of  the  LTU  in  the  service  offer.    A  precise  estimate  of 
these  running  costs  is  difficult  given  the  high  variation  in  the  costs  of  such  offers  across  MS  and 
because  of  numerous  offsets  and  possibilities  to  re-allocate  within  existing  budgets.  It  is  fair  to 
assume  that  the  initial  investment  would  translate  into  gains  ensuing  from  reduction  of  long-term 
unemployment at a later stage, as discussed in section 7.5 below. 

7.4.1.  The role of the European Structural and Investment Funds 

Part of the costs associated with implementing the foreseen changes could be mitigated by directing 
existing ESF budgets towards the actions envisaged in the initiative. According to the ESF Committee 
opinion,  substantial  amounts  of  the  ESF  are  available  for  putting  in  place  integrated  LTU  support 
structures and for the groups furthest away from the labour market131.  

All MS are in a position to act. MS with more limited fiscal space and in need of deleveraging can 
make best use of ESF allocations. ESF funding dedicated to improving the capacity of labour market 
institutions is already budgeted in the Operational Programmes in BG, CY, CZ, DK, ES, FR, EL, HR, 
IT,  PL,  PT,  RO,  SK,  covering  all  countries  which  received  CSRs  on  employment  service  capacity 
during the last three years. 

JIA will impact differently provision of support in the MS. While countries which already have strong 
support systems in place will need to invest less to deliver JIAs, countries which are more exposed to 
LTU and also have a weaker fiscal position will need to invest more. However, the ESF allocations 
already follow the strength of the support system, as shown in the table below. 

131 This view is supported in the employer's contribution. 

42 

 
 
 
                                                            
Table 14: ESF allocations by expected impact on administrative costs 

Allocations  for  labour  market 
capacity building 

ESF allocations  

High impact of the CR 

Low impact of the CR 

BG, CY, CZ, EL, ES, HU, HR, 
IT, PL, PT, RO, SK 

DK, FR 

No ESF allocations 

LU, LV, SI 

AT,  BE,  DE,  EE,  FI,  IE,  LT, 
MT, NL, SE, UK 

The one-off administrative costs of full implementation of initiative132 in one year would amount to 
11% of average ESF annual allocation under the three relevant thematic investment priorities (8i, 8vii, 
9i) in HU, 17% in PL, 27% in LT, 28% in IT, respectively 43% in FR133. The initial costs are likely to 
be much lower in all MS.  

In addition to the ESF measures, MS may also make use of ERDF under their existing allocations for 
the relevant thematic investment priorities to support the implementation of the initiative, namely by 
supporting job creation, and modernisation of public employment services and vocational education.  

7.4.2.  Monitoring costs 

No  additional  reporting  envisaged  either  for  businesses  (including  private  employment  service 
providers) or the voluntary sector.  

For  the  public  administration,  the  introduction  and  the  implementation  of  JIAs  involve  substantive 
costs affecting  the essence of their  activity, and  they were analysed in the section above. While the 
initiative  imposes  administrative  costs  primarily  on  public  administration,  it  will  impose  a  very 
limited additional administrative burden related to reporting costs.  

The  additional  administrative  burden  for  public  administration  would  relate  to  the  monitoring  and 
evaluation of the initiative.134 Existing reporting and monitoring mechanisms will be privileged. 

National  monitoring  of  the  implementation  of  JIAs  would  become  an  integral  part  of  the  existing 
mechanisms  for  ALMPs,  employment  agencies  and  social  authorities.  EU  level  monitoring  would 
partly use existing EMCO indicators and the existing LMP database.  

7.5.  Budgetary impact 

The medium-term budgetary impact could be limited or positive provided that other structural reforms 
are  implemented,  as  the  costs  for  running  JIAs  could  be  outweighed  by  increased  tax  receipts  and 
benefit  savings.  Most  of  the  estimated  initial  costs  for  setting  up  the  JIA  infrastructure  would  be 
recovered  in  one  year  through  increased  transitions  to  employment,  assuming  that  these  occur  in  a 
recovering  labour  market  characterised  by  net  job  creation.  There  is  scope  to  use  the  ESIF,  in 

132 The estimate assumes maximal additional costs for initial investment and service provision (300 € additional investment/ 
beneficiary – amounting to a one-off doubling of administrative costs of current provision for all unemployed with no 
counter-financing effects. 

133 Back-of-the envelope estimate by dividing  the average yearly allocation for ESF priorities 8i, 8vii and 9i in each country 
to  the stock of registered LTU over 18 months and older than 30 in each country and to the higher cost limit of 300€.  
134  Relative  to  the  Youth  Guarantee,  the  burden  for  MS  would  be  much  reduced.  Three  main  cost  elements  would  be 
avoided:  no  monitoring  outreach  to  non-registered  beneficiaries  is  foreseen;  no  quantification  of  the  type  of  offers 
received; no requirement of distinguishing transitions to employment before/ during/ after the offer provision.  

43 

 
 
 
 
                                                            
particular  the  ESF  and  the  ERDF  2014-2020  allocations  for  supporting  the  implementation  of  the 
initiative. 

To  assess  the  gains  of  the  initiative,  estimates  have  been  adjusted  from  increased  exits  from 
unemployment in terms of savings on benefits and additional tax receipts, assuming a return to work 
with  a  75%  of  average  wage135.  For  each  LTU  finding  a  job,  associated  gains  in  tax  receipts  and 
reduced benefit expenditure range from 440 €/year in RO to over 11.880 €/year136. 

These estimates assume that there are no substitution effects, i.e. that more transitions from long term 
unemployment to employment do not hamper the chances of the short-term unemployed to find a job. 
Evidence  on  such  substitution  effects  is  mixed  and  seems  highly  dependent  on  the  types  of  offers, 
with higher effects for demand-side offers such as employment incentives and much lower effects for 
supply-side offers such as counselling or training137. Moreover, substitution effects diminish over time 
in an expanding economy, as capital adapts to higher levels of human capital and as the lower costs of 
matching for employers translate in more hirings at the same wage level138. 

Even when strong substitution effects occur and even when the return to work is not sustainable, there 
is a net increase in human capital when the long-term unemployed are hired. Short-term unemployed 
workers have higher levels of employability and higher probabilities of re-employment. In contrast, 
for  the  long-term  unemployed  even  a  limited  period  of  work  gives  a  considerable  boost  to  their 
employability139. 

If  combined  with  other  structural  reforms  to  boost  job  creation,  the  channels  through  which  this 
recommendation can overall support the increase in employment rate are multiple (i.e. higher growth 
potential  through  lower  hysteresis  effects,  decrease  in  structural  unemployment  through  decrease  of 
the  hysteresis  effects  and  higher  job  turnover,  decrease  in  mismatch  between  labour  demand  and 
labour  supply  through  the  personalised  services  to  long  term  unemployed,  decrease  in  social 
exclusion, etc.). 

Costs and benefits presented below are based on an EU-wide average, which builds on the five case 
studies  presented  in  the  previous  section.  They  are  additional  to  the  current  costs  and  gains  from 
ALMP provision: current ALMP expenditure on LTU  can be estimated at 6.5 bn € per year (2012). 
The cost estimates are based on the assumption of an initial investment of 300 €r for all LTU targeted. 
Under  these  assumptions,  79%  the  one-off  costs  of  establishing  JIAs  and  their  infrastructure  are 
expected to be recovered in one year.  

Average  annual  benefit  savings  per  unemployed  finding  a  job  amount  to  1805€,  while  tax  receipts 
assuming low incomes amount to 1714€. While the savings on benefits are immediate with transitions 
to employment, the additional tax receipts should be interpreted with more caution, given the possible 
substitution effects of labour market interventions.  

135 The data and methodology for the estimate are described in  EC (2014) – The Cost of Poverty. The benefits for public 
budgets are  estimated  under  the assumption  that  LTU overlap  with  the  unemployed at  risk  of  poverty;  estimates  used 
EU-SILC 2010 results for unemployed 20-59 y.o.  

136 Annex 2 Table 7. 
137 Kluve (2014) – A Review of ALMP effectiveness; presentation at European Commission seminar on income support  – 
April 2014., Crepon B. et al (2013) find large substitution effects for a programme focused on employment incentives for 
hiring  youth    ;  Behaghel  et  al.  (2013)  find  such  substitution  effects  for  outsourced  placement  support  and  lower 
substitution effects when such support is provided through the PES.  

138 Greenberg et al (2010) provide a review of substitution effects in cost-benefit analysis or employment programmes. 
139 Brown et al (2011). 

44 

 
 
                                                            
The estimate relies on the anticipated additional transitions to employment presented in section 7.1. 
Such positive impacts are subject to caveats on the likelihood of MS with weaker support structures 
achieve  gains  in  transitions  to  employment  comparable  with  countries  which  benefit  both  from 
stronger support structure and better functioning of labour market and positive investment patterns.  

Table 15: Estimated budgetary impact of the initiative for the first years following the implementation of 
the initiative (million Euro) 

Initial cost  
Savings per year 
Share of initial cost recovered within one year 

 1 141 mil € 
897 mil € 
79% 

No  additional  impacts  are  envisaged  for  the  EU  budget.  Implementation  could  be  supported  by  the 
ESF  under  the  'Access  to  Employment'  and  the  'Active  Inclusion'  priorities.  Proactive  programme 
management  through  existing  mechanisms  foreseen  by  the  Common  Provisions  and  the  ESF 
Regulations (e.g. reallocating funds within a priority axis, aligning programming and project selection 
criteria) could support the efforts of MS. Additionally, the ERDF may also complement the measures 
financed by the ESF in accordance with the allocations for the relevant investment priorities for 2014-
2020  (not  subject  to  reallocation),  namely  by  supporting  job  creation,  the  modernisation  of 
employment services and vocational education. 

Further to that, any MS wishing to provide additional funding to implement a new CSR on LTU could 
address a re-programming request to the Commission. Conversely, under measures linking the ESIF 
funds to sound economic governance, the Commission may make such a request to a MS where it is 
deemed necessary to support the implementation of relevant CSRs. 

7.6.  Timely impact and implementation risks 

A  timely  impact  is  important  for  the  budgetary  impact  and  for  the  effectiveness  of  the  initiative  in 
tackling  the  current  LTU  stock.  Shorter  lead  time  to  implementation  enables  quicker  transitions  to 
employment, which pay off much more in terms of savings on benefits and in tax receipts.  

Experience of previous institutional integration measures in DE, UK, EE, AT show that setting up a 
one-stop-shop takes 1-2 years. The introduction of the German reformed support produced observable 
effects  on  transitions  to  employment  within  one  year  of  its  introduction.  Setting  up  the  lighter 
coordination mechanism (single point of contact) can be expected to take at most 1 year, depending 
on the MS' starting points. Further to the implementation lags, newly introduced JIAs would take time 
to produce effects on the possibilities of transitions from LTU to jobs. Such impacts can be quicker in 
expanding labour markets, with higher levels of job creation. The implementation of structural labour 
and product market reforms can thus support a quicker impact of the initiative. 

In cases with regionalised provision structures (e.g. BE, ES, IT, PL, FI) an additional layer of political 
arbitrage    is  needed  due  to  the  vertical  differentiation  of  the  agencies  involved,  as  they  are  placed 
under municipal, regional or national authority, with different budgetary authorities. 

Main  implementation  risks  refer  to  low  levels  of  overall  administrative  capacity  –  mainly  staff 
competence and resources for an individualised approach to jobseekers. CSRs on PES capacity were 
addressed to BE, BG, CZ, ES,  FR, IT,  PT, RO, SK during the last 3 years. 

45 

 
 
 
 
Success factors include the clarity and harmonisation of the goals across the different bodies, a clear 
division  of  responsibilities  (clear  procedural  rules),  careful  design  of  financial  and  administrative 
incentives  for  cooperation  as  well  as  the  adjustment  of  the  performance  indicators  to  avoid 
dysfunctional  competition  between  the  different  bodies.  The  reforms  should  be  supported  by 
appropriate training and capacity building of the administrations involved, especially of the front line 
staff. 

The  main  coordination  mechanism  is  data  sharing  across  organisations.  Data  protection  legislation 
might  limit  or  slow  down  the  development  of  a  system  of  coherent  case  management  and  cross-
referrals across organisations. The barriers outlined above can lead to uneven implementation of the 
initiative, with some MS registering delays in implementation.  

8.  EVALUATION AND MONITORING 

A  monitoring  framework  based  on  existing  data  collection  would  be  rolled  out  together  with  the 
initiative.  The  Commission's  proposal  invites  the  Member  States  to  adopt  within  EMCO  a  list  of 
monitoring  indicators  and  guidelines  for  national  evaluations  within  6  months  of  the  adoption, 
allowing an early start of regular data collection.  

Monitoring would  be  partly based  on  existing  indicators  in  the  Joint  Assessment  Framework  of  the 
European  Employment  Strategy  and  in  the  PES  Benchlearning  process.  Additional  data  would  be 
collected  through  the delivery organisations in line with current MS practice, on an annual  basis.  It 
would  refer  to  the  JIAs,  and  be  delivered  through  the  coordinating  organisations  (employment 
services or other responsible organisations identified by the Member States): number of agreements 
concluded, share of those linked to a service to an employer and average numbers of referrals in JIAs. 
Referral data is regularly collected where PES use IAPs. Information could be aggregated annually in 
the  existing  LMP  database  published  by  Eurostat/DG  Employment.  Data  would  be  split  by  gender, 
age and level of qualification. 

 Table 16 below details the proposed monitoring indicators and their link to the operational objectives. 
The monitoring objectives are each related to the specific objectives mentioned in section 4.1. 

46 

 
 
 
 
Table 16: Monitoring framework 

Operational 
objectives 

Increase share of 
LTU who are 
activated 

Monitoring 
indicator 

Activation rates 
of LTU 

Offer JIAs  to  LTU 
at the latest when 
reaching 18 months of 
unemployment  

Share of LTU 
with JIAs  

1
e
v
i
t
c
e
j
b
o
c
i
f
i
c
e
p
S

Explanation 

Existing data/ indicator 

 Number of LTU participating 
in employment services  
(category 1) and ALMPs  
categories 2-7) / total number 
of LTU 
Number of  registered LTU 
signing JIAs/total number of 
registered LTU over 30 

Yes: EMCO Joint 
Indicators Framework 

No: Additional indicator  

  Increase registration 

rates among LTU 

Increase referrals to 
ALMPs/ services 

2
e
v
i
t
c
e
j
b
o
c
i
f
i
c
e
p
S

Share of LTU 
who are registered  

Share of LTU who declare 
that they are registered  

Yes: LFS 

Number of 
referrals to 
ALMPs/ services 
included in JIAs  

Outcome indicator: Average 
number of referrals to 
ALMPs., employment / social 
services in JIAs 

No: reporting by 
implementing 
organisations of delivery 
of JIA 

Increase share of JIA 
recipients who 
transition to non-
subsidized 
employment 

Successful 
transitions to non-
subsidized 
employment  

Outcome indicator of JIAs: 
Number of JIA recipients in 
non-subsidized employment/ 
total number of JIA recipients 
(6 and 12 months of 
concluding JIAs) 

Quality of transitions 
to employment 
fostered by JIAs 

Successful 
transitions to 
permanent/ full-
time contracts 
following JIAs 

Number of JIA recipients in 
permanent (and/or) full-time 
employment / total number of 
JIA recipients transitioning to 
employment (6 and 12 months 
of concluding JIAs) 

Partially: Transitions to 
employment within PES 
benchlearning indicators; 
aligned to ESF 
monitoring (at 6 months 
of programme 
participation) 

Partially: Transitions to 
employment within PES 
benchlearning indicators 

Better adaptation of 
service provision to 
the beneficiary's 
profile 

Share of LTU 
reassessed before 
18 months of 
unemployment 

Number of LTU reassessed/ 
Total number of unemployed 
for 12- 18 months  

Increased services to 
private employers 

Share of ALMPs 
targeting private 
employers 

Ratio of expenditure on 
ALMPs (category 4)/ ratio 
expenditure on public works 
(category 6 ALMP measures). 

Partially: Part of LMP 
information on category 
1 measures. Existing 
indicator/ target  on IAPs  
in 11 PES  
Yes: Data available in 
LMP database 

3
e
v
i
t
c
e
j
b
o
c
i
f
i
c
e
p
S

Share of JIAs 
accompanied by 
employer support  

JIAs linked to an employer 
service/ total JIAs 

No: reporting by 
implementing 
organisations of delivery 
of JIAs 

Member  States  are  encouraged  to  carry  out  national  evaluations  of  the  implementation  of  the 
initiative.  A  common  set  of  guiding  documents  would  lead  to  national  results  to  be  reported  in  a 
harmonised  way  and  would  increase  comparability  of  results.  Such  guidelines  for  the  national 
evaluations of JIAs, to be adopted by EMCO, would include: 
  Comparing outcomes (e.g. transitions to employment) for JIA beneficiaries with a control group;  

47 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Implementation information on the design and functioning of the single point of contact; types of 

offers included in JIAs (by LMP category); 

  Information on costs of delivery and marginal costs of provision (per additional beneficiary). 

The re-assessment of the LTU would provide information on characteristics of both JIA recipients and 
non-recipients. A gradual roll-out of JIAs and discontinuities in design provide a possibility to define 
a  control  group  (e.g.  LTU  in  regions/  offices  where  JIAs  are  first  introduced;  unemployed  younger 
than  30  or  for  less  than  18  months).  Counterfactual  methods  of  evaluation  can  thus  be  used  at  no 
additional cost.  Further to that, MS could opt for rolling out JIAs through randomised assignments 
within the target group, using the PES registry.  

In  designing  their  evaluations,  MS  would  be  encouraged  to  monitor  transitions  to  employment  for 
longer periods, e.g. 2 years after JIA, e.g. by crossing the unemployment registry with fiscal data. This 
would allow an evaluation of both the impact and efficiency of JIAs. 

Based  on  national  monitoring  efforts  and  evaluations,  the  Commission  will  conduct  at  EU  level  an 
evaluation within five years of the adoption. The evaluation will provide assessment of effectiveness, 
efficiency, relevance, coherence and EU added value of the initiative. 

9.  STAKEHOLDER CONSULTATIONS AND EXPERTISE USED 

The  Commission  services  organised  also  targeted  consultations  of  stakeholders.  The  European 
Network of Public Employment Services (PES Network) provided data and adopted a report on the 
consultation. The European Social Fund Committee issued an opinion following the discussions on 
26/03.  The  Employment  Committee  (EMCO)  adopted  an  opinion  on  08/05,  following  three 
discussions  on  the  topic,  including  a  joint  EMCO-Economic  Policy  Committee  (EPC)  meeting  on 
1/04.  On  24/04,  DG  EMPL  organised  a  dedicated  consultation  workshop  with  representatives  of 
sectorial  and  cross-industry  social  partners.  The  Social  Protection  Committee  was  consulted  on 
6/05. 

9.1. 

Stakeholder consultations 

The  stakeholders  consulted  acknowledged  LTU  as  a  significant  challenge  and  welcomed  a 
Commission  initiative.  The  following  issues  were  raised  and  have  been  taken  into  account  in  the 
preparation of the initiative: 

-  The  ESF  Committee  stressed  the  importance  of  aligning  the  initiative  with  already  existing 
policy instruments and resources. Synergies with the current use of ESF in addressing long-
term unemployment have been highlighted in this report.  

-  The  PES  Network  endorsed  the  principle  of  individualised  service  provision,  of  increased 

cooperation among service providers, and spelling out mutual obligations.  

-  The  social  partners  advised  that  an  option  based  on  general  policy  guidance  and  one  on 

targeted action are not mutually exclusive and should be combined.  

-  EMCO  highlighted  the  heterogeneity  of  the  group  requiring  an  individualised  approach  to 

activation and the need to allow flexibility for MS to tailor their policies.  

-  The  Social  Protection  Committee  endorsed  the  general  approach  of  the  Commission,  but 
pointed  out  to  the  risk  of  crowding  out  resources  from  support  of  vulnerable  groups  most 
remote from the labour market.   

The outcome of the consultation pointed to a need to better balance a specific instrument with general 
policy  guidance.  The  initiative  was  therefore  re-oriented  towards  combining  an  instrument  focused 

48 

 
 
 
approach with general guidance, thus offering flexibility in implementation to the MS. JIAs address at 
individual level the heterogeneity of the group, while the embedded cooperation mechanisms aim to 
improve access to support for those with complex needs and more remote from the labour market. 

9.1.1.  Labour  Market  Observatory (LMO),  European  Economic  and  Social 

Committee (EESC) 

The  observatory  was  consulted  in  the  occasion  of  a  Conference  on  "Taking  action  on  long-term 
unemployment: national and European perspectives" which took place on 11 March 2015 in Zagreb, 
Croatia.  EESC  Members  welcomed  the  Commission's  initiative  and  participants  to  the  conference 
agreed to the challenges identified. 

9.1.2.  European Social Fund Committee 

The European Social Fund Committee was consulted on 26th March 2015. Following the consultation, 
the  Committee  issued  an  opinion  in  which  it  welcomed  the  initiative  of  the  Commission  and  also 
made the following comments:   

 

 

 

 

It  stressed  the  importance  of  aligning  the  initiative  with  already  existing  policy  instruments 
and resources in order to build synergies of and ensure consistency, including with initiatives 
supporting job creation and self-employment. 

It underlined that in many MS a substantial amount of the ESF is already dedicated to putting 
in  place  integrated  support  structures  for  long-term  unemployed.  The  ESF  therefore  has  an 
important  role  in  supporting  the  ALMPs  on  offer  in  the  MS  and  in  increasing  the 
effectiveness of interventions. 

It  considered  that  the  Commission's  initiative  can  add  value  to  the  way  national  and  ESF 
funding is used in MS to integrate the long-term unemployed into the labour market. 

It considered that the ESF can play a significant role in the implementation of the initiative by 
supporting  MS  interventions  for  addressing  long-term  unemployment  both  under  the 
employment  and  the  social  inclusion  thematic  objectives.  Implementation  of  the  initiative 
should  increase  the  effectiveness  of  ESF  actions  and  embed  them  further  in  mainstream 
ALMPs and social interventions. 

9.1.3.  European Network of Public Employment Services 

The  Network  of  European  Public  Employment  Services  drafted  a  contribution  on  the  proposed 
initiative140. It supported the principle of a Council recommendation as a positive initiative to improve 
LTU re-integration rates and stressed that the proposal for the Council recommendation should take 
into account the different starting points in the MS.  

In its contribution the Network stressed the following points:  

  Single Point of Contact: Where there is no one-stop shop established for LTU, a single point 
of  contact  -  or  a  less  costly  option  of    establishing  digital/automated  single  contact  points 
based on linking databases of benefits and employment authorities - are needed.  

140 http://ec.europa.eu/social/BlobServlet?docId=13881&langId=en  

49 

 
 
                                                            
  Coordinated  action:  An  integrated  approach  is  needed  to  overcome  multiple  barriers  to  re-
integration  including  organisations  from  the  public  and  private  sectors,  providing  social, 
family, health, and employability support services. 

 

Introducing  Personalised  Services:  Development  of  a  personalised,  tailored,  client  centred 
approach will be an essential component of a re-integration package.  

  Spelling out Mutual Obligations: Mutual obligations should detail possible support available 
through  counselling,  financial  assistance  and  social  services,  and  describe  the  commitment 
required from the client in return.  

9.1.4.  Employment Committee 

The  ad-hoc  working  group  of  the  Employment  Committee  was  consulted  on  30  March  2015.  The 
initiative  was  discussed  also  at  a  joint  EMCO-EPC  meeting  on  1  April  2015.  The  Committee 
welcomed the initiative of the Commission and recognised the relevance of the problems identified in 
the public consultation. The Committee stressed the following: 

  EU-level guidance might reinforce the MS' country-specific approach to supporting the long-

term unemployed in line with their individual needs.  

  The  initiative  should  be  aligned  with  already  existing  policy  instruments  and  resources  in 
order  to  build  synergies  and  ensure  consistency.  EMCO  emphasised  the  need  to  link  future 
initiatives to the Employment Strategy and the Employment Guidelines. 

  The  situations  differ  considerably  across  MS,  notably  regarding  the  levels  and  the 

characteristics of the long-term unemployed.  

  Employer  engagement  and  combining  supply  and  demand-side  measures  are  important 

elements. 

  An individualised approach to activation should be adopted. A mutual obligation approach is 

essential. 

9.1.5.  Social Partners 

On  24th  April  2015,  DG  EMPL  organised  a  consultation  with  the  social  partners,  including 
representatives of cross-industry organisations at European and national levels and sector federations.  

The  social  partners  agreed  on  the  relevance  of  the  problems  identified  and  the  necessity  of  an 
intervention to  support LTU. The social partners suggested considering  a combination of the policy 
options  proposed,  while  taking  into  account  the  EU  labour  market  needs,  synergies  with  existing 
initiatives  and  instruments  and  the  differences  among  MS.  Well-functioning  of  public  employment 
services and well-targeted active inclusion initiatives, including the provision of support to employers 
were found to be crucial for preventing and overcoming LTU.  

In addition to the above: 

  Trade  Unions  highlighted  the  importance  to  offer  incentives  to  those  employers  who  hire 
long-term  unemployed  and  to  equip  LTU  with  labour  market  relevant  skills  and 
qualifications. 

  Employer representatives stressed the need for better cooperation between public and private 
actors and the importance of better using funds available for supporting LTU rather than 
having additional funding. They supported a mutual obligations approach 

50 

 
 
 
 
The social partners also submitted written comments to the consultation: 

Employers  (a  joint  position  of  BUSINESSEUROPE,  CEEP  and  UEAPME)  proposed  in  their 
contribution  a  two  stage  approach.  As  a  first  step  they  see  the  necessity  to  focus  on  the  overall 
systemic factors and the roles of and interaction between different actors and services. An initiative at 
European level to support re-integration of LTU should be part of a systemic approach to job creation 
and higher levels of employment participation, by focusing on: 

-  more  efficient,  effective  and  integrated  services  to  the  unemployed  reflecting  available  best 

practices; 

-  more  cooperation  and  mutual  learning  between  public  employment  services  and  private 

employment agencies, municipalities and social services;  

-  Appropriate engagement of employers to strengthen the demand side approach. This includes 
closely aligning re-training and up-skilling opportunities offered as part of activation support 
measures with enterprises’ needs.  

As a  second  step,  they stress the importance of a targeted individualised approach to achieve better 
matching  of  available  workforce  with  available  jobs.  However,  they  do  not  consider  an  individual 
action offer that targets specific groups as the right approach. 

Trade  Unions  (ETUC)  stressed  that  initiatives  aiming  at  the  re-integration  of  LTU  into  the  labour 
market  should  lead  to  quality  and  sustainable  jobs  and  that  are  challenges  connected  with  the 
financing of LTU support in the context of budgetary constraints of those MS most concerned by the 
problem, which could reduce the impact of any proposed initiative if not addressed appropriately 

Trade Unions stressed that the options identified by the Commission should not be treated as being 
mutually exclusive. There is the need for better coordination among services and for comprehensive 
and  mutually  reinforcing  strategies,  taking  account  of  specific  circumstances  in  the  MS.  The 
development of ‘individual activation offer’ is considered as an important element. 

Trade  Unions  proposed  that  the  Commission  investigate  and  develop  the  idea  of  a  ‘European  job 
guarantee  for  the  long-term  unemployed’,  similar  to  the  Youth  guarantee,  with  European  financial 
support.  Finally,  trade  unions  stressed  that  social  partners  have  a  role  to  play,  particularly  in 
developing a framework to help prevent workers from falling into LTU. 

In addition, Eurocadres (Council of European professional and managerial staff), while not present at 
the  consultation  meeting,  submitted  written  comments  to  the  consultation.  Eurocadres  supported 
ETUC position and added that development of skills and provision of lifelong learning are among the 
key factors improving the chances of employment, emphasising also the role of voluntary mobility. 

9.1.6.  Social Protection Committee 

The  Social  Protection  Committee  was  consulted  on  6  May  2015.  The  Committee  stressed  the 
following points: 

  The  situation  of  long-term  unemployment  differs  across  MS  therefore  any  future  initiative 

should to be flexible to adapt to the national context. 

  The  initiative  should  take  into  account  that  LTU  with  more  complex  barriers  to  the  labour 
market  require  extra  support  in  order  for  activation  to  be  successful;  it  is  important  not  to 
divert resources from this group. 

  The initiative should be coherent with previous initiatives. 

51 

 
 
9.2.  Expertise used 

Both internal and external expertise was used in the development of the initiative: 

  Mapping  of  inclusion  contracts  and  co-ordination  of  income  support  with  activation 
conducted by the Network of Independent Experts on Social Inclusion between February and 
May 2015 

  Analytical  work  was  carried  out  using  available  surveys  (Labour  Force  Survey,  the  EU 

statistics on income and living conditions, and the Labour Market Policy Database).  

  A collection of ESF good practice initiatives and a mapping of MS initiatives were conducted 

internally by DG EMPL. 

  A review of existing cost-benefit studies on LTU interventions and a detailed assessment for 
five MS were conducted as part of the European Network of PES bench-learning process141. 

  Reports  of  mutual  learning  events  on  addressing  LTU:  Thematic  Review  Seminar  on 
“Tackling  long-term  unemployment  -  effective  strategies  and  tools  to  address  long-term 
unemployment”, 2012. Report of peer review of the public employment services' Network on 
good practices to address LTU, 2014.  

  The  European  Network  of  public  employment  services  organised  a  working  group  between 
January and April 2015, provided data on the share of registered long-term unemployed, their 
participation  in  active  measures  and  on  existing  public  employment  services  practices  for 
long-term unemployed and produced a report published in May 2015. 

141 ICON (2015). 

52 

 
 
 
 
 
 
 
                                                            
ANNEX  1 
ABBREVIATIONS AND GLOSSARY OF TECHNICAL TERMS USED 

A. LIST OF ABBREVIATIONS 

53 

 
 
 
 
 
REGIO 

RTD 

SANTE 

SJ  

SME 
SPC 
STU 

Directorate-General for Regional and 
Urban Policy 
Directorate-General for Research & 
Innovation 
Directorate-General for Health and Food 
Safety 
The European Commission’s Legal 
Service 
Small and Medium Enterprise 
Social Protection Committee 
Short-term unemployment/ short-term 
unemployed 

UEAPME  European Association of Craft, Small and 
Medium-sized Enterprises 
Public Employment Service of the 
Flemish region in Belgium. 
Youth Guarantee 

VDAB 

YG 

AGS 
ALMP 
BUDG 
CNECT 

CEEP 

COMM 

CSR 
EAC 

ECB  
ECFIN 

EMCO 
EMPL 

EMU 
EPC 
EPSC 
ERDF 
ESF 
ESIF 

ESPN 
ESTAT 

ETUC 
FISMA 

FTE 
GROW 

HOME 

IAP 
IPPR 
IT 
JIA 
JUST  

Annual Growth Survey 
Active Labour Market Policies 
Directorate-General for Budget 
Directorate-General for Communications 
Networks, Content and Technology 
European Centre of Employers and 
Enterprises providing Public Services 
Directorate-General for Communications 
Networks, Content and Technology 
Country specific recommendation 
Directorate-General for Education and 
Culture 
European Central Bank 
Directorate-General for Economic and 
Financial Affairs 
Employment Committee 
Directorate-General for Employment, 
Social Affairs and Inclusion 
Economic and Monetary Union 
Economic Policy Committee 
European Political Strategy Centre 
European Regional Development Fund 
European Social Fund 
European Structural and Investment 
Funds 
European Social Policy Network 
Eurostat, the statistical office of the 
European Union 
European Trade Union Confederation 
Directorate-General for Financial 
Stability, Financial Services and Capital 
Markets Union 
Full time equivalent 
Directorate-General for Internal Market, 
Industry, Entrepreneurship and SMEs 
Directorate-General for Migration and 
Home Affairs 
Individual Action Plan 
Institute for Public Policy Research 
Information Technology 
Job integration agreement 
Directorate-General for Justice and 
Consumers 

LAFOS 

In Finland, Labour Force Service Centres  

LMP 
LTU 

MS 
PES 
PIAAC 

Labour market policy 
Long-term unemployment  / long-term 
unemployed 
Member States 
Public Employment Service 
Programme for the International 
Assessment of Adult Competencies 

 
 
 
 
Activation 
Activation offer/support 
Activation rate 

Active inclusion 

Active labour market 
policies 
Caseload 
Coverage rate 
Employment incentives 

European Semester 

Hiring subsidies 
Inactivity 
Individual action plan  

Social integration contract 

Intensified case 
management 
Intensified service/support 

Investment constraint 

Job integration agreement 

Enforcement of benefits 
conditionality 
Life-long learning 
Long-term unemployment 
rate 
Low qualified 
Low skilled 
LMP measures 
Offer 

One stop shop  
Passive labour market 
measures/ 
Passive support 
Profiling 
Single point of contact 

Short-term unemployment 
Social enterprise 

B. GLOSSARY 

Efforts to get working-age people off benefits and into work. 
Measures aimed at getting working-age people off benefits and into work. 
Share of people [in this context long-term unemployed] that are activated (placed 
on an ALMP measure) 
Active inclusion means enabling every citizen, notably the most disadvantaged, to 
fully participate in society, including having a job. 
Government programmes that intervene in the labour market to help the 
unemployed find work. 
The number of cases handled by employment counsellors. 
Share of the amount or extent to which jobseekers access certain types of support. 
Wage subsidies or targeted reductions in social security contributions for 
employers hiring certain categories of jobseekers. 
Yearly cycle of economic policy coordination set up by the European Union. Each 
year, the Commission undertakes a detailed analysis of EU MS' plans of 
budgetary, macroeconomic and structural reforms and provides them with 
recommendations for the next 12-18 months. 
See "employment incentives" 
Persons not employed and not seeking a job. 
Documents  to  which  jobseekers  and  employment  service  providers  subscribe, 
stating rights and obligations, goals and steps to achieve the goals. In most cases 
these  can  be  renewed  and  revised  to  adjust  to  the  changing  situation  of  a 
jobseeker. 
Integration contracts state the obligations of beneficiaries of unemployment/social 
assistance (e.g. registration with PES, job search) and their rights, particularly to 
social services and benefits (e.g. care or childcare arrangements, psycho-social 
counselling, housing support or debt counselling).  
Very individual intense support and assisting approach. 

Providing more and better support, implying higher frequency of contacts  
between jobseeker and case handlers 
Limitations to production/employment due to lack of investment, e.g. due to lack 
of access to credit 
Job integration agreements are written agreements between the jobseeker and 
single point of contact with the objective of transitions into employment. Drafted 
to reflect the individual jobseeker's situation, these agreements detail a package of 
individualised measures, define goals, timelines, responsibilities and review 
clauses, and indicate both the active and passive support measures available.  
Sanction or threat of sanction for refusal to take an offer (e.g. ALMP or Job offer) 

Continuing education. 
The number of people who are out of work and have been actively seeking 
employment for at least a year. 
People who do not have finished secondary school (achieving ISCED level 1-3) 
People with low basic skills e.g. literacy, numeracy or basic computer literacy. 
See active labour market policies 
In this context it refers to any type of service (counselling, guidance etc.), job 
offer or placement on an ALMP measure. 
Gathering various services under one roof to simplify access to services. 
Unemployment insurance/ social welfare payments to unemployed people (see 
also unemployment benefits). 

Assessing the individual employment potential. 
Coordination of client intake and follow-up through case handling facilitating 
contacts between the jobseeker and the other relevant services or authorities. 
Unemployment period that does not last longer than one year. 
A social enterprise is an organisation that applies commercial strategies to 

 
 
 
 
Structural unemployment 

Support measure 
Transition to employment 
Unemployment benefit 

maximise improvements in human and environmental well-being. 
This concept refers to the level of unemployment that depends on institutional, 
structural, or behavioural elements, with – at least theoretically - no role for the 
economic cycle. 
In this context, it refers to ALMP measures 
The successful integration into the labour market. 
Social welfare/ social insurance payments by authorized bodies to unemployed 
people. 

 
 
 
 
 
 
ANNEX 2 - SUPPORTING DATA AND ANALYSIS 

Contents 

1.  WHO ARE THE LONG-TERM UNEMPLOYED? ................................................. 58 

2.  THE REGIONAL DIMENSION OF LONG-TERM UNEMPLOYMENT ............. 59 

3.  TRANSITION RATES FROM UNEMPLOYMENT TO EMPLOYMENT AND 

INACTIVITY ............................................................................................................ 61 

3.1.  Transitions from long-term unemployment to inactivity ................................ 62 
3.2.  Determinants of transition rates to employment ............................................. 65 
3.2.1.  Strength of support to the long-term unemployed............................. 66 
Investment constraints ....................................................................... 69 
3.2.2. 
3.2.3.  Unreformed labour markets ............................................................... 70 

4.  CURRENT SUPPORT FOR THE LONG-TERM UNEMPLOYED ....................... 73 

4.1.  Coverage: Income support for the long-term unemployed ............................. 73 
4.2.  Coverage: Active support for the long-term unemployed ............................... 75 
Intensified support ............................................................................. 77 
4.3.  Activation design –labour market relevance of support .................................. 78 

4.2.1. 

5.  COSTS AND BENEFITS OF TRANSITIONS TO EMPLOYMENT ..................... 80 

 
 
 
 
 
1. 

WHO ARE THE LONG-TERM UNEMPLOYED? 

The LTU in the EU are on average more often of medium and low level of education (87%) and are 
slightly  more  commonly  male  than  female  (54%)  (Figure  1).  Almost  a  fifth  (19%)  has  never  been 
employed.   

Figure 1. LTU characteristics before and after the crisis (2008 and 2013) 

Source: Eurostat LFS 2008-2013, own calculations 

The age distribution of the long-term unemployed is quite even, with slightly higher rates before 30 
and after 55 (Table 1) and remained stable throughout the crisis.  

Table 1. Distribution of LTU by age and duration, 2013 

LTU, ths. people  
% of LTU 
LTU as % of total 
active population 
LTU as % of active 
population for the 
age group 
LTU as % of total 
unemployed 
LTU as %  unempl 
for age group 

35-39 

30-34 

 25-29 

 15-24 
1889.0  1666.6  1500.1  1441.6  1471.0  1442.6  1301.1  1646.9 
13.3% 
15.3% 
0.7% 
0.8% 

11.7% 
0.6% 

13.5% 
0.7% 

12.1% 
0.6% 

11.7% 
0.6% 

11.9% 
0.6% 

10.5% 
0.5% 

45-49 

40-44 

50-54 

55+ 

Total 
12359.0 
100% 
5.1% 

8.0% 

6.4% 

5.2% 

4.7% 

4.6% 

4.5% 

4.5% 

4.2% 

5.1% 

7.2% 

6.4% 

5.7% 

5.5% 

5.6% 

5.5% 

5.0% 

6.3% 

47.2% 

33.9% 

43.6% 

45.9% 

48.8% 

51.9% 

54.0% 

56.5% 

60.3% 

47.2% 

Older  workers  have  more  stable  employment  and  are  overall  less  affected  by  unemployment. 
Source: Eurostat LFS 
However,  when  they  become  unemployed,  they  have  higher  risk  to  remain  so.  This  leads  to  an 
increase  with  age  in  the  share  of  LTU  among  the  unemployed,  by  steps  which  are  highly  country 

58 

 
 
 
 
 
 
  
 
 
specific (Figure 2). The share of LTU among unemployed aged 40 to 49 ranges from 27% in AT or FI 
to 72% in EL and 75% in SK. 

Figure 2. Long-term unemployed as share of unemployed, by country 2013 

Source: Eurostat, LFS 

Men  are  more  often  in  LTU  than  women,  especially  in  some  countries  (MT,  IE,  FI,  UK)  and  if 
compared to short-term unemployed (STU) (Figure 3 below). 

Figure 3. Share of LTU by gender and share of men in short-term unemployment (STU) - 2014 

Source: Eurostat, LFS 

2. 

THE REGIONAL DIMENSION OF LONG-TERM UNEMPLOYMENT 

The regional NUTS2 dispersion of LTU increases at higher rates of LTU. Targeting the initiative at 
regional level would not add considerably to its precision. For example, assuming that only regions 
with very high LTU rates (50 % higher than EU average of 7.5%) should be engaged would exclude 
entire  countries  as  Romania,    Germany,  France,  Hungary,  Estonia  or  would  cover  only  arbitrarily 
selected regions regarding other socio-economic performances. For example, under these conditions 

59 

25%50%75%100%MTIEUKROEEFIBGBEDESEATLVNLSKCYFREU28HUDKITPLESHRPTSILTELCZLU% of LTU (or STU)STU menLTU menLTU women 
 
 
 
 
 
 
 
only a capital region for Belgium would qualify as a target group. The added value of targeting the 
initiative at regional level is thus limited. Moreover, the inter-institutional cooperation aspects cannot 
only  be  sustainably  addressed  only  at  regional  level,  as  in  most  MS  they  depend  on  relations  and 
arrangements between centralised public bodies. 

Figure 4.  LTU rate by NUTS2 regions and national average, 2014 

d
n
a
2
S
T
U
N
y
b
)
e
c
r
o
f

r
u
o
b
a

l

f
o
%

(
e
t
a
r
U
T
L

e
g
a
r
e
v
a
y
r
t
n
u
o
c

25,0

22,5

20,0

17,5

15,0

12,5

10,0

7,5

5,0

2,5

0,0

SE AT LU DK FI DE UK CZ MT NL RO EE HU PL FR BE LV LT SI

IE BG CY IT PT SK HR ES EL

Only a weak relationship exists however between the level of NUTS2 GDP and the LTU rate, and the 
degree  to  which  higher  LTU  rates  attribute  to  less  developed  regions  varies  considerably  across 
countries. Within countries, highly varied relationships are observed  between regional  (i.e.  NUTS2) 
GDP and LTU rates. Figure 5 displays that a clearer and as expected relationship – i.e. a higher GDP 
is associated with lower LTU levels – is only noted in a handful in countries, such as ES, IT or BG. In 
other  countries,  factors  other  than  GDP  are  of  higher  importance.  For  example,  a  U  shaped 
relationship between LTU and GDP is observed in BE. In the NL, very low dispersion in LTU rates is 
noted  for highly  varied  GDP  levels.  The  same  holds  for  SE.  In FR,  distinctive  groups  by GDP  and 
LTU  rates  occur.  In  a  number  of  countries,  as  PT  or  RO,  higher  LTU  rates  also  seem  if  anything 
associated  with  higher  rather  than  lower  GDP  levels.  In  addition,  capital  regions  stand  out  as  the 
biggest outliers in most countries –often with the largest GDP levels and large if not the largest (i.e. 
BE) LTU rates.  

60 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Figure 5. Relationship between regional GDP and LTU rates - selected countries 

Source: DG EMPL calculations based on EUROSTAT data 
Note: here and further on, only countries with larger number of NUTS2 regions are included; for scale reasons, the GDP 
level of London is capped.  

3. 

TRANSITION RATES FROM UNEMPLOYMENT TO EMPLOYMENT AND INACTIVITY 

Long-term unemployed have about two times lower chances of finding employment than short-term 
unemployed, with the situation worsened due to the financial crisis (see Figure 6). If in 2006 almost 
25% of long-term unemployed (i.e. those in 2005) were able to find jobs, only 16% of them had this 
chance  by  2014  (see  Panel  A  in  Figure  6  below).  These  results  pertain  to  12  EU  member  states142, 
though shorter (available) series for 24 EU countries143 reflect a comparable trend (see Panels B and 
D).  In  contrast  to  LTU,  the  last  few  years  have  already  brought  employment  gains  to  STU  –  their 
transition rates to employment increased from 29% in the period of 2012-2013 to 33% in the period of 
2013-2014  (see  Panel  C).    LTU  transition  rates  to  employment  do  not  yet  reveal  signs  of 
improvement.   

Some long-term unemployed are able to break the LTU spell by, for example, finding temporary jobs 
after which they return to unemployment (LTU to STU). This share of LTU has remained relatively 
stable – of about 6% to 8% of LTU  – since 2005 (see Panel A). Persistent LTU status accounts for 

142 Selection due to longitudinal EU-LFS data availability: BE, CY, EE, GR, HU, IT, MT, PL, RO, SE, SI, SK.  
143 Selection due to longitudinal EU-LFS data availability: EU24 (without BE, LU, NL, PT).  

61 

051015200510152005101520051015200200004000060000020000400006000002000040000600000200004000060000ATBEBGCZDEELESFRHUITNLPLPTROSEUKLTU as % of active population, 2012GDP at current market prices (PPP per capita), 2012Graphs by country 
 
 
 
 
 
                                                            
major part of transitions from LTU and has increased from 40% in the period of 2005-2006 to 49% in 
the period of 2013-2014, with a peak of 52% a year before. As Figure 7 shows, the slight drop in a 
persistent  LTU  status  in  the  last  few  years  is  mainly  attributable  to  once-again  starting  to  increase 
rates  into  inactivity  rather  than  jobs.  LTU  transition  rates  into  inactivity  were  on  a  continuous 
decreasing  trend  from  a  peak  time  in  2008-2009  until  2012-2013.  These  combined  trends  lead  to  a 
continued increase of the share of LTU among unemployed in most MS144. 

Figure 6. Outflows from long-term and from short-term unemployment 

(A): from LTU, 12 EU MS 

 (B): from STU, 24 EU MS 

 (C): from STU, 12 EU MS 

 (D): from STU, 24 EU MS 

Source: EUROSTAT experimental EU-LFS flow statistics. 

3.1. 

Transitions from long-term unemployment to inactivity 

The longer the unemployment duration, the more frequent are also drop-outs to inactivity. Based on 
experimental transition rates from unemployment to inactivity, the average EU24 transition rate from 
unemployment  to  inactivity  is  about  20%  among  unemployed  from  1  to  2  years  and  about  5 
percentage  points  higher  -  for  those  in  unemployment  for  more  than  2  years.  The  chance  of  being 
inactive becomes larger the longer the unemployment duration is (see Figure 7). A similar pattern can 
be observed in the US. 

144 Only in three MS (IE, HU, SK) there is a clear downward trend in the share of long-term unemployed. 

62 

 
 
 
 
 
 
 
                                                            
 Figure 7. Transition rates from unemployment (2008-2012) to inactivity (2009-2013), by unemployment 
duration in the previous year, EU24 (without BE, LU, NL, PT) 

Source: Eurostat, EU-LFS, ad-hoc experimental calculations of transition rates. 

As shown in Figure 13, variation in transition rates from unemployment to inactivity across countries 
is also large, from as low as 3% (Greece) to 42% (Italy) among unemployed from 1 to 2 years.  In a 
few countries transition rates to inactivity are higher for those in unemployment from 1 to 2 years than 
for  those  unemployed  for  more  than  2  years  –  e.g.  Ireland  and  Germany  (Figure  13).  Also,  if  in 
comparison to transition rates from unemployment to employment, transitions to inactivity have much 
more diverse pattern across unemployment durations. In some countries little difference is noted by 
unemployment duration – e.g. Ro, BG, EL, pointing to other factors than unemployment duration as 
strong determinants of exits to inactivity. 

63 

 
 
 
 
 
 
Figure 8. Transition rates from unemployment to inactivity (2013-14) by duration of unemployment 

Source: Eurostat, EU-LFS, ad-hoc experimental calculations of transition rates.145 

Analysing the impact of age on transition rates to employment, this appears to be particularly stable 
for the segment 25- 55 years old. Beyond 55, transition rates decrease while labour market 
detachment becomes high. After 12 months of unemployment, changes in transitions to inactivity 
between 2009 and 2013 were lower for all age groups (Figure 9).  

145  Note: Transition to inactivity rate is calculated as the share of unemployed people in year "n-1" - for a specific duration 

spell - who become inactive in year "n"; "I" refers to inactivity status; countries are ranked by the transition rate for those 
unemployed from 1 to 2 years; data of limited reliability for SI and AT for rates of "1<=U<2 years", and for "U>=2 
years" in SK; country estimates are reported on countries with available data.  

64 

 
 
 
 
 
 
                                                            
Figure 9. Transition rates from unemployment to employment and inactivity, by age groups EU24 

Source: Eurostat, EU-LFS, ad-hoc experimental calculations of transition rates. 

3.2. 

Determinants of transition rates to employment 

Figure  15  we  show  that  in  some  countries  transition  rates  to  employment  started  to  improve  (see, 
group  “increase”),  following  generally  improving  employment  situation  in  these  countries.  There  is 
substantial  progress  in  transition  rates  of  LTU  in  Denmark  and  Estonia  –  against  otherwise  rather 
“flat”  growth  of  total  employment  rates.  The  worrying  situation  is  however  noted  in  the  group  of 
countries  with  recently  decreasing  transition  rates  of  LTU,  despite  generally  steady  (i.e.  Austria, 
Finland) or improving overall employment situation (i.e. Lithuania, Latvia). In a number of countries 
transition  rates  to  employment  are  mainly  unchanged  and  in  line  with  similar  development  in  total 
employment rates. In Germany, on the other hand, stable transition rates are observed whereas total 
employment  rate  are  already  on  the  rise.    In  sum,  the  developments  observed  in  transition  to 
employment rates of LTU and total employment rates show that numerous other factors than general 
economic situation influence job finding chances of this population group.  

65 

 
 
 
 
 
 
Figure 10. LTU (in t-1) to E (in t) rates and total employment rates (in t) 

Source: Eurostat, EU-LFS, ad-hoc experimental calculations of transition rates and EUROSTAT series on employment. 

A full analysis of causal relationships between institutional, structural variables and the transitions to 
employment of the long-term unemployed is beyond the scope of this paper. The sections below show 
the correlation of variables associated with activation support with transitions to employment of the 
long-term unemployed, as well as those of structural variables related to labour market flexibility.  

3.2.1. 

Strength of support to the long-term unemployed  

Figure  12  shows  a  strong  correlation  between  ALMP  expenditure  (inclusive  on  public  employment 
services)  and  transitions  to  employment,  pooling  the  data  for  2005-2013.  Countries  with  highest 
investment  on ALMP services register highest transitions from LTU to employment. That said,  one 
should note that dispersion is very high among countries with low ALMP expenditures. 

66 

506070805060708050607080506070805060708010203040102030401020304010203040102030402005200720092011201320052007200920112013200520072009201120132005200720092011201320052007200920112013decrease, ATdecrease, BGdecrease, FIdecrease, HRdecrease, ITdecrease, LTdecrease, LVincrease, CYincrease, CZincrease, DKincrease, EEincrease, HUincrease, IEincrease, PTincrease, SEincrease, SIn.a., UKsteady, DEsteady, ESsteady, GRsteady, NLsteady, PLsteady, ROsteady/unclear, FRsteady/unclear, SKLTU to E rate, % (left axis)Employment rate, % (right axis)Graphs by group and Country  
 
 
 
 
 
 
 
 
Figure 11. Expenditure on ALMP and transitions from LTU to employment (2005-2013) 

Source: Eurostat, EU-LFS, ad-hoc experimental calculations of transition rates and LMP database. 

Figure  12  below  shows  the  correlation  between  transition  rates  of  the  long-term  unemployed  and  a 
composite index of ALMP strength, detailed in the report on Economic and Social Developments in 
Europe 2014.The Figure shows that the lower the strength of ALMPs, the lower the transition rates to 
employment  are.  Higher  levels  of  investments  in  ALMPs  have  on  the  other  hand  a  strong  positive 
correlation with transitions to employment for the long-term unemployed. 

Figure 12. Investment in activation and transitions from LTU to employment  

EE 

DK 

)
3
1
-
2
1
0
2
(
E
o
t
U
T
L
m
o
r
f

s
n
o
i
t
s
n
a
r
T

50

45

40

AT 

SE 

PL 

CZ 
FI 
SI 

HR 
HU 

ES 

NL 

IE 

PT 
LV 

CY 

35

30
SK 
25

20

15

10

5

0

IT 

BG 

EL 

MT 

DE 

RO 

R2=0.19 
Correl=0.44 

-1,5

-1

-0,5

0

0,5

1

1,5

2

2,5

3

LMII score ALMP 

Source: Eurostat, EU-LFS, ad-hoc experimental calculations of transition rates and ALMP index presented in ESDE 2014. 

The same applies to the levels of lifelong-learning participation of the unemployed, which is a close 
proxy for overall activation participation. Figure 13 below shows that low levels of participation of 
the LTU in life-long learning translate into lower transitions to employment.  

67 

ROROEEBGROBGROROEEEEROROROROBGEELVBGLVLVLVEEHRHRBGHRGRLVEEBGLTLVSKLTEELTLVSKLTSKSKCZLTSKSKCYCYEEHUHUEESKSKHUCZPLPLSKPLHUHUGRHUPTCZPTSIGRGRGRGRCYGRPLCZHUCZSIITCZHUHUCZESESGRITCZCZSIITITCYPTCYITCYCYCYCYITITESITSIITESESUKUKESIEIEIEATIEATATATFIDESEDEFIDEFIDEDEFRFIFIFRFRFIFRNLSEFRFRSEFRSESENLSENLSENLNLDKDKDKDKDKDKDK1020304050Transition from LTU to Employment051015ALMP exp. (categories 1-7) per person wanting to work, in EUR 
 
 
 
 
 
 
 
 
 
 
 
Figure 13. Unemployed participation in lifelong learning and transitions from LTU to employment 

Source: Eurostat, EU-LFS, ad-hoc experimental calculations of transition rates.  

Figure 14 indicates there is a strong and positive relationship between higher net replacement rates of 
the LTU (i.e. the rate measures income before and after the loss of job) and LTU finding jobs. It 
actually shows that countries which have high net replacement rates also can achieve very high exit to 
employment rates. The variation is large across countries, though none of countries with low 
replacement rates registers high transitions to employment for the long-term unemployed.  

68 

ATBGCYCZDEDKEEELESFIFRHRHUIEITLTLVMTNLPLPTROSESISKUKR² = 0.41760510152025303540450.05.010.015.020.025.030.035.040.045.0Participationof unemployed (25-64 ) to education/training in 2012Exitrate out of long-term unemployment ,to employment (2012-13)Correlcoeff = 0.65 
 
 
 
 
 
Figure 14. OECD Net replacement rate of LTU and transitions from LTU to employment (2005-2013) 

Source: Eurostat, EU-LFS, ad-hoc experimental calculations of transition rates.  

The  remainder  of  this  section  will  analyse  the  impact  of  structural  barriers  (investment  constraints, 
unreformed  labour  markets  and  low  educational  achievement  and  attainment)  on  transitions  to 
employment.  

3.2.2. 

Investment constraints  

Reduced labour demand accounts for a large part of the rise in LTU. Unemployment rates are largely 
driven by the different growth trajectories in the MS.146 Weak cyclical labour demand has depressed 
job  finding  rates,  leading  to  lengthened  unemployment  duration.  Policies  aimed  at  enhancing 
macroeconomic  demand  –  such  as  expansion  of  fiscal  and  monetary  policy  –  can  reduce  this 
component.147  However,  this  is  not  enough.  Some  of  the  increase  of  unemployment  is  already 
structural and needs to be addressed by strengthened support or structural reforms. 

Figure  15  below  illustrates  the  relation  between  cyclical  and  structural  unemployment,  including  a 
forecast to 2016. While cyclical unemployment (mostly affecting the short term unemployed) will be 
re-absorbed  by  the  end  of  2016,  the  structural  component  (mostly  affecting  the  long  term 
unemployed) would persist. 

Figure 15: Structural and cyclical components of unemployment in the EU-28, with forecast till 2016 

146 Van Ours (2015).  
147 As also explained by Mario Draghi, in his address "Unemployment in the euro area" at Jackson Hole on 22 August 2014. 

69 

ROROROROROROROROROBGBGBGBGLTLTBGBGHRHRHRHUHUSKEESKSKSKEESKHUEESKSKSKSKLTLTLTHUEEHUESPLESHUHUESESHUESPLHUPLESPLLVEELVEEEEEEEELVLVLVLVLVCZCZCZSISICZCZDESISICZCZDECZDEDECZGRGRDEGRGRGRGRGRGRFRFRFRFRFRFRFRCYCYCYCYCYCYITCYITCYITITUKITCYITITITITUKFIFIFIFISESESESEFISEFISESENLIEIENLNLNLIENLDKDKDKDKDKIEDKDK1020304050Transition from LTU to Employment20406080NRR: single earner, previous earnings = 67% AW: LTU [OECD] 
 
 
 
                                                            
12

10

8

6

4

2

0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

long term

total unemployment

structural

Source:  Eurostat  and  Ameco.  Note:  cyclical  unemployment  is  the  difference  between  total  and  structural 
unemployment, shown by up and down bars.  

The bigger the delay in action and the longer unemployment spells last, the higher the chances that the 
increase  in  LTU  will  entrench  the  hard-to-remedy  structural  unemployment,  with  long  lasting 
consequences.  Figure  16  illustrates  the  strong  correlation  between  increases  in  LTU  rates  and 
increases in structural unemployment between 2008 and 2013.  

Figure 16: Link between long-term and structural unemployment developments (percentage point)

Sources:  Eurostat,  European  Commission  estimates  and  ESCB  calculations,  from:  Anderton,  R.,  Jarvis,  V.  et  al.  (2015), 
'Comparisons and Contrasts of the Impact of the Crisis on Euro Area Labour Markets.' ECB Occasional Paper No. 159. 

3.2.3.  Unreformed labour markets 

Weak labour market institutions contribute to a protracted labour market adjustment following shocks, 
and to a structurally high LTU.  

Employment  protection  legislation  creates  incentives  for  workers  and  firms  to  invest  in  existing 
relations, but by making dismissals more costly, it can deter hiring in the first place, with potentially 

70 

 
 
 
 
 
detrimental  effects  on  LTU.148  Empirically  its  impact  on  employment  and  transitions  out  of 
unemployment, especially during times of low labour demand is unclear. On the one hand, high and 
uniform levels of employment protection with threshold effects lead to insider-outsider dynamics on 
the labour market, making it more difficult to re-integrate the long-term unemployed. Higher EPL can 
also mean lower numbers of new hirings, especially the longer the average unemployment spell, and a 
higher incidence of LTU. A high EPL can lower employment expansion, and thus keeps LTU high in 
the aftermath of a crisis149. The effect of employment protection on the probability of being hired is 
particularly strong for those workers whose productivity is a priori uncertain, such as the long-term 
unemployed.150 

Figure 17. Employment protection legislation and transitions from LTU to employment (2005-2013) 

Source: Eurostat, EU-LFS, ad-hoc experimental calculations of transition rates  

On  the  other  hand,  some  countries  with  high  EPL  have  both  high  employment  rates  and  good 
transitions  from  LTU  into  employment  (e.g.  DE  and  NL).  Moreover,  during  times  of  low  labour 
demand  EPL  reform  has  not  been  found  to  have  an  impact  on  transitions  in  the  short-  to  medium-
term,151 with some studies signalling that in such times reducing EPL may result in more dismissals 
rather than hiring.152  

Figure  17  shows  the  correlation  between  transition  rates  of  the  long-term  unemployed  and  OECD 
employment  protection  legislation  index.  Though  the  strength  of  relationship  is  weak,  if  anything 

148 Young, D. (2003). 
149 Berger and Danninger (2006). 
150 Blanchard, et al (2014). 
151  European  Commission  (2014),  Employment  and  Social  Developments  in  Europe  2014:  The  Legacy  of  the  Crisis: 

Resilience and Challenges, pp. 75-93 

152 OECD (2013) and ILO (2014). 

71 

UKUKIEIEFIFIBGBGFIIEFIBGFIBGFIIEBGBGEEEEEEEESKHUDKDKDKDKSKPLESHUHUHUHUHUGRHUPLHUPLHUPLDKDKDKEEGREEEEGREEEESECYHRSESEHRCYSESECYCYCYATCYCYHRATCYCYSEATATSEFRLTLTLTSKCZSKCZSKFRSKFRSKSKLTFRFRESESFRSKFRLTESROCZROROROPTSICZROROESESROSISICZROCZROLVCZNLGRGRGRSILVGRNLITGRNLNLNLLVLVCZCZLVLVLVDEDEDEPTDEDEITITITITITITITITPT1020304050Transition from LTU to Employment1.522.533.54OECD employment protection legislation index, EPRC 
 
 
 
                                                            
higher EPRC is associated with lower transitions rates. Both observations (i.e. weak and/or negative 
relationship) are actually in line with existing literature findings.  

EPL  alone  cannot  explain  labour  market  outcomes  but  in  combination  with  other  labour  market 
institutions it can be utilised to combat LTU and a dual labour market. One such example are short-
time  working  schemes  accompanied  by  partial  unemployment  benefits  that  were  extensively  used 
during  the  early  phase  of  the  recession  and  were  successful  in  maintaining  employment  and 
containing unemployment.153  

A  high  tax  wedge  increases  the  cost  of  labour  to  firms,  potentially  increasing  unemployment  and 
LTU levels. Specific schemes, such as recruitment subsidies or tax credits can mitigate the negative 
effects  of  the  tax  wedge.  Similarly,  high  minimum  wages  relative  to  average  wages  can  make 
employing  lower-productivity  individuals,  such  as  low-skilled  workers,  too  costly,  and  increase 
inactivity and LTU. Examining the relationship between exits from long-term unemployment and the 
tax  wedge154,  a  weak  relationship  appears,  and  the  correlation  seems  to  be  reversed  compared  to 
theoretical expectations – the higher the tax wedge, the higher the LTU exits to employment.   

A functioning social dialogue can help reducing unemployment in general, and also limit LTU. The 
LTU rate is traditionally smallest in countries with a very strong social dialogue tradition, with trust 
among the social partners. A culture of cooperation helps adjustment in the day-to-day business, while 
national  agreements  between  social  partners  can  also  help  the  adjustment  of  wages  and  prices  in 
response to major macroeconomic shocks, avoiding sudden fluctuations in employment.  

153  European Commission (2014), pp. 87-89 
154  The  tax  wedge  is  calculated  for  low  wage  earners  (as  %  of  the  total  labour  cost)  on  low  wage  earners  (67  %  of  the 

average wage for 2013; Source: Joint European Commission-OECD project, Tax & benefits indicators database  

72 

 
 
 
 
 
                                                            
 
Figure 18. Tax wedge for low income earners and transitions from LTU to employment, 2005-2013 

Source: Eurostat, EU-LFS, ad-hoc experimental calculations of transition rates and Tax & benefits indicators database 

Barriers  to  geographical  labour  mobility  cater  for  persistent  unemployment  differences  across 
regions,155  and  hence  to  persistence  of  LTU.  Policies  that  make  mobility  easier,  including  various 
policies  of  the  European  Union,  help  labour  market  adjustment  and  act  against  long-term  labour 
market exclusion.  

4. 

CURRENT SUPPORT FOR THE LONG-TERM UNEMPLOYED 

4.1. 

Coverage: Income support for the long-term unemployed 

Most MS provide income support to long-term unemployed. As shown in Figure 19 below, in 10 MS 
the unemployed may still receive contributory-based benefits after 12 months of unemployment.  In 
general, the average duration of unemployment benefit is much below the maximum duration in most 
MS. 

In  all  MS  except  IT,  workers  who  have  exhausted  their  unemployment  benefits  may  be  eligible  for 
non-contributory social assistance benefits. Non-contributory benefit schemes distinct from the social 
assistance (such as unemployment assistance) exist in 10 Members States (AT, DE, EE, ES, FI, FR, 
IE, MT, PT, UK)156.  

155 Boeri et al (2000) 
156 MISSOC/European Commission 

73 

PLPLPLPLPTSKSKPTSKDKSKDKEEDKSKDKSKSKEEEEEEHRHRHRDKSKEEEEGREEEEEELTLTLTLTDKLTDKSKGRGRPTLVGRCZGRCZLVGRSIROROROROLVCZCZSICZSICZSISESESECZGRSEGRSECZCZLVLVROLVROLVROROROSESEITITITHUITITITITITITATATATFRHUATDEHUHUDEDEFRFRFRFRFRFRDEHUDEHUHUHUHU1020304050Transition from LTU to Employment3540455055Tax wedge, single person, 100% AW 
 
 
 
 
 
 
                                                            
Figure 19: Maximum duration of unemployment benefit across MS 2007/2014 

Source: MISSOC 

Generally,  as  shown  by  Figure  20  below,  the  share  of  long-term  unemployed  covered  by 
unemployment benefits has decreased between 2007 and 2013. 

74 

 
 
 
 
 
 
Figure 20: Unemployment benefit coverage of long-term unemployed 

Source: Eurostat and EMPL LFS157.  

4.2. 

Coverage: Active support for the long-term unemployed 

Different  approaches  can  be  observed  when  it  comes  to  defining  the  focus  of  activation  support 
measures during the unemployment spell. Whereas some countries tend to prioritize people closer to 
finding work (MT, NL, UK), others choose to focus on people further from the labour market (FR, 
LT, SE).  

Based on information available to the European Network of PES and to ESPN, only three MS make 
statistics  on  the  share  of  LTU  who  receive  activation  support  publicly  available.  In  DE  and  FI,  the 
most  represented  category  is  composed  of  long-term  unemployed  receiving  only  benefits  and  no 
activation support (89% of LTU in DE158 and 78% of LTU in FI), while in LV those being granted 
activation support and no benefit prevail (73% of LTU). 

157 Note: IE, HR and NL: not covered. No data for UK in 2010. STU stands for short-term unemployed (less than 12 months) 
and LTU stands for long-term unemployed (unemployed 12 months or more). EU-25 =EU-28 minus NL, IE, UK (and AT 
in 2013). * The coverage rate is the ratio of the unemployed who received unemployment benefits or assistance and those 
who did not receive them in each category of unemployment duration (STU and LTU). 

158 The German labour market statistics provide only data on the benefit receipt of the 88% of all long-term unemployed, 
who are in the legal competence of the Social Code Book II with 100% receiving basic income support for job-seekers. 
No data are available on the benefit receipt of the 12% of LTU in the legal competence of Social Code Book III. 

75 

 
 
 
 
 
 
 
                                                            
The  questionnaires  of  the  European  Network  of  PES  identify  6  cases  of  PES  internal  performance 
targets linked to LTU activation: 

Table 2: National targets on activation of LTU, 2015 

Target 

Achievement 

BE –VDAB 

14% of long-term unemployed outflow to work 

14.7 % 

EE 

FR 

IE 

LV 

NL 

SI 

85 % LTU participation in labour market services within 12 months 

86 % 

Target: increase the number of LTU participating in intensive support 
to 350.000 in 2015 ( 2014 reference figure: 230 000)  

N/A 

Decrease the number of jobseekers registered at least 12 of the last 15 
months  in category A, among jobseekers registered in category A, B, 
C. 

Move 75,000 long-term unemployed at start of 2012 into employment 
by end 2015. 

Reduce inflows to LTU(persistence rate) to 25% 

22.500  for 2014 

60.000 cumulated 

28%  in 2014 

85 % of LTU involved in active labour market measures  

5 000 intensive placements for persons entering LTU 

16 471 LTU to be placed in active measures.  

63.4 % 

120% 

105 % 

Source: European Network of Public Employment Services 

Overall,  PES  in  19  MS  neither  target  explicitly  the  activation  of  the  long-term  unemployed  nor 
publish the share of those receiving activation support.  

Only 12 MS have data on the share of the registered unemployed receiving social assistance benefits 
(Table 3); they range from a high share in IE (76%) to very low shares in EL (only 1%). 

76 

 
 
 
 
 
 
 
 
Table 3: Share of registered unemployed receiving social assistance benefits 

AT 

BE 
(VL) 

DK 

FR 

EL 

HR 

HU 

IE 

PL 

PT 

SI 

SK 

2013 

9% 

4% 

32% 

9% 

1% 

18% 

35% 

76%  N/A 

13% 

28% 

41% 

2014 

10%  N/A 

31% 

9%  0.4% 

19% 

31% 

76% 

16% 

14% 

32% 

39% 

2015 
(Q1) 

19% 
N/A 
Source: European Network of Public Employment Services 

10%  N/A 

9% 

1% 

32% 

76% 

13% 

15% 

33% 

36% 

4.2.1. 

Intensified support 

While  several  PES  now  use  specialist  youth  counsellors,  fewer  PES  have  counsellors  specifically 
working  with  the  long  term  unemployed.  PESES  in  9  MS  are  using  LTU  counsellors  or  have  staff 
directly servicing the LTU client group.159 Table 4 below provides an overview of the PES that have 
dedicated support for the LTU, and the numbers of frontline staff dealing directly with the LTU160.  

Table 4: PES staff directly servicing the long-term unemployed (2014) 

Country 

Total number of 
staff (FTE) 2014  

Staff directly 
servicing LTU  

% of total PES staff 
directly servicing 
LTU 

Belgium LE 
FOREM 

3 593.4 

769 FTE for both 
young and LTU 

21 % 

3 727 (net FTE) 

38 (net FTE) 

1% 

Belgium 
VDAB 

Bulgaria 

Croatia 

Cyprus 

Estonia 

2 397 

1 322 

97 

481 

1 836 

250 

22 

73 

76 % 

18 % 

22% 

15 % 

23 % 

Germany 

approx. 95 600 

approx. 22 100* 

159  In  Ireland,  case  officers  are  not  employed  by  the  PES.  They  are  employed  to  deliver  activation  and  case  management 
services through Intreo centres and through the network of Departmental offices which are currently transitioning to a 
full Intreo service. Numbers of case workers working specifically with the LTU is not known.  

160  The  percentage  calculation  is  based  on  staff  servicing  LTU,  divided  by  total  staff,  multiplied  by  100.  The  percentage 
figure  for  Germany  is  based  on  the  number  of  counsellors,  as  a  figure  for  staff  directly  servicing  the  LTU  was  not 
provided.  

77 

 
 
 
 
 
                                                            
Country 

Total number of 
staff (FTE) 2014  

Staff directly 
servicing LTU  

% of total PES staff 
directly servicing 
LTU 

Lithuania 

Malta 

Romania 

1 441 

278 

2 142 

432 

16 

428 

29%** 

6% 

20% 

*Includes all employees in the fields market and integration in the joint facilities as well as some 50 % of the employee 
capacity of the organisational area “market and integration and granting of benefits without functional separation" 
** Percentage figure provided on the basis of total staff directly servicing LTU  
Source: European Network of PESA 

4.3. 

Activation design –labour market relevance of support  

There  is  increasing  evidence  showing  that  employers  actively  sort  out  the  long-term  unemployed 
when  reviewing  job  applications161.  The  relevance  of  interventions  to  the  demand  on  the  labour 
market and the direct involvement of employers in shaping the offers to the long-term unemployed are 
important factors determining their effectiveness. 

Beyond  adjusting  the  parameters  of  the  incentives  for  employers  (wage-  and  non-wage  subsidies), 
some  MS  are  introducing  novel  ways  of  ensuring  employer  buy-in.  France  uses  clauses  in  public 
procurement  contracts  to  stimulate  employers  to  hire  long-term  unemployed.  In  Bulgaria,  there  are 
legal  provisions  which  can  require  tenders  for  public  contracts  to  include  recruitment  of  long-term 
unemployed.  In  Denmark  or  the  Netherlands  similar  requirements  can  be  imposed  at  the  municipal 
level, including as a part of infrastructure development initiatives. 

Additional  bespoke  support  to  employers  is  being  adopted  in  preference  to  more  generalised 
approaches.  In  Belgium  the  PES  (VDAB)  has  recognised  this  with  an  increasing  emphasis  on 
competency  based  matching  to  assist  the  re-integration  of  LTU,  including  company  based 
individualised  tailored  training  programmes.  The  private  companies  contracted  to  provide  re-
integration  services  for  LTU  in  the  UK  also  use  personalised  trajectories.  In  the  Netherlands, 
employers are counselled for finding "hidden vacancies" and adjust the way they draft their vacancies; 
several social enterprises also use "job carving" techniques for indicating to employers the potential to 
hire persons from disadvantaged groups (e.g. low skilled or workers with disabilities).  

Several  PES  develop  post-placement  support  for  the  long-term  unemployed  who  are  re-employed, 
supporting  enterprises  with  additional  coaching  and  mentoring.  France  developed  after-care 
programmes  especially  targeted  at  SMEs  providing  post  recruitment  support.  This  reflects  an 
emphasis on capability and emphasising what an LTU client can do, rather than focussing on barriers.   
The Netherlands relies on self-regulation efforts on the part of employers, with the support of social 
partners:  A  tripartite  agreement  proposed  a  specific  target  to  increase  the  recruitment  of  vulnerable 
jobseekers with the prospect of government quotas and sanctions if this is not achieved.  

161 Kroft et al (2014); Eriksson and Rooth 2011; Ghayad 2013 

78 

 
 
 
 
 
                                                            
An  agreement  between  the  Employment  Ministry,  the  PES  and  the  employer  federation  in 
Luxembourg signed in 2015 foresees an increase by 5000 people of the number of recruitments from 
PES  clients  by  2018,  particularly  for  youth,  older  workers  and  long-term  unemployed.  The  PES 
committed to increasing the quality of recruitment services, to create new training schemes targeting 
specific  employer  needs  and  to  an  increase  in  the  index  of  client  satisfaction,  while  the  employers' 
federation committed to an awareness campaign on the benefits of recruitment through the PES. 

Estimates  of  the  numbers  of  case  handlers  providing  support  to  employers,  or  as  staff  directly 
servicing employers, are summarised in the table below.  

Table 5: Employer case handlers and staff directly servicing employers 2014/2015 

Total PES staff 

Number (FTE) 

Country 

2014 

Current total 
(March 2015) 

Case handlers 
providing 
support to 
employers 

Of which, directly 
servicing employers 
(FTE) 

Austria 

Belgium ACTIRIS 

5067 

889 

Belgium LE FOREM 

3593 

582.4 

157 

422 

133 

227 

Belgium VDAB 

3727 (net FTE) 

364.43 net FTE 

Bulgaria 

Croatia 

2397 

1322 

Czech Republic 

11130 

Estonia 

Germany 

Greece 

Latvia 

Lithuania 

Slovakia 

Slovenia 

UK 

3674 

950 

29324 

2397 

481 

95600 

3585 

815.6 

1441 

3278 

935 

29 

32 

5800 

143 

185 

431 

120 estimate 

1836 

29 

560 

32 

5800 

143 

185 

306 

81 

1234 

Note: IT, PT and SE do not use specialised employer counsellors, while in Slovakia the position of employer counsellor is currently being 
redesigned, so only an estimate of the number of such counsellors is available. 

79 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Source: European Network of Public Employment Services 

5. 

COSTS AND BENEFITS OF TRANSITIONS TO EMPLOYMENT 

Estimates  of  budgetary  gains  from  transitions  to  employment  were  re-calculated  based  on  in  EC 
(2014)  –  The  Cost  of  Poverty.  The  estimates  assume  that  if  someone  unemployed  moves  into 
employment,  the  household  in  which  they  live  loses  any  social  exclusion  benefits  and  housing 
allowances  that  they  were  receiving.  An  indication  is  given  in  the  last  column  of  the  tables  of  the 
relative  importance  of  these  benefits  and  in  some  cases  they  amount  to  over  half  of  the  overall 
reduction in benefits.  

As emphasised in the analysis in section 7.5. of the Staff Working Document (SWD), the estimated 
gains  are  subject  to  a  number  of  provisos,  as  they  do  not  take  into  account  any  substitution  effects 
between long-term and short-term unemployed. The different incidence of channels of job creation in 
the MS, which are a critical factor for achieving the budgetary gains calculated in the SWD, are not 
factored into the calculations either. 

80 

 
 
 
 
 
Table 6: Gains in tax receipts and benefit expenditure from transitions to employment 

Taxes only 

Taxes+Benefits 

Benefits 
only 

6,777 
45 
567 
11,717 
5,701 
288 
5,627 
458 
1,760 

Per-
capita 
gain 
by 
100% 
full-
time 
6,820 
191 
859 
na 
na 
1,065 
5,876 
1,915 
1,620 

Per 
capita 
gain 
by 
100% 
part-
time 
4,112 
87 
361 
na 
na 
279 
1,028 
555 
788 

Per 
capita 
gain 
by 
75% 
full-
time 
5,106 
143 
644 
na 
na 
794 
4,407 
1,432 
1,212 

Per 
capita 
gain 
by 
75% 
part-
time 
3,075 
65 
271 
na 
na 
205 
771 
412 
588 

Per 
capita 
gain 
by 
75% 
full-
time 

Per 
Per-
capita 
capita 
gain 
gain 
by 
by 
100% 
100% 
part-
full-
time 
time 
13,596  10,889  11,883 
131 
928 
na 
na 
567 
6,655 
1,013 
2,547 

236 
1,426 
na 
na 
1,354 
11,503 
2,373 
3,380 

188 
1,211 
na 
na 
1,083 
10,034 
1,890 
2,972 

Per 
capita 
gain 
by 
75% 
part-
time 
9,852 
110 
838 
na 
na 
493 
6,398 
869 
2,347 

5,312 

3,163 

1,823 

2,368 

1,364 

8,475 

7,136 

7,681 

6,676 

BE 
BG 
CZ 
DK 
DE 
EE 
IE 
EL 
ES 

FR 

HR 
IT 
CY 
LV 
LT 
LU 
HU 
MT 
NL 
AT 
PL 
PT 
RO 
SI 
SK 
FI 
SE 
UK 
EU13 
EU15 
EU28 
Source: EU-SILC, ESSPROS 2011 

176 
708 
880 
214 
344 
5,818 
525 
1,843 
9,106 
4,596 
172 
903 
89 
1,418 
518 
6,988 
5,259 
3,490 
232 
2,393 
1,805 

1,093 
3,515 
31 
741 
560 
4,774 
na 
na 
na 
6,017 
891 
1,321 
475 
2,915 
na 
na 
4,183 
na 
755 
2,871 
2,296 

549 
1,409 
1 
217 
247 
2,597 
na 
na 
na 
2,731 
528 
371 
197 
1,320 
na 
na 
2,095 
na 
375 
1,335 
1,074 

820 
2,623 
23 
556 
420 
3,470 
na 
na 
na 
4,508 
664 
991 
355 
2,169 
na 
na 
2,941 
na 
565 
2,144 
1,714 

412 
1,044 
1 
162 
185 
1,837 
na 
na 
na 
2,043 
392 
278 
147 
972 
na 
na 
1,375 
na 
279 
992 
798 

1,270 
4,223 
911 
955 
903 
10,592 
na 
na 
na 
10,613 
1,063 
2,224 
563 
4,333 
na 
na 
9,442 
na 
988 
5,264 
4,101 

725 
2,117 
881 
431 
591 
8,415 
na 
na 
na 
7,327 
700 
1,273 
286 
2,738 
na 
na 
7,354 
na 
607 
3,728 
2,879 

996 
3,332 
903 
769 
764 
9,288 
na 
na 
na 
9,104 
837 
1,894 
444 
3,587 
na 
na 
8,200 
na 
797 
4,537 
3,520 

588 
1,752 
881 
376 
529 
7,655 
na 
na 
na 
6,640 
565 
1,181 
236 
2,390 
na 
na 
6,634 
na 
512 
3,385 
2,604 

% of social 
exclusion 
benefits+ 
housing 
allowances in 
total benefits 

9.4 
20.0 
54.6 
4.6 
42.1 
41.1 
5.3 
4.1 
11.5 

61.8 

37.7 
12.0 
36.5 
45.3 
79.8 
51.2 
17.8 
18.1 
82.2 
17.9 
42.7 
39.7 
44.6 
67.1 
64.2 
34.6 
50.5 
65.7 
52.0 
34.2 
34.8 

Among the estimates presented in Table 6 above, the more conservative scenario of return to full-time 
employment with 75% of average wage was used in the SWD analysis. The per-capita gains for the 
public  budget  of  exits  from  unemployment  to  full  time  employment,  with    75%    of  average  wage 

81 

 
 
 
 
 
amount on average to 3 520 Euro, composed of 1805 euro of benefit savings and 1714 euro gains in 
tax receipts.  The choice of exits with 75% of average wages takes into account the well-established 
scarring  effect  of  long  periods  of  unemployment,  which  diminish  overall  lifetime  earnings.  To 
estimate budgetary gains, we have further multiplied the average budgetary gains with the estimated 
additional transition rates to employment presented on in Table 12 of the Staff Working Document. 
Additional transition rates were calculated for each country, and vary from below 3 percentage points 
in HU, CY,  PT, CZ to 11 percentage points in EL, HR, with an  average of 6  additional  percentage 
points. Such additional transitions are fully in line with evidence from prior reforms or programme in 
the  MS,  which  often  achieved  increases  in  transition  rates  above  10-15  percentage  points.  The 
additional  transition  rates  were  applied  to  the  LTU  group  targeted  to  obtain  an  estimate  of  the 
additional stock which would transition to employment.  

To calculate the costs for the introduction of the JIAs, we have taken the maximum estimates from the 
ICON 2015 study (300 euro/beneficiary) and applied it to the total population covered.  

It  is  important  to  note  the  costs  of  additional  service  and  ALMPs  provision  following  JIAs  are  not 
included in the analysis Table 15 of the SWD. While the LMP database has reliable estimates of the 
costs  of  ALMPs  which  can  be  broken  down  by  LTU/non  LTU  participants,  there  is  no  such 
corresponding  data  for  employment  services.  However,  it  should  be  assumed  that  most  increases  in 
support are channelled through employment services. From existing data in 11 countries in the LMP 
database,  the  cost  of  services  appears  to  be  at  approximately  three  times  lower  than  the  cost  of 
ALMPs. However, lack of available estimate of the per-capita cost of employment service provision, 
as well as the difficulty to predict the mix of measures and services allocated to the LTU through the 
Job integration agreements lead to inclusion of only initial costs of setting up JIAs in Table 15 of the 
Staff Working Document.  

The  table  below  estimates  on  the  basis  of  available  data  in  the  LMP  database  the  per-capita 
expenditure for ALMP measures for long-term unemployed. 

Table 7: Per capita expenditure on ALMPs (Cat 2-7) for adult long-term unemployed 

2008 

2009 

2010 

2011 

2012 

EU 

7,001 

7,616 

7,763 

6,581 

6,290 

BE 

6,694 

6,632 

6,522 

3,954 

5,003 

BG 

1,029 

1,761 

1,296 

2,392 

3,108 

CZ 

3,860 

5,181 

7,107 

9,732 

2,666 

DK  12,668  12,881  15,033  18,186  19,817 

DE 

8,885 

9,896 

8,707 

9,121 

9,433 

EE 

: 

: 

: 

3,368 

3,730 

IE 

13,744  12,408  42,116  13,865  30,393 

EL 

3,930 

2,037 

2,037 

: 

: 

82 

 
 
 
 
ES 

: 

: 

: 

3,587 

2,389 

FR 

8,905 

8,897 

10,071 

8,324 

7,774 

HR 

: 

: 

: 

4,008 

6,278 

IT 

3,722 

3,746 

3,459 

3,353 

3,724 

CY  18,509 

: 

: 

: 

: 

LV 

2,981 

3,624 

2,839 

2,402 

2,873 

LT 

3,155 

3,153 

2,668 

2,994 

3,031 

LU 

9,301 

13,067  13,519  14,461  19,762 

HU 

: 

2,722 

3,484 

2,297 

1,126 

MT 

2,625 

618 

934 

1,157 

1,744 

NL  16,823  16,783  18,171  17,922  17,270 

AT 

7,360 

8,070 

7,297 

7,281 

7,027 

PL 

: 

: 

: 

: 

: 

PT 

3,248 

4,395 

3,877 

2,913 

2,434 

RO 

1,353 

1,012 

1,004 

639 

1,027 

SI 

5,065 

5,395 

5,643 

4,735 

5,477 

SK 

756 

836 

588 

1,665 

1,745 

FI 

12,631  12,999  13,173  13,191  13,742 

SE 

12,583  11,341  13,598  14,948  16,591 

UK 

6,591 

11,198 

: 

: 

: 

Source: EU-SILC, ESSPROS 2011 

In  contrast  to  the  richer  information  available  on  ALMPs,  the  available  data  makes  it  technically 
possible to estimate unit costs for LMP services and to compare these to unit costs of LMP measures. 
However, it should be clear that the data on services are not only incomplete but may also be subject 
to vagaries of reporting that result in a mismatch of expenditure and participants at intervention level, 
which  makes  them  potentially  unreliable.  A  detailed  examination  of  the  data  intervention  by 
intervention would be necessary to develop more reliable cost estimates. 

Bearing in mind the above warning about data quality, the available data indicate that the unit cost of 
LMP  services  (2,408  Euro/p-y)  is  less  than  half  that  of  LMP  measures  (5,758  Euro/p-y).  Services 
appear to be significantly cheaper than measures in most of the 11 countries for which a comparison is 
possible. In many ways this is to be expected because in general service costs do not include any form 
of income support for participants who (since the unemployment spell is not broken) would normally 
continue  to  receive  their  existing  unemployment  or  other  benefit.  In  contrast,  participants  in  LMP 

83 

 
 
 
measures  will  often  receive  some  other  form  of  income  support  (e.g.  a  training  allowance)  that  is 
included  in  the  costs.  Employment  incentive  measures  are  generally  an  exception  here  since  the 
participants normally receive a wage from the employer. 

84