Labour Market Report

Transcription

Labour Market Report
2011
Text: Anna Andersson, Fredrik Jansson Dahlén Coordinator:
Mohammad Taslimi Project Participants: Rolf Adolfsson, Christer
Gerdes, Ann-Christin Jans, Fredrik Johansson Tormod, Petra Nilsson, Jan Norberg, Eleni Savvidou, Lena Stoltz, Johnny Zetterberg
Text and Image Editing: Heléne Bergman
Page: 3 of 130
Labour Market Report 2011
Ref no. AF-2010/436389
Date: 01/06/2011
Feedback report in accordance with the letter of regulation for 2011,
In accordance with the appropriation warrant for 2011,
Arbetsförmedlingen, shall no later than 1 June 2011 submit a Labour
Market Report, containing a collected account and analysis of what the
authority is doing to improve the functioning of the labour market, how the
authority fulfils its tasks in accordance with its instructions and the cost
efficiency of its operations. The report shall be submitted to the Government
Offices of Sweden (Ministry of Employment), the Institute for Labour
Market Policy Evaluation (IFAU) and the Swedish Unemployment
Insurance Board (IAF).
The Labour Market Report is the authority's feedback report to the
Government. Over and above this, the analysis is intended to contribute to
the policy conclusions of the management and the board. The report is also
intended to be used at employment offices in order to create a recognition of
how the work on a local level improves the labour market's efficiency.
The 2011 report is structured as follows. Chapter one describes the
commission. Chapter two describes the work of Arbetsförmedlingen from
three different perspectives, target groups, actions and mode of delivery. The
analysis in chapter three aims to describe the functioning of the labour
market and the difference the labour market policy can make. The
conclusion, in chapter four, contains a summary of existing research of
effects and a summary of the need for further knowledge.
Decisions in this matter have been made by Director-General Angeles
Bermudez-Svankvist. The matter has been presented by Fredrik Jansson
Dahlén. In the final administration, the Head of the Analysis Department
Clas Olsson, Deputy Director-General Lena Liljebäck and the Head of the
Director-General's Office Jan-Olof Dahlgren have been involved.
Angeles Bermudez-Svankvist
Fredrik Jansson Dahlén
Page: 4 of 130
Contents
Summary ...................................................................................... 5
1. The commission of Arbetsförmedlingen.................................... 9
2. The work of Arbetsförmedlingen ............................................ 14
2.1 Three different perspectives ....................................................................... 15
2.2 Target groups .............................................................................................. 16
2.3 Initiatives and Commissions ......................................................................25
2.4 Special assignments ....................................................................................34
2.5 Mode of delivery ..........................................................................................43
2.6 Discussion ...................................................................................................52
3. Functioning of the labour market ........................................... 55
3.1 The matching model .................................................................................... 55
3.2 Information in the matching process. ....................................................... 67
3.3 Summary ..................................................................................................... 71
4. The results of labour market policy ........................................ 72
4.1 Functioning of the labour market: indicators ............................................ 73
4.2 Measures for our target groups ................................................................. 80
4.3 Improved matching ................................................................................... 92
4.4 Cost efficiency ........................................................................................... 107
4.5 Modes of delivery ...................................................................................... 110
4.6 Effects of special assignments .................................................................. 113
4.7 Further need for knowledge ..................................................................... 118
References ................................................................................ 120
Explanation of terms ................................................................. 125
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Summary
Arbetsförmedlingen has undergone great changes in a short period of time.
The former Arbetsmarknadsverket (National Labour Market Administration)
which consisted of Arbetsmarknadsstyrelsen (National Labour Market
Board) as governing authority and Länsarbetsnämnder (County Labour
Boards) - together with employment offices - as individual county authorities
were in 2008 reorganized as one united authority - Arbetsförmedlingen (the
Swedish Public Employment Service). Primarily during 2008 – 2010, new
and extended commissions were added. Parallel to these changes, 2009 and
2010 were characterized by great efforts to mitigate the effects of the
financial crisis which impacted the labour market in autumn 2008.
2008 saw the introduction of private providers which are procured suppliers
for a number of services of Arbetsförmedlingen. The Arbetsmarknadspaketet
(the Labour Market Package) was launched in spring 2009, which entailed
reinforced resources within the labour market policy due to the financial
crisis. Here, the labour market policy's main focus moved from performing
special actions for individuals in long-term unemployment towards
performing more actions early in the individual's unemployment. The
Labour Market Package included procurement of job coach services
equivalent to 27,500 places, Work experience placements outside guarantees
equivalent to 9,500 places, Practical competence development equivalent to
9,500 places and another 4,700 new places in New start jobs with doubled
reduction of the employer's contribution. The Government proposition
submitted in autumn 2009 introduced yet another programme, Lyft (Lift)
which began putting participants in employment in 2010. During 2010, the
commission has expanded further within the areas of rehabilitation and
integration. All in all, these constitute rather large changes to
Arbetsförmedlingen´s organization and target groups. The programmes and
actions which Arbetsförmedlingen has had access to have varied, as has the
prioritization of the different groups of unemployed. The ability of
Arbetsförmedlingen to adapt is and has been important in managing the
implementation of the labour market policy.
To accomplish its commission in an efficient manner, Arbetsförmedlingen
must integrate the mediation role, the information role, administration of
labour market policy actions and the commission within the unemployment
insurance. It is important to put the customer in focus, with the goal of
returning to employment. In the light of such considerations, the report
presents a number of conclusions.
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The jobseeking activity is maintained at a constant level, both in terms of
time spent and the number of jobs applied for. Compared to the situation in
the mid-2000s, the scope has increased.
Programme actions are focused on persons with a more difficult position on
the labour market. This also applies to cases in which actions are
implemented at an early stage of the unemployment. Through subsidised
employment, the differences in job opportunities have been compressed so
that the contrast between the different groups of jobseekers has been
reduced.
Measurements of programme efficiency provide the conclusion that the
individual recruitment incentive is the most effective action for finding
employment for jobseekers. The second most effective action has been
employment training, if we disregard years of weak economic development
and finally work experience placements which have on average had a positive
if modest effect.
Studies reveal positive effects from intensified mediation efforts for the longterm unemployed. Consultation with employment officers also seems to have
brought about positive effects. In some cases cost and revenue estimates
have been made, and such actions have proved to be cost effective in the
majority of these. If we look at mediation actions for the short-term
unemployed, a general conclusion can be discerned among international
studies that placement efforts can increase employment, perhaps particularly
when combined with monitoring.
There is currently no generally accepted definition of the optimal extent of
the monitoring actions of Arbetsförmedlingen in the commission within the
unemployment insurance. The existing process measurements indicate that
Arbetsförmedlingen adheres to the instructions available for the work. It is
working intensively with the provision of information on the unemployment
insurance with benefits and the establishment of action plans for jobseekers.
The level of notification is however low, according to the assessment of the
Swedish Unemployment Insurance Board. Furthermore, the Swedish
Unemployment Insurance Board believes there are a large amont of
unregistered events, where the employment officer should have, but did not,
act on jobseekers that did not meet the requirements for benefits.
Development work is under way within Arbetsförmedlingen with the
objective to ensure that the administration of notifications meets the
requirements set by the regulatory framework.
The matchning indicator of Arbetsförmedlingen indicator gives the
impression that 2009 and the first half of 2010 were difficult years for
matching on the labour market. Even though a large part of the indicators
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report generally good results from actions, the collected matching efficiency
has been lower than expected.
Besides efficiency aspects, the ability of Arbetsförmedlingen to impact the
employment policy is influenced by the confidence its employers, its
customers and society as a whole have in the authority. In the last few years,
Arbetsförmedlingen has been trusted to develop the Government's
employment policy in several dimensions. The introduction activities for
newly arrived immigrants, private providers with the employment service
operations and the Work life Introduction for people who have come back
from sick leave are examples of such commissions. This type of trust is built
by constantly adapting the operations to changing requirements, in a
professional manner.
The possibility of influencing the employment policy could potentially
increase if Arbetsförmedlingen had greater freedom to prioritize actions to
selected unemployed in an early stage of unemployment. Access to profiling
instruments presents a way of identifying needs. In order to provide these
persons with early actions, parts of the regulation on the current guarantees
must be changed as it takes place on an individual basis. A similar
management in detail, which could potentially complicate the adaptation of
the operations to the current labour market needs, is implemented in
connection with the procurement of private providers. The better
Arbetsförmedlingen becomes in delivering a cost-effective and accurate
service, the less the need for managing in detail the extent of various
services, which in the long-term leads to increased benefit for our customers.
As the operations constantly strive to accomplish the tasks in the most costeffective way with the most suitable supplier, the possibility of gaining this
trust also increases.
The trust among customers will be the deciding factor for how
Arbetsförmedlingen is perceived as a service authority. There are no
universal measurements for customer benefit, but one way of measuring is
whether the jobseekers or the employers feel they have received the support
or the actions they need from Arbetsförmedlingen. Of the jobseekers who
gained employment during 2010, approximately 60 per cent state that that is
the case. This is a higher percentage than the previous year. 20 per cent state
that they did not receive the help or support from the Employment Service
that they needed. A very large part of the employers who use
Arbetsförmedlingen also state that they are happy with the service that they
have received. The proportion is around 85-90 per cent and has been
relatively stable for many years but varies with economic change. During
2010 the competition for jobseekers has increased and employers have found
it more difficult to recruit. This is also reflected in the decreased share of
Page: 8 of 130
employers who have received sufficient applicants, though the percentage of
satisfied employers is still high.
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1 The commission of
Arbetsförmedlingen
Arbetsförmedlingen is responsible for the public Employment Service and its
labour market policy activities. The commission of Arbetsförmedlingen
comes from the Riksdag (the Swedish Parliament) and the Government and
is detailed in the instructions for Arbetsförmedlingen. The commission is
supplemented annually in the letter of regulation. The overall objective for
Arbetsförmedlingen is to work on the improvement of the functioning of the
labour market. This could be achieved by:



efficiently bringing together jobseekers and employers looking for
labour
prioritizing those who are far removed from the labour market
contributing to a constant, long-term increase in employment
The commission of efficiently bringing together jobseekers and employers
looking for labour is a basic task and has been paramount to
Arbetsförmedlingen since its establishment in the early 20th century. The
public service's resources shall primarily be aimed at areas where the market
is not functioning satisfactorily. This applies to the perspective of the
jobseeker, the recruiter and society.
The task of prioritizing those who are far removed from the labour market is
largely concerned with the way in which Arbetsförmedlingen fulfils the task
of bringing together jobseekers and employers looking for labour. The
commission has existed in various forms since the 1960s and was first
defined in the Labour Market Notice 1966:368. It reflects a clear political
ambition and volition within the labour market policy, intended to help
make jobseekers that are far removed from the labour market more
attractive for the employers. The actions must be adapted to the
prerequisites of the individual and simultaneously connected to the demand
on the labour market. The commission includes increasing diversity and
counteracting discrimination in working life. The methods, services and
programmes used to fulfil the commission are designed to create a demand
on the labour market which does not arise without this support.
The commission of contributing to a constant long-term increase in
employment came in at a much later date than the other two and was written
into the ordinance in 2007. It should be seen as another reinforcement of the
political ambition which exists when it comes to labour market policy. It
shall help to increase social inclusion by equipping the individual. The most
important contribution is the actions taken to improve matching and remove
the element of exclusion. Somewhat simplified, this means that successful
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work on the first two commissions contributes to fulfilment of the third
commission.
In its matching assignment Arbetsförmedlingen works on a market where
the majority of vacancies are filled through channels other than the
Employment Service. The matching functions are also continuously
developing. For a long time vacancies were announced via notice boards,
which produced a limited geographical distribution. Later on, vacancies were
announced in vacancy journals. Tools for making vacancies visible through
various self-service instruments were developed in the 1980s, and during the
second half of the 1990s, vacancies started to be publicized on the internet.
Up until the 21st century however, technical development in information
systems has been one-sided. The information has primarily gone in one
direction and the possibility of employers finding people has been limited.
This is probably the main reason for informal contacts being such a
dominant channel of information. Conditions have changed during the
2000s thanks to access to jobseeker databases where employers can conduct
a direct search for people based on the qualification requirements of the
position. Consequently, both jobseekers and vacancies are now available via
internet search engines at all times. A development such as this places
different demands on the matching process. The report will discuss some of
the expected effects of the matching and how the labour market policy can
best prepare for these.
The development towards an increasingly computer-based and modernized
Arbetsförmedlingen enables many services to be provided directly to the
home. Does the increased labour market transparency resulting from this
constitute a reduced demand for local employment offices and personal
service from employment officers? As with all technical development, we
should expect some substitution effects. Personnel-intensive tasks can in
some cases be replaced with other systems. The idea of extensive reduction
of the operations as a result of new matching functions is however not
feasible. The reason for this is that the collected commission handed to
Arbetsförmedlingen by society is too complex to be reduced to search
functions on the internet. The labour market policy commission includes
assignments within the scope of the unemployment insurance, actions for
people who lack competence within the professions which are in demand on
the labour market, the introduction activities for newly arrived, advice for
employers and jobseekers, the Work life Introduction for people who have
come back from sick leave, rehabilitation to work, individual recruitment
incentives for persons with lower productivity on the labour market,
coaching of jobseekers, actions which guarantee a constantly high level of
jobseeking activity, etc. These are basic tasks which help employers to meet
as many qualified and active jobseekers as possible and which also help those
who are far removed from the labour market to be more attractive to
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employers. The commission can naturally be delegated but these functions
will likely need to remain in some form.
The operations of Arbetsförmedlingen therefore cannot be reduced to
internet-based search engines. Consultation will remain an important
element. Consultation with individual jobseekers does however have
potential for development. This can be done through the use of social media
such as Facebook, through text messaging, through interactive e-services
with remote offices, and through customer services conducted via telephone,
e-mail and the Internet. Access to databases of jobseekers and employers
also gives rise to the possibility for development of profiling instruments
which can more clearly indicate which jobseekers will have the most
difficulty in finding work and thereby risk long-term unemployment. This
facilitates more accurate targeting of people with the most difficulties on the
labour market for measures, and significantly earlier than was previously
possible.
The introduction of the system of choice and procurement of private
providers which provide part of the mediation operations has also led to
other forms of development of employment service operations.
Supplementing the authority's provision with procured external providers
has produced new working methods and jobseekers have received greater
freedom in their choice of who is to provide the assistance. Accordingly,
there are better conditions for renewal and more effective use of resources. A
challenge for the authority in the coming year will be how to best take
advantage of the opportunities which this provides. Most notably, the
development of effective compensation models which produce the desired
results from the private providers' actions will be central, as will the
monitoring of the results of various private providers' work.
As with many other authorities and companies Arbetsförmedlingen provides
many of its services via the internet. The services fall under one of two types
and are provided via the web portal, ”arbetsformedlingen.se”. The first type
constitutes individual services such as searching for information on the
services offered by Arbetsförmedlingen, and the possibility to handle
individual matters. The other type involves a job bank and jobseeker bank
through which Arbetsförmedlingen offers an infrastructure to support jobmatching on the labour market. Information is by nature a collective, though
it is easily limited if it can be bought and sold on a market. Socio-economic
gains can therefore be made through providing a cost-free infrastructure for
dissemination of information in the recruiting process. The report separates
these two tasks as they are essentially of different types.
The fact that Arbetsförmedlingen has a public commission calls for the
operations to be designed for efficient, uniform and legally secure running.
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The organization shall offer a service which is consistent throughout the
country, whilst taking into consideration the various conditions and
requirements of different customers and regions. Effective matching on the
labour market requires geographical and professional flexibility among
jobseekers, as well as adaptation to the individual's situation. In addition, the
measures taken must not distort conditions for competitiveness on the
labour market or lead to job openings being pushed aside, unless motivated
by labour market policy. The assignment also includes increasing diversity
and counteracting discrimination in working life. So that society can
continue to offer a generous unemployment benefit, Arbetsförmedlingen has
also been assigned the task of ensuring that the unemployment benefit works
as an adjustment benefit. Completing these assignments is particularly
challenging, and the operations are developing towards an increased
diversity of suppliers.
For Arbetsförmedlingen, the following can be considered key issues.1
Arbetsförmedlingen must be prepared to continuously change and adapt its
service in line with the development of the labour market and society, whilst
at the same time finding a balance between change and stability.
Arbetsförmedlingen must also identify itself in its role as a Government
instrument, earn the trust fitting of an authority and thereby influence
employment policies. Furthermore, Arbetsförmedlingen must wherever
possible integrate the roles of agent and information provider as well as the
administration of labour market policy measures and the commission within
unemployment insurance. Arbetsförmedlingen must therein strive for closer
cooperation with a broad spectrum of parties and, where possible, take a
leading role. Finally, Arbetsförmedlingen must also become a service
company which presents an attractive prospect to employers and which
constantly seeks perfection in quality and efficiency.
The authority's commission spans a large area. In its endeavour to carry out
its commissions in the best way possible, there is an obvious interest in
analyzing, monitoring and evaluating how the operations and the labour
market policy measures influence the way in which the labour market
functions. This task can be performed more coherently through the Labour
Market Report. In addition, the authority has an interest in making
assessments of the labour market situation in order to provide the basis for
decisions for the future labour market policy. With this in mind, forecasting
activities are conducted and the report Arbetsmarknadsutsikterna (Labour
Market Prospects) is presented twice yearly. In order to achieve a high level
of screening of the operations, Arbetsförmedlingen also assists authorities
and others who conduct monitoring and evaluation within its sphere of
activity.
1
Phan et al. (2001)
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The Labour Market Report is a feedback report to the Government. Over and
above this, the analysis is intended to provide the management and the
board with a basis for decisions. The report is also intended for use in
employment services in order to improve understanding of how the work
improves the way the labour market functions on a local level. The 2011
report is structured as follows. Chapter two gives a broad description of the
work of Arbetsförmedlingen. This is done from three different perspectives;
target groups, actions and mode of delivery. The analysis in chapter three is
used to describe the way in which the labour market functions and the effect
that labour market policy has depending on the labour market situation we
are faced with. In the final section, chapter four, a summary of the research
on the effects of the operations is presented. The section also contains a
summary of the need for more knowledge relevant to the operations.
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2 The work of Arbetsförmedlingen
Arbetsförmedlingen has undergone great changes in a short period of time.
The former Arbetsmarknadsverket (Employment Service) which consisted of
Arbetsmarknadsstyrelsen (the Employment Service Board) as governing
authority and länsarbetsnämnder (County Employment Boards), together
with employment offices, as individual county authorities were in 2008
reorganized as one united authority - Arbetsförmedlingen. Primarily during
2008 – 2010, new and extended commissions were added. Parallel to these
changes, 2009 and 2010 were characterized by great efforts to mitigate the
effects of the financial crisis which impacted the labour market in autumn
2008.
Prior to the financial crisis, the Government's policy for full employment
focused on efficient matching and healthy competitiveness among those
furthest away from the labour market. The labour market programmes were
given a clearer direction towards increasing jobseeking activity and
supporting those furthest away from the labour market. The point of
departure for the Government was that this principle for the policy would be
preserved, even in face of a deep recession, with the support of research
which shows that mediation actions were a relatively effective measure for
reducing unemployment and that wage-subsidized employment increased
the likelihood of gaining employment to a higher degree than employment
training.
It was therefore important to stimulate jobseeking activity among
unemployed individuals in a situation where there was a temporary increase
in labour market policy measures, whilst it was also still important to
improve competitiveness among those furthest away from the labour market.
During 2008 private providers which are procured suppliers for a number of
the services of Arbetsförmedlingen were introduced as part of this.
From the plan for 2009 it was clear that the possibilities for measures over
and above the Job and Development Programme and the Youth Job
Programme were limited. In order to provide further opportunity for
implementing measures for persons who became unemployed as a result of
the rapid deterioration of the labour market, Arbetsförmedlingen received
more resources at the beginning of 2009, which were then expanded further
in the spring. Over the space of a few months, the conditions for various
programme initiatives changed. The authority went from working almost
exclusively with guarantee participants to a situation in which special
measures must be implemented in order to expand the work, change
prioritizations and develop effective interaction with jobseekers with a
shorter registration period.
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The measures proposed by the Government were implemented in spring
2009 under the name Arbetsmarknadspaketet (The Labour Market
Package). In this package, the labour market policy's main focus moved from
exclusively performing special actions for the long-term unemployed
towards more actions early on in the individual's unemployment. The
package included procurement of job coach services equivalent to 27,500
places, Work experience placements outside the guarantees equivalent to
9,500 places, Practical competence development equivalent to 9,500 places
and another 4,700 new places in New start jobs with doubled reduction of
the employer's contribution. The Government proposition submitted in
autumn 2009 introduced yet another programme, Lyft (Lift) 2 which began
putting participants in employment in 2010.
During 2010, the commission has expanded further within the areas of
rehabilitation and integration. All in all, these constitute rather large changes
to the organization of Arbetsförmedlingen and target groups. The
programmes and actions which of Arbetsförmedlingen has had access to
have varied, as has the prioritization of the different groups of unemployed.
Arbetsförmedlingen´s ability to adapt is and has been important in
managing the implementation of labour market policy.
This chapter reviews the operations of Arbetsförmedlingen operations in
2010. The instruments at the disposal of Arbetsförmedlingen for matching
jobseekers with employers are also briefly detailed.
2.1 Three different perspectives
In order to provide a general picture of the operations, they are described
below using three different methods of categorization.
The first perspective is based on the target groups for the labour market
policy measures. The target groups of Arbetsförmedlingen groups can be
divided into employers and jobseekers. The groups can be further divided.
2010 has also seen the rise of new jobseeker groups, such as people who have
returned from sick leave and are participating in Work life Introduction, and
newly arrived immigrants within the introduction activities.
The second perspective is based on Arbetsförmedlingen´s various
assignments and the measures available for the implementation of the
assignment. The measures can be divided into services for jobseekers and
services for employers. A number of methods and programmes are available
within the services. In addition to the fundamental assignment to improve
Lyft is a programme on the labour market in which the participants devote 25 per cent of the
time to jobseeking.
2
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matching on the labour market, Arbetsförmedlingen has a sectorial
responsibility for: matters relating to disability within labour market policy
and specific assignments for checking that jobseekers meet the requirements
of the unemployment insurance (monitoring function), looking after newly
arrived immigrants (introduction activities) and looking after individuals on
sick leave who have invoked their right to additional compensation from the
Swedish Social Insurance Agency (Försäkringskassan) (Work life
Introduction). The latter two responsibilities came about in 2010. The new
assignments have meant that the composition of the jobseeker group has
changed and thereby also belong to the 'target groups' perspective.
The third perspective is based on the manner in which the service is
provided. The method of provision is grouped according to the local
employment service, private providers, customer services and
Arbetsförmedlingen Online.
Three perspectives on operations of Arbetsförmedlingen
 Target groups
o Employers
o Jobseekers
 Measures/Assignments
o Services for jobseekers
o Services for employers
o Methods
o Programmes
o Assignments
 Mode of delivery
o Local employment service
o Private providers
o Customer services
o Employment Service Online
In order to describe the work of Arbetsförmedlingen and get a sense of the
changes over time, these three perspectives are handled individually. In the
following, we shall describe these perspectives and attempt to quantify them.
We shall not attempt to measure the efficiency based on the different
perspectives; we shall instead return to these matters in chapter four.
2.2 Target groups
The customers of Arbetsförmedlingen consist of jobseekers and employers.
In order to meet the demand from both groups, Arbetsförmedlingen has
access to a number of different services for each individual target group.
Below is a description of how Arbetsförmedlingen works with the respective
groups, as well as statistics which create a picture that reflects the scope of
the services.
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2.2.1 Employers
Good employer contacts are a prerequisite for the accomplishment of the
authority's assignments, which is why it is important that
Arbetsförmedlingen is well trusted among employers. Focus on the work
with employers has intensified in recent years, and the unit of measurement
for the scope of these contacts has been applied and developed successively.
Table 2.1 shows some measurements for work and employers. Both the
number of vacancies and the number of active employers (that is, employers
who have registered vacancies with Arbetsförmedlingen) recorded in 2009
were higher in 2010, which reflects an increase in the demand for labour.
Arbetsförmedlingen´s market share of the vacancies has also increased. The
market share has proven to be variable in a positive direction with the
business cycle as the employers tend to notify Arbetsförmedlingen of
vacancies to a larger extent when the demand for labour is high. 3 The
increased demand for labour is also reflected in the increase in the number
of filled work experience placements, individual recruitment incentives and
New start jobs during 2010 when compared with the previous year.
Table 2.1 Key ratios for employers
2009
Antal anmälda platser
2010
409,100
551,000
Antal aktiva* arbetsgivare
53,200
65,400
Marknadsandel platser
31%
Registrerade** arbetsgivare i Platsbanken
34%
101,400
Tillsatta praktikplatser
47,700
75,100
Tillsatta anställningsstöd
30,200
35,400
Tillsatta nystartsjobb
23,700
44,500
*Active employer means that the person in question has advertised a vacancy via
Arbetsförmedlingen.
**A registered employer in the Job Bank has a personal account where he or she can for
example administer job advertisements. No information for 2009. Individual recruitment
incentives include step-in jobs and special recruitment incentives. New start jobs also include
Special new start jobs.
Source: Arbetsförmedlingen
Recruitment and vacancies
Many employers use Arbetsförmedlingen as their recruitment channel. At
Arbetsförmedlingen Online, there were 101,400 employers registered in the
beginning of 2011 and during 2010, 65,400 different employers notified
Arbetsförmedlingen of at least one vacancy. Of the vacancies available on the
3
Labour Market Report 2009:2
Page: 18 of 130
labour market during 2010, 551,000 were advertised with
Arbetsförmedlingen (Diagram 2.1). This constitutes 34 per cent of all
recruitments conducted during that year.4 The inflow of vacancies to
Arbetsförmedlingen varies over the year and is normally higher during the
first quarter.
Diagram 2.1 Number of newly registered vacancies to Arbetsförmedlingen.
Total, permanent employment and fixed-term employment per quarter 1992 Q 1
– 2010 Q 4
Tot new vacancies
Amount
Permanent
Fixed-term
250 000
200 000
150 000
100 000
50 000
1
20
10
Q
1
20
08
Q
1
20
06
Q
1
20
04
Q
1
20
02
Q
1
20
00
Q
1
98
Q
1
19
19
96
Q
1
Q
94
19
19
92
Q
1
0
A vacancy registered with Arbetsförmedlingen can be handled in several
different manners but the majority are publicized in the Job Bank.
Advertising via Arbetsförmedlingen normally has a noticeable effect for
many applicants. It is the employer who decides how the vacancy is to be
publicized and in some cases an employer can make the assessment that the
administration costs associated with receiving too many applications are too
high, and other search channels could therefore be an option.
Arbetsförmedlingen may also limit publication and instead offer the
employer a selection of suitable candidates.
Another recruitment channel is the 'recruitment meetings' (careers fairs)
which Arbetsförmedlingen conducts in many different locations. The
purpose of the meetings is to create yet another opportunity for employers
and jobseekers to meet.
Upon commission from Arbetsförmedlingen, Statistics Sweden produced information on new
hires for the entire labour market. Arbetsförmedlingen´s market share is calculated by
comparing the vacancies registered with Arbetsförmedlingen to the total number of new hires on
the labour market.
4
Page: 19 of 130
Redundancy notices
The commission of Arbetsförmedlingen includes accepting redundancy
notices of coming staff cutbacks. The section of employees affected by the
redundancy notices reported to Arbetsförmedlingen varies in line with the
development of the business cycle. In connection with the international
financial crisis during autumn 2008, the number of redundancy notices
increased considerably. During 2008, there were notices of redundancies
which affected around 95,000 employees. The numbers affected increased
further in 2009 with more than 115,000 included in the notices of
redundancies reported to Arbetsförmedlingen. Thereafter, the notifications
of redundancies have decreased and returned to more normal levels. During
2010, there were notices of redundancies which affected 44,500 employees.
Diagram 2.2 The number of employees included in redundancy notices,
numbers per month, 1975-2010
Amount
25 000
20 000
15 000
10 000
5 000
-0
7
-0
5
-0
3
-0
1
-9
9
-9
7
-9
5
-9
3
-9
1
-8
9
-8
7
-8
5
-8
3
-8
1
-7
9
-7
7
-0
9
ja
n
ja
n
ja
n
ja
n
ja
n
ja
n
ja
n
ja
n
ja
n
ja
n
ja
n
ja
n
ja
n
ja
n
ja
n
ja
n
ja
n
ja
n
-7
5
0
Source: Arbetsförmedllingen
Far from all redundancy notices reported to Arbetsförmedlingen result in
redundancies and even fewer in unemployment, see table 2.2.5 As a rule,
negotiations between employers and local union representatives commence
once Arbetsförmedlingen has been notified. The aim of these negotiations is
to agree on which employees to make redundant and when the redundancies
are to be effected. When the negotiations are concluded, the employer shall
inform Arbetsförmedlingen of which employees are to be made redundant
and when the redundancies are to be effected. The negotiations between
employers and local union representatives often lead to a reduction in the
number of redundancies. From the information received by
Arbetsförmedlingen it is evident that of the redundancies notified to
5
See Jans (2009)
Page: 20 of 130
Arbetsförmedlingen during 2008 and 2009, approximately 60 per cent
(59,800 during 2009 and 71,800 during 2009) ended in redundancies. It is
also important to remember that not all redundancies lead to
unemployment. Of those being made redundant, many go on to new jobs,
start studying or leave the labour market for other reasons. Of those who
were made redundant during 2008 and 2009, 32,800 and 32,700
respectively (approximately 30 per cent) were registered as jobseekers at
Arbetsförmedlingen within 9 months.
Table 2.2 The number of individuals included in redundancy notices, the
number made redundant and the number found in Arbetsförmedlingen within
six and nine months respectively
Registered at
Employees
Arbetsförmedlingen
included in
redundancy
Made
within 6
within 9
notices
redundant
months
months
2005
52,500
29,000
10,400
12,100
2006
36,800
20,000
5,800
6,800
2007
30,000
15,900
4,200
5,000
2008
95,900
59,800
28,700
32,800
2009
115,200
71,800
29,200
32,700
Sept. 2010*
33,500
21,400
5,400
-
* Data only up until September in order to effect a follow-up period of six months. In total,
44,500 employees were included in redundancy notices during 2010.
Jobseekers
During 2010, the number of individuals who had at some point during the
year been registered at Arbetsförmedlingen amounted to 1.1 million, of
which 730,000 were at some point registered as openly unemployed. 6 The
corresponding number for 2009 was approximately 1 million registered, of
which 726,00 had been openly unemployed at some point during the year. At
the end of 2010, there were 708,000 individuals registered which was a
slight increase in comparison with the previous year. Almost 500,000
individuals left Arbetsförmedlingen (were deactivated) during 2010 and
280,000 of these found work (Table 2.3). Other reasons for leaving
Arbetsförmedlingen can be studies, pension etc. The reduced inflow along
with the increased outflow testifies to an improved situation on the labour
market.
Approximately 125,000 persons entered as jobseekers during each quarter of
2010 and about a third of these were completely new; they were not
The 'openly unemployed' are jobseekers who are not enrolled in a programme and are at the
labour market's disposal, i.e., can take a job immediately.
6
Page: 21 of 130
previously in registers of Arbetsförmedlingen. Approximately 125,000 also
left Arbetsförmedlingen during each quarter of 2010 which explains why the
numbers were constant over the year. Diagram 2.3 shows the number of
people registered during each quarter, categorized by the total number of
people registered, re-registered and newly registered during the period 19922010.
Table 2.3 Key ratios for jobseekers
2009
2010
Registered at the year end
711,300
708,600
Inflow (newly registered)
544,700
488,600
162,400
157,500
409,000
493,900
221,200
281,800
230,000
310,600
of which first time registered
Deactivated
of which found work
Started programme
Diagram 2.3The number of registered, re-registered and newly registered
jobseekers at Arbetsförmedlingen per quarter, 1992-2010
New registered
Amount
Re-registered
Registered
1 400 000
1 200 000
1 000 000
800 000
600 000
400 000
200 000
1
20
10
Q
1
20
08
Q
1
20
06
Q
1
20
04
Q
1
02
Q
1
20
20
00
Q
1
98
Q
1
19
19
96
Q
1
Q
94
19
19
92
Q
1
0
Many who are already employed use the services of Arbetsförmedlingen
without being registered as jobseekers. Of those who are unemployed
however, the majority are registered. The proportion of the unemployed who
choose to register can be estimated by using statistics from Statistics Sweden
(Table 2.4). Data from the Labour Force Survey (LFS) indicates how large
the proportion of people registering is and also how this changes over time.
The proportion varies in measurements conducted since 1990. The variation
is as large as from approximately 74 and up to 93 per cent. One reason for
Page: 22 of 130
this is that the definition of unemployment in the LFS measurements
changed in 2005. More students looking for work are since then included in
the group 'unemployed'. This means that data for the years prior to 2005 are
not completely comparable to data from recent years. The proportion of
young people registering also decreased after the student condition in the
unemployment insurance was removed in 2007.
Table 2.4 The proportion of unemployed according to Labour Force Survey who
have been in contact with the Employment Service, in per cent
Year
Proportion
19901998
2003
2006
2007
2008
2009
2010
93.4
89.1
81
76
74
80.2
79.5
Source: Arbetsförmedlingen, IAF 2009:7 and Statistics Sweden.
The assembly of registration periods
The assembly of registration periods varies over time (Diagram 2.4). Since
the mid-1990s, the proportion of short-term registered (< six months) has
increased, only to fall significantly over the last year. This proportion varies
in line with the business cycle and the inflow to Arbetsförmedlingen. During
a recession, when the inflow increases, the proportion of short-term
registered will also increase. The group with the longest registration periods
has trebled its proportion compared to 1995.
Diagram 2.4 Proportions of jobseekers with different registration periods of the
total amount of jobseekers in September, 1995-2010 (combined registration
period during the last two-year period).
0-6 months
Per cent
6-12 months
12-18 months
18-24 months
24- months
45
40
35
30
25
20
15
10
5
0
1995
1997
1999
Source: Arbetsförmedllingen
2001
2003
2005
2007
2009
Page: 23 of 130
It is also interesting to study individuals' registration history further back in
time. Table 2.5 shows the number of people registered in September 2010 by
registration periods; i.e. how long the individuals have been registered all in
all during the last two year period (same division as in Diagram 2.4) and in
which year the individual was first registered at Arbetsförmedlingen. Of
those who have been registered less than six months during the last two
years (129,020), 30 per cent (36,690) have also been registered at
Arbetsförmedlingen as early as 1999 or earlier. Of all individuals who were
registered at the time in question (412,510), only 17 per cent (68,860) were
registered for the first time in 2010. This means that many of those
registered also have a fairly extensive registration history at
Arbetsförmedlingen.7
Table 2.5 Unemployed and programme participants by registration period and
point of time for the first registration occasion, 15 September 2010, number.
First
Time in unemployment or programme
registration
18-24
<6 months
6-12 months 12-18 months
>24 months
year
months
2010
60,330
8,520
10
2009
2000-2008
1991-1999
Total
68,860
5,700
18,450
18,460
3,000
-
45,610
26,300
27,410
29,920
29,670
21,050
134,350
36,690
35,510
33,620
27,680
30,190
163,690
129,020
89,890
82,010
60,350
51,240
412,510
Jobseeker groups
The registration periods among the jobseekers varies a great deal between
different groups. Table 2.6 presents in greater detail how individuals with
different registration periods are distributed based on different individual
qualities. The most important results are discussed below.
Age groups
The group 'young people' (younger than 25 years old) holds a significantly
larger proportion of people registered for less than six months. This owes
partly to the fact that at this age many are students or have other reasons for
not contacting Arbetsförmedlingen. The most concerning explanation,
however, is that the employment turnover is high. There is a high inflow into
this group but they do not stay with Arbetsförmedlingen for long periods of
time. The group '55 and above' is a group with a high employment frequency
on the labour market, but the revenue is lower among those who are
Since register of Arbetsförmedlingen does not extend further back than 1991, individuals who
were registered later could in reality have been registered prior to 1991.
7
Total
Page: 24 of 130
registered with Arbetsförmedlingen and there is a tendency to be registered
for long periods of time; a relatively large proportion, 24 per cent, has been
registered for two years or more.
Table 2.6 Unemployed and programme participants with different registration
periods categorized by quality for 2010, 15 September, per cent and sum total
in amounts
Time in unemployment or programme,
proportions
<6
6-12
12-18
18-24
>24
months months
months
months
months
Total
number
Men
34
22
19
13
13
198,700
Women
29
21
21
17
12
216,500
18-24 years
49
20
19
10
3
103,900
25-54 years
27
23
20
16
13
250,400
55-64 years
20
20
20
16
24
60,900
24
23
20
17
16
111,400
34
21
20
14
11
206,200
35
23
18
13
12
97,500
Born in Sweden
34
21
20
14
12
281,100
Born abroad
26
23
20
17
14
134,100
Not disabled
35
23
20
14
9
341,700
Disabled
15
18
21
20
26
73,400
Total
31
22
20
15
12
415,200
Comprehensive
school
Upper secondary
school
Higher education
Educational level
Individuals with only comprehensive school education differ from others
with a higher proportion of registered people in the group with longer
periods, and a smaller proportion in the interval 0 to 6 months; 16 per cent
have been registered more than two years, compared to 12 per cent among
the others. The group with a lower education level coincides with the older
age groups to some extent, where the registration periods are also longer.
The group with post-secondary education does however not differ
significantly from the group with upper secondary education.
Born abroad
The difference between individuals born abroad and in Sweden is reflected in
the fact that the proportion with shorter registration periods is significantly
Page: 25 of 130
larger among those born in Sweden. Among those born in Sweden, 34 per
cent have been registered for less than six months compared to 26 per cent
in the group born abroad.
Disability which entails reduced ability to work
There are great differences in the comparison between people with or
without disabilities. The proportion of those registered for two years or more
constitutes a significantly larger proportion among those with a disability (26
per cent) than among those who do not have a disability (9 per cent). Only 15
per cent of those with disabilities have been registered for less than six
months, compared with 35 per cent among the others. 8
2.3 Initiatives and Commissions
During 2003 it was decided that the work of Arbetsförmedlingen with
jobseekers and employers would be described as services. The purpose of the
implementation of descriptions was to establish a uniform and legally sound
work method nationwide. The result was that Arbetsförmedlingen now
provides nine services; seven for jobseekers and two for employers. Within
the scope of the services, Arbetsförmedlingen also has access to a number of
labour market programmes and methods. One method is a systematic
description of the different working operations used to deliver the services.
A short description of each service follows below. In Table 2.7, the number of
jobseekers who have utilized each service during 2010 are presented. The
corresponding data for the services directed at employers is not available.
Services for jobseekers
In connection with the establishment of the action plan, an assessment of the
jobseekers needs is made. At this time the jobseeker is assigned one or more
services based on the assessed difficulty on the labour market (see In-depth
box). The seven9 services Arbetsförmedlingen offers jobseekers are:







Jobseeking
Improve your jobseeking
Counselling for employment
Training for employment
Starting up a business
Clarifying your work capabilities
Adapting your work situation
A code for disability which is registered to a jobseeker is preceded by an investigation which
entails that newly registered people who are to receive a code for disability initially do not have
one. This is one explanation for the relatively small proportion of newly registered among
individuals with disabilities.
9 During 2011 another service will be introduced "Work preparation efforts". The service is
primarily intended for: • Jobseekers who after a long period of sick leave are to return to work •
Jobseekers with disabilities • Jobseekers with a long period of unemployment
8
Page: 26 of 130
Table 2.7 shows how many jobseekers have utilized each service during 2010.
The data is based on information from the jobseeker's action plan. This data
is estimated as there is also a group of jobseekers for which information
about which service they utilize is missing. The goal is that all jobseekers
shall have an action plan within 30 days but there are still people who do not
have an action plan (approximately 71,000), which can to some extent be
explained by the fact that they have only been registered for a short period of
time. Furthermore, there are 80,000 cases where an action plan existed but
there was no information as to which service they are utilizing. Parts of the
jobseeking service are also available to jobseekers that are not registered
with Arbetsförmedlingen (through the tools available at
arbetsformedlingen.se). There are accordingly a number of jobseekers who
take advantage of the services (primarily jobseeking) but who are not
included in the statistics below. Note that the same jobseeker can utilize one
or more services. On average, a jobseeker utilizes 1.6 services (of the
jobseekers that have an action plan where the services are stated).
Page: 27 of 130
In-depth
When a jobseeker has registered with Arbetsförmedlingen, the employment officer will make an
assessment of the jobseeker's needs. For each service there are a number of criteria as support in the
decision on suitable service or services.
Service
Jobseeking
Improve your
jobseeking
Counselling for
employment
Training for
employment
Clarifying your work
capabilities
Adapting your work
situation
Description of recipient
Ready for work
i)
has a profession which is in demand on the labour market
ii) is matchable in AIS (Arbetsförmedlingen´s information
system)
iii) can and wants to work
Need for deeper support
i)
risks becoming unemployed in the long-term
ii) has difficulties marketing their competence
iii) has a disability which entails reduced ability to work
i)
needs support/help in finding work, with applications, CVs
and interview preparation
ii) needs help in analyzing why the jobseeking is not producing
results
i)
needs to change or chose direction for work/education
ii) needs support for their choice of profession
iii) needs increased knowledge of their own personal
iv) prerequisites in work and profession choices and of the
labour market possibilities
v) needs support in utilizing their resources and the
possibilities which exist in new occupational fields
vi) needs support in assessing their competence
vii) needs a basis for finding other suitable employment
possibilities such as entrepreneurship
i)
needs to improve their occupational competence in order to
find work and has an outdated education or an education
which needs to be supplemented considering the current
requirements.
ii) has the prerequisites to manage the training considering
personal assets and social support
iii) is prepared to look for work where there is a demand
iv) is motivated for the training
i)
needs information on starting up their own business
ii) has an idea/plan for their own business
iii) needs to test whether the business idea is sustainable
Uncertainty exists regarding
i)
in what way a disease or a disability affects the ability to
work
ii) how the social situation affects the ability to work
iii) the ability to take responsibility for a job/duties
iv) the jobseeker's ability to value their capabilities for work in
relation to different occupations and occupational areas
v) how the jobseeker's personal capabilities affect the
possibility to work in an occupation/occupational area.
vi) need for support at the introduction to a new job/new
duties
i)
has a registered disability which entails reduced ability to
work and has a need to receive work aids to be able to
participate in work/training
ii) needs personal support in their introduction to work
Page: 28 of 130
Table 2.7 The scope of the services – number of jobseekers who have utilized
each service, 2010. (The same jobseeker can utilize one or more services)
Service
Amount
Jobseeking
895,100
Improve your jobseeking
215,400
Counselling for employment
62,700
Training for employment
90,100
27,700
Clarifying your work capabilities
121,100
Adapting your work situation
109,500
Sum total services
Jobseekers who utilize at least one service according to the
action plan
1,521,600
956,400
No service
72,400
No action plan
85,700
Total number of individuals registered with
Arbetsförmedlingen at some point during 2010
1,114,500
Even if the services that the jobseeker utilizes are for the most part
documented (in cases where the jobseeker's needs have been assessed and
documented in an action plan), reporting on the extent to which the services
are delivered and in what manner is problematic as an employment officer's
consultation with a jobseeker is complex. A consultation with a jobseeker
entails in many cases (perhaps in most cases) a dialogue regarding most of
the above-mentioned services. It is therefore difficult to quantify how much
support the jobseeker receives within the scope of each service. For example,
the employment officer may advise on which channels might be suitable for
the jobseeker to look for work whilst also discussing different possibilities for
training or what other occupational areas which may be current for the
jobseeker.
Jobseeking is the most common service and is available to all jobseekers. The
intention is that the jobseeker will find new employment as quickly as
possible. The objective is to achieve a functioning search and match process
which helps to reduce the period of unemployment and increase the level of
employment. Many who need extensive support in seeking work utilize other
services in combination with the jobseeking service.
Improve your jobseeking is available for all who need information about
how to apply for work. The purpose is for the jobseeker to develop
proficiency in applying for work in order to be able to seek work
independently.
Page: 29 of 130
Counselling for employment is available for all who have a need to choose or
change vocational direction or work. The purpose is for the jobseeker to be
able to relate his/her resources, experience and wishes to the labour market's
requirements and possibilities and be able to make a carefully considered
choice of work and/or training.
Training for employment is available to jobseekers that need to broaden or
increase their occupational competence in order to find work. The service
contains comprehensive information with regard to current employment
training. Jobseekers can express their interest, whereupon the employment
officer makes a selection of jobseekers that get to participate in the training.
Therefore, not all those who utilize the service receive training.
Starting up a business is a programme for those who are looking for
information about starting a business. Arbetsförmedlingen provides
information and reviews10 the business idea and will potentially thereafter
refer the jobseeker to the programme for starting a business. Therefore, not
all those who utilize the service go on to participate in the programme for
starting a business. In total, 30,000 individuals utilized the service, whereas
during the same year approximately 9,400 individuals entered the
programme for starting a business.
Clarifying your work capabilities is for jobseekers that need extensive
support in clarifying their capabilities for work or training. It is directed at
jobseekers who are insecure about their work capability or who have other
difficulties which affect their choice of work or profession.
Adapting your work situation is for registered jobseekers that need help in
adapting their work place, work tasks or working environment.
2.3.2 Services for employers
Arbetsförmedlingen provides two services for employers. They are:

Recruiting new employees

Pre-recruitment training
There is no corresponding information for employers on which services they
utilize as there is for jobseekers.
Recruiting new employees: Arbetsförmedlingen offers the service of
recruiting new employees to employers, staffing agencies and recruitment
companies. This is initiated by a short dialogue to establish the employer's
questions and issues. It involves recruitment in Sweden as well as in other
EU/EEA countries and Switzerland.
10
The reviewing of business ideas is performed by an external consultant.
Page: 30 of 130
Pre-recruitment training is for employers who have a need to recruit new
employees within industries and occupational areas where there is a lack of
labour and where the need for labour cannot be satisfied through the service
recruiting new employees.
2.3.3 Methods
For each service there are a number of methods, measures and programmes
available, supplemented by tools at Arbetsförmedlingen Online which
supports the services. The definition of a method is a description of a
systematic mode of procedure which rests on a scientific basis and/or a tried
and tested work method. 'Methods' is a suitable term to describe
Arbetsförmedlingen´s and employment officer's work with the purpose of
creating a uniform work method, efficiency and being legally secured. The
concept method therefore has a fairly broad meaning where certain methods
consist of a few steps while others are longer and more extensive. The
methods of Arbetsförmedlingen are general or related to a certain service.
The general methods can be used before or within the different services. The
work-related methods also provide the possibility for the employment
officer/specialist to choose a suitable method so that the customer can
receive support in the chosen service based on his/her needs. In total, there
are 32 quality-assured methods. The most common methods are the two
quality-assured general methods which are to be implemented in the first
meeting with a jobseeker. The method registration and introduction aims to
ensure the jobseeker is registered correctly with Arbetsförmedlingen.
Accurate information on the jobseeker is a prerequisite for efficient
matching. In connection with the registration the jobseeker is given the
information they need to be eligible for benefits and utilize the search tools
that Arbetsförmedlingen provides. As early as the initial registration,
Arbetsförmedlingen makes a first matching of the jobseeker's qualifications
with suitable jobs. The method establish service is used with the purpose of
establishing which services the jobseekers is in need of in order to find
employment as fast as possible. 'Establish service' is the process which
precedes every decision on service.
2.3.4 Programme with activity support
Within the scope of the services a number of labour market programmes are
also available. As a participant in the programmes the jobseeker can during
this time either receive compensation in the form of activity support or
subsidised wage, depending on the programme's design. All programmes
and other support for the jobseeker can be arranged under a service.
The duration of a programme varies substantially but a common
denominator is that the participants receive compensation as activity
support regardless of whether or not the individual received compensation
from the unemployment insurance whilst unemployed. The level of the
Page: 31 of 130
compensation may, however, vary depending on which compensation the
individual has received whilst unemployed. A jobseeker who is assigned to a
programme and declines also risks losing their compensation or receiving a
lesser amount, which is why there is a strong incentive for the individual to
participate in the programmes. Below is a summary of the programmes
which are or were previously available at Arbetsförmedlingen.11
Employment training, normally including apprentice positions.
Historically, skill shortage training for employees has also existed.
Job experience of various types has existed at Arbetsförmedlingen. Trial
opportunities and practical skills development, for example, are currently
available. Lyft, a project which was in progress during 2010, still has
participants but no new decisions may be made after the turn of the year
2010/2011. Historically, university graduate job experience and internal job
experience have existed.
Support for the start of a business means that a jobseeker with a tried
and tested business idea receives activity support during a start-up period.
Youth efforts are targeted at individuals aged 24 or younger. Currently, the
Youth Job Programme includes efforts specifically targeted at young people.
Historically there have been other kinds of youth programmes such as the
youth job guarantee and municipal youth programmes.
Preparatory efforts involve preparation for further education or other
labour market programmes. These may for example take the form of
Preparatory Training Courses for individuals who need to supplement their
basic knowledge to be able to carry through employment training. Other
examples are activities within counselling and placement, the Employability
Rehabilitation Programme or Work life Introduction.
Projects with labour market policy focus are run in collaboration
between Arbetsförmedlingen and other actors on the labour market and are
intended to strengthen the individual's possibilities of finding employment.
The Job and Development Programme is currently the most
comprehensive programme. All jobseekers that have used their 300 cash
benefit days from the unemployment insurance fund are offered a place on
the programme. There is no time limit for the initiative but the jobseeker
finishes the programme when he or she finds work or for some other reason
is no longer at the labour market's disposal. The first phase of the
programme involves assessment, jobseeking activities and preparatory
efforts. In the second phase, the activity focuses more on training or job
experience and workplace activities. Jobseekers can also take part in other
For a more detailed description of the programmes, see for example arbetsformedlingen.se or
Arbetsförmedlingen´s report "Labour market programmes, Annual report 2009"
11
Page: 32 of 130
efforts such as training or job experience within the scope of the Job and
Development Programme. In the third and final phase the participant gains
employment with an organizer.
2.3.5 Subsidised work
A common factor for efforts labelled as subsidised work is that the
participant has employment with an employer and receives a salary from
them. In turn, the employer receives a subsidy in the form of a tax reduction.
The individual recruitment incentives decreased considerably during
2008 and 2009. Those available today are the special recruitment incentive
and step-in job. Previous incentives are for example the general recruitment
incentive and plusjobb (plus job).
Initiatives for individuals with disabilities is a group of wage
subsidies which often stretches over a longer period and where the level of
subsidies may vary. Wage subsidy is the most common form, the others are
sheltered public employment, development employment and security
employment.
New start jobs is an initiative for jobseekers that have been isolated from
the labour market for a longer period of time. All individuals who meet the
formal requirements and have an employer who is willing to employ the
individual are entitled to the incentive. Special new start jobs which target
those who are 25 years old or younger are another variant of the New start
jobs. Previously there were also New start jobs for part-time unemployed.
2.3.6 Turnover and flows between different activities
Within most of Arbetsförmedlingen´s jobseeker categories it is true that the
flow during a year is significantly larger than the stock, which implies a large
turnover of jobseekers between different jobseeker categories (see Table
2.8). The stock of openly unemployed is for example just a third of the flow
to or from the jobseeker category during the year. Since the flows are
calculated annually it can be interpreted that the average time in the
jobseeker category openly unemployed is around four months. 12
Some categories deviate from this pattern. Wage subsidies is one example in
which the numbers are more than double the size of the flow to or from the
category, which implies registration periods of more than two years. For
large changes in the in and out-going numbers it is not possible to use the
relationship between flow and numbers to estimate the registration periods.
A simple rule of thumb is that the average time is equal to the proportion divided with the
inflow (our outflow). A third of a year is four months.
12
Page: 33 of 130
Table 2.8 Flow to and from different jobseeker categories during 2010 and
incoming and outgoing stock at the beginning and end of the year. Inflow and
outflow gives the total for the year. The same individual may appear several
times in the flows.
Jobseeker category
11 Openly unemployed
Incoming stock
01-01-2010
Inflow
Outflow
Outgoing stock
31-12-2010
255,800
640,300
685,500
210,500
14 Jobseekers with disabilities
54,100
145,100
148,000
51,100
21 Part-time unemployment
37,300
58,400
63,800
32,000
22 Employed by the hour
63,100
126,700
134,300
55,500
31 Temporary employed
22,000
111,000
108,600
24,400
33 New start jobs
21,000
47,400
28,800
39,500
35 Employed jobseekers from Samhall
2,500
2,300
2,300
2,500
36 Special new start jobs
1,600
600
1,200
1,000
38 Development employment
2,000
3,700
2,700
2,900
39 Security employment
11,700
6,700
2,800
15,600
41 Job-changers
18,600
40,200
37,700
21,000
42 Wage subsidy (for disabled persons)
47,700
20,000
21,700
46,000
43 Sheltered public employment
4,500
1,900
1,800
4,500
46 The start of a business
3,800
9,400
9,300
4,000
49 Special recruitment incentive
3,100
4,400
4,400
3,100
14,000
58,900
62,200
10,600
-
8,800
6,700
2,100
800
5,400
5,600
600
67 Practical skills development
2,600
9,900
11,000
1,500
69 The Youth Job Programme
51,900
88,000
91,200
48,700
70 The Job and Development Programme
54,300
89,300
79,500
64,100
71 Employability Rehabilitation Programme
10,500
40,700
38,300
12,800
-
38,400
31,800
6,500
54 Work experience
55 Lyft
59 Trial opportunity
72 Work life Introduction
73 Activities within counselling and placement
1,000
7,400
6,200
2,200
75 Projects with labour market policy focus
100
1,300
1,000
400
76 In-depth assessment and counselling
200
15,200
12,900
2,500
2,400
5,700
5,500
2,600
12,000
21,400
8,500
24,900
81 Employment training
5,700
19,700
20,100
5,300
83 Preparatory Training Courses
2,400
31,800
28,900
5,200
78 Step-in jobs
79 Job and Development Programme phase 3
Note: The employment training does not include the training provided within the scope of the
guarantees (jobseeker categories 69 and 70).
Page: 34 of 130
But it is still interesting to see the large difference that exists between the in
and outflows in the Job and Development Programme's phase 3 where the
inflow is significantly larger than the outflow. The stock will continue to
build up as long as these circumstances prevail.
2.4 Special assignments
Beyond the assignment to efficiently bring together jobseekers and
employers looking for labour, Arbetsförmedlingen has a number of other
special assignments. A short description of these follows below.
2.4.1 Work life Introduction
On the first of January 2010 a new labour market programme called Work
Life Introduction was initiated. To be eligible for the introduction the
applicant must have been on sick leave and exhausted the right to further
compensation from Försäkringskassan. The introduction aims to aid
jobseekers who are unclear about their own situation, abilities and
requirements on the labour market and who therefore need guidance and
support in order to go back to work.
The introduction shall form a concentrated investigation and assessment of
the individual's situation and need of support. It can continue for a
maximum of three months. During the introduction the individual is
prepared for work or for another labour market programme. If having
finished the Work Life Introduction the person is deemed to be at the labour
market's disposal, the person shall be referred to Arbetsförmedlingen´s
regular activities.
During 2010, approximately 38,000 individuals started the programme. This
jobseeker group differs from the other jobseekers of Arbetsförmedlingen in
several respects. The group has a long absence from working life and the
scope of remaining problems related to ill-health is larger. Those
participating in the introduction may have been on full-time or part-time
sick leave and may or may not have retained their employment. The group
can be assumed to have a need for rehabilitation efforts during a longer
period than other jobseekers and Arbetsförmedlingen´s assignment is to
support them and improve their conditions for finding employment.
2.4.2 Introduction activities
The target group for this assignment is newly arrived refugees with relatives
who have been granted a residence permit after October 2010.
Arbetsförmedlingen has been given the overall responsibility of establishing
the newly arrived on the labour market13. Arbetsförmedlingen shall conduct
13
See the Act on establishment activities for certain new arrivals (2010:197) .
Page: 35 of 130
an introduction dialogue with all individuals in the target group. The
purpose is to draw up an establishment plan to facilitate and hasten the
establishment of the newly arrived on the labour market. A new provider, the
introduction guide, shall provide support for the establishment in working
life and the society. Individuals with an establishment plan decide
themselves whether they wish to be supported by an introduction guide. The
introduction guide's assignment includes contacting employers, offering
advice and support at e.g., study and vocational choices, coaching, matching
and also to provide support in different social matters.
During the period December 2010 to March 2011, Arbetsförmedlingen has
accepted 2,273 individuals within the scope of the introduction activities 14.
This is so far a somewhat lower number than the Migration Board's forecast.
The conditions of the individuals within the introduction activities differ
somewhat to those of others registered with Arbetsförmedlingen. A relatively
large proportion of these, closer to half, only have a comprehensive
education, shorter than 9 years as their highest level of education.
Approximately four out of ten also lack occupational classification; i.e. they
have no identifiable trade. Among the 2,273 registered newly arrived, 1,552
had their right to an establishment plan examined and 98 per cent of these
received an establishment plan. At the end of March, 770 or 51 per cent of
those who received an establishment plan had also received a decision
regarding an introduction guide.
Arbetsförmedlingen can also assist with housing within the introduction
activities. This means that Arbetsförmedlingen makes a collected assessment
on suitable housing based on the introduction conversation and the
conditions for the newly arrived to find work within commuting distance.
The assessment shall also take into consideration any medical needs and the
family situation. The newly arrived will thereafter receive an offer of a
residence. A housing case can pertain to several persons but at least one is
included in the introduction reform. From the turn of the year 2010/2011 up
until March, 772 housing cases have been instigated, of which 299 have been
concluded. Arbetsförmedlingen also took over a balance of 302 housing
cases from the Migration Board, of which 221 have been concluded.
Arbetsförmedlingen had, at the end of March, offered a residence to a total of
663 people.
2.4.3 The monitoring function of Arbetsförmedlingen
The foundation of Arbetsförmedlingen´s monitoring function is to monitor
whether the jobseekers are at the labour market's disposal and therefore
eligible to utilize the unemployment support. The support consists of
The figure is low because individuals who are missing a personal identity number or coordination number are initially administered manually and registered in the database later on.
The numbers will therefore be adjusted when the data is entered into the database.
14
Page: 36 of 130
financial compensation as well as measures of different kinds to facilitate the
return to work. Besides the connection to the unemployment insurance,
where Arbetsförmedlingen has a specific assignment, there are also
connections to the municipalities' financial support. The Social Services Act
supports the municipalities' right to require that persons under the age of 25
receiving maintenance support shall be registered at Arbetsförmedlingen
and actively apply for work. Försäkringskassan also uses
Arbetsförmedlingen´s assessments of individual's right to compensation in
connection with decisions on the level of the activity support. For suspicion
of benefit fraud, Arbetsförmedlingen has a disclosure obligation.
The unemployment insurance
The unemployment insurance is a readjustment insurance and is not
intended to permanently bridge loss of income. A generous unemployment
compensation may entail negative consequences on the unemployment and
on the unemployment periods if the negative effects of the compensation are
not actively counteracted with policy measures. Arbetsförmedlingen´s
commission within the unemployment insurance is of great socio-economic
importance.
In order to obtain compensation during unemployment, requirements are
posed on the individual15. Applicants are entitled to benefit in the event of
unemployment if they, are capable of working and there is nothing to
prevent them from undertaking work on behalf of an employer for at least 3
hours each working day and an average of at least 17 hours per week, are
prepared to accept an offer of suitable work during a period for which they
have not given notice of an impediment that can be accepted by the
unemployment fund, are registered as jobseekers at the public employment
office as prescribed by the Government or an authority designated by the
Government, cooperate in establishing an individual action plan in
consultation with the public employment office, and are actively seeking
suitable work but cannot obtain such work.
In order to prevent abuse of the unemployment insurance, there is a need for
continuous monitoring to establish that the jobseeker is actually fulfilling the
requirements for the right to compensation. Arbetsförmedlingen has been
given a special commission by the Government (SFS 1997:238) to monitor
the jobseeking activity and to inform the unemployment fund if there is a
reasonable cause to suspect that some of the requirements are not fulfilled.
During 2010, an average of 140,000 persons who received benefits were
registered with Arbetsförmedlingen as either openly unemployed, part-time
unemployed or temporarily employed by the hour. Arbetsförmedlingen´s
15
The current rules are stipulated in the Unemployment Insurance Act (SFS 1997:238).
Page: 37 of 130
work to maintain the unemployment insurance as a readjustment insurance
is presented in brief below.16
Information on the conditions in the unemployment insurance
It is important that the jobseekers are well informed on which rules apply to
benefit from the compensation. It is therefore Arbetsförmedlingen´s
obligation to inform the jobseeker on the basic conditions and the possibility
of applying for unemployment compensation. This should be done in
connection with the registration. In 2009, approximately 90 per cent of
those who receive benefits stated that they were aware of the conditions of
the insurance (Diagram 2.5). The percentage has since then decreased
somewhat. In 2010, approximately 80 per cent stated that they were aware
of the conditions.
Diagram 2.5 The proportion of individuals who are aware of the basic
conditions for receiving compensation from the unemployment fund, divided
into individuals with and without compensation respectively.
with compensation
Proportion
without compensation
1,0
0,9
0,8
0,7
0,6
0,5
0,4
0,3
0,2
0,1
0,0
2006 Q 1
2007 Q 1
2008 Q 1
2009 Q 1
2010 Q 1
Source: The Swedish Public Employment Service
Action plans
Arbetsförmedlingen establishes action plans both for jobseekers who receive
compensation and for those who do not. An action plan is a plan which
clarifies what must be done in order for the jobseeker to find work. The
action plan shall ensure that the jobseeker adheres to an efficient search
strategy and that the jobseeker can take advantage of the appropriate
In connection with the procurement of External services, special attention must be given to
the conditions which support the provider's participation in the monitoring function.
16
Page: 38 of 130
services. The plan shall be individual for each jobseeker and so clearly
formulated that in an evaluation it shall be possible to establish whether or
not the jobseeker has fulfilled the agreement in the action plan. Should the
jobseeker receiving compensation from the unemployment fund not
participate in drawing up an action plan, or fail to adhere to the established
plan, the unemployment fund will be notified.
Within 30 days of registration, 80 per cent of the jobseekers claiming
compensation in 2010 had received an action plan (see Diagram 2.6).17 The
corresponding development for jobseekers without compensation is similar,
but the level is somewhat lower; barely 70 per cent have received an action
plan within 30 days (not included in the diagram). The action plans shall
then be updated at least once every six months or when the jobseeker's
prerequisites for applying for work have changed. Approximately 80 per cent
of those with compensation and 60 per cent of those without compensation
will receive an updated action plan before the six month deadline.
During 2010, a total of 1.3m action plans were established. 760,000
individuals received a new action plan (since the action plan is to be updated
every six months, the same individual may receive several action plans
during a year).
Diagram 2.6 The proportion of jobseekers (with compensation from the
unemployment fund) who have received an action plan within 30 days.
Unemployed
Proportion
Part-time unemployed
Temp. Employed by the hour
1,0
0,9
0,8
0,7
0,6
0,5
0,4
0,3
0,2
0,1
p
se
m
aj
10
20
ja
n
10
20
p
10
se
20
m
aj
09
20
ja
n
09
20
p
se
09
20
m
aj
08
20
ja
n
08
20
p
08
se
20
m
aj
07
20
ja
n
07
20
p
se
07
20
m
aj
06
20
06
20
20
06
ja
n
0,0
The quality of the action plan is difficult to quantify. One indicator is how the
jobseekers perceive the action plan. During 2010, a total of 82 per cent of
those with an action plan thought that it was a good or fairly good support. It
For more information on how many receive an action plan, which jobseekers are prioritized in
the work with action plans and information on regional differences, see Nilsson (2011a).
17
Page: 39 of 130
is primarily young people and those with an education at a comprehensive
school level who benefit most from the action plan. Of those who were not
satisfied, 21 per cent were of the opinion that they did not need an action
plan as they could manage on their own.18
Referrals
A referral for a vacancy is a way for the employment officer to inform the
jobseeker of suitable jobs to apply for. For jobseekers who do not receive
compensation from the unemployment fund, vacancy suggestions are used
instead. The difference between a referral and a vacancy suggestion is that a
referral is connected to a follow-up to find out whether or not the person has
applied for the position. Referrals are registered in the system as opposed to
vacancy suggestions which can occur either orally or in writing but are not in
any way registered. In accordance with Arbetsförmedlingen´s regulations, in
a referral, the employment officer has assessed that the employer's
requirements in the job description correspond to the jobseeker's
competence.19 If the jobseeker does not apply for a referred vacancy, the
administrator must notify the unemployment fund. The number of referrals
made varies over time and has during the 2000s indicated a decreasing
trend (see diagram 2.7). The number of referrals depends on how many
jobseekers are registered with Arbetsförmedlingen and how many jobs are
available for referral. One person may have received several referrals and
several people may have been referred to the same job.20
Diagram 2.7 Numbers of referrals per quarter, 1991 – 2010
Proportion
500 000
400 000
300 000
200 000
100 000
93
20
0
73
20
0
53
20
0
33
20
0
13
20
0
93
19
9
73
19
9
53
19
9
33
19
9
19
9
13
0
Arbetsförmedlingen, the jobseeker survey.
A vacancy suggestion also entails an assessment to match the employer's requirements with
the jobseeker's qualifications.
20 For in-depth information on referrals, see e.g., Labour Market Report 2010
18
19
Page: 40 of 130
Cancellation notice
The unemployed shall be available on the days for which he or she requests
compensation from the unemployment fund. In the event of non-attendance
following a summons or in accordance with an agreement,
Arbetsförmedlingen shall immediately submit a cancellation notice for the
jobseeker to the unemployment fund.21 A cancellation notice means that
Arbetsförmedlingen notifies the unemployment fund that an unemployed
person is no longer registered with Arbetsförmedlingen in accordance with
the prescription decided in the Swedish Unemployment Insurance Board
regulations (IAFFS 2009:4). When a cancellation notice has been submitted,
the payment of the compensation will cease until the person is registered
again. Statistics of the number of cancellation notices exist but they do not
provide any information about how Arbetsförmedlingen is managing its
commission. To determine how the commission is being managed,
information about how many should have been cancelled due to nonattendance is required.
Notifications
Arbetsförmedlingen is obliged to submit a notification to the unemployment
fund if the unemployed is deemed not to meet the requirements to obtain
compensation. When a notification is submitted to the unemployment fund,
an investigation is made as to whether or not the jobseeker has met the
requirements. Payment of the compensation ceases until the investigation is
concluded and an assessment of a potential consequence is made 22. The most
common reasons for submitting a notification are that the unemployed
person has neglected to apply for suitable jobs to a great enough extent or
that they have not applied for a referred job. 23 and 18 per cent of
notifications respectively are issued for these reasons. The number of
notifications per 1000 beneficiaries has seen a downward trend since the
peak in 2007 (Diagram 2.8). However, the trend has turned and during 2010
the notifications have increased again.
21
22
See the Ordinance on Labour Market Programmes (2000:628) and AMSFS (2005:4).
One consequence may be non-payment or reduced compensation for a period.
Page: 41 of 130
Diagram 2.8 Number of notifications per 1000 unemployed with compensation,
monthly average.
7
Amount per thousand
6
5
4
3
2
1
ja
n
20
10
ja
n
20
09
ja
n
20
08
ja
n
20
07
ja
n
20
06
ja
n
05
20
20
04
ja
n
0
Development work
Since 2010 extensive development work has been under way within
Arbetsförmedlingen which is aimed at ensuring that the monitoring of the
unemployment insurance is conducted in a uniform and legally sound
manner (Arbetsförmedlingen, 2010b). Arbetsförmedlingen will follow up
this special investment during 2010 and 2011. The special investments shall
be implemented to achieve



Increased focus on the monitoring function
Uniform implementation of the regulatory framework, and
Follow-up of efforts
The investment occurs in several steps and on different levels of the
organization. The main outlines in the special efforts are that: Each
employment office shall establish local action plans for the work with the
unemployment insurance. Random inspections will be conducted to check
that notifications are correctly administered upon failure to apply for a
referred job. Support material is developed so that managers are able to
monitor the administrative quality pertaining to the insurance in accordance
with the result dialogues and quality evaluations which are to be performed
within the authority.
Page: 42 of 130
2.4.4 Sectorial responsibility for disability issues within
the labour market policy
Arbetsförmedlingen has a collected responsibility – sectoral responsibility –
for disability issues within labour market policy. Arbetsförmedlingen shall
within the context of this responsibility be unitive, supportive and
encouraging in relation to other parties. Arbetsförmedlingen shall also
collaborate with the Swedish Social Insurance Agency, the Swedish Work
Environment Authority and the National Board of Health and Welfare in
order to achieve more efficient usage of the available resources within the
sphere of rehabilitation.
2.4.5 Cooperation and collaboration
One of the points which was highlighted as a key issue for
Arbetsförmedlingen in chapter one was to seek close collaborations with a
wide spectra of parties and where possible to take on a leading role.
Arbetsförmedlingen´s commission assumes a close collaboration with other
organizations, authorities, municipalities and companies. These have been
on-going for a long time and a few of these collaborations are:
Labour market councils with representatives for municipalities, local trade
and industry, and labour unions. The purpose of the labour market councils
is to act in collaboration with external parties in support of a good
employment development and to develop matters of integration and
equality. There is at least one Labour market council in each of
Arbetsförmedlingen´s 58 Labour market areas23.
Trade councils exist on both regional and national levels. The participants in
the council are employer organizations and labour unions as well as
individual employers. The main assignment of the trade councils is to
improve the matching within concerned trades or professions by increasing
Arbetsförmedlingen´s knowledge on the existing needs and improve the
collaboration between Arbetsförmedlingen, the companies and the labour
unions. The trade councils can also highlight specific competence
requirements which are of importance in employment training.
Service co-operation between Arbetsförmedlingen, Försäkringskassan, the
Swedish Pensions Agency and the Swedish Tax Agency is intended to
facilitate the offering of a greater volume of services in joint premises in a
cost efficient manner. Here, Arbetsförmedlingen provides a form of
infrastructure for public service by maintaining the practical conditions for
creating accessibility for the entire country via a dense network of premises.
The local employment offices are divided into 58 geographical labour market areas, see the
section on Local Arbetsförmedlingen.
23
Page: 43 of 130
There are approximately 100 service offices and a joint planning which is
based on each authority's assignment.
Co-operation agreements exist between Försäkringskassan, the Swedish
Prison and Probation Service and Samhall. The co-operation with
Försäkringskassan shall facilitate the transition from compensation via the
national health insurance to active jobseeking and new employment. The
agreement with the Swedish Prison and Probation Service shall contribute to
strengthening the individual's position on the labour market.
2.5 Mode of delivery
The customers of Arbetsförmedlingen can access the services of
Arbetsförmedlingen through many different modes of delivery. The primary
mode of delivery is the local Arbetsförmedlingen. There are approximately
200 offices around the country, but several others points of contact also
exist. Other ways to access the services of Arbetsförmedlingen are via
customer service, Arbetsförmedlingen Online and private providers.
2.5.1 Local Employment Service
The local Arbetsförmedlingen is the primary point of contact. Opening hours
vary depending on the size of the office and the population base. The offices
can be divided into four different types of employment offices:
Large employment offices with a large population base. These have a fully
developed direct service (customer reception) with continuous activities and
great accessibility for spontaneous visits.
Medium employment offices which offer direct service but where activities
cannot be offered to the same extent or frequency as at the large employment
offices.
Smaller employment offices which do not have developed direct service but
which still offer customer workstations and service to persons who visit the
office spontaneously.
Employment offices which are manned from a distance. These provide
access to computers where the jobseekers can seek work themselves
(customer workstations), telephones for dialogues with employment officers
and video equipment primarily for appointments with employment officers.
In locations where previously only rather limited opening hours were
possible, accessibility was improved when the opening hours were extended.
Page: 44 of 130
Table 2.9 Number of offices, employees and jobseekers divided into market
area, March 2011
Market
area
Number
Number of
of
employees*
offices
Total
number of
registered
Number of
Number of
Number unemployed
unemployed Employees
of
and
and
per office registered programme
programme on average
per
participants
participants
employee
per
employee
Stockholm
Gotland
13
709
55,800
34,900
55
79
48
North
Mälardalen
28
793
65,600
42,200
28
83
48
South
Mälardalen
Östergötland
24
1,064
92,800
59,600
44
87
52
Göteborg
Halland
23
931
81,000
51,400
40
87
49
North West
Götaland
15
629
59,800
38,000
42
95
53
West
Svealand
19
783
68,100
42,600
41
87
48
South
Götaland
38
1,261
119,200
71,400
33
95
55
Småland
17
559
52,500
31,100
33
94
54
South
Norrland
22
738
64,500
42,000
34
87
52
North
Norrland
30
530
45,400
28,300
18
86
48
Dep.
Rehabilitation
to work
917
-
The
Employment
Service
Customer
Service
438
-
Central
functions
(head office)
1,421
441,500
39
79
46
Total
229
10,771
704,600
*actual resources, i.e. excluding holidays, sick leave and leave of absence.
Page: 45 of 130
In addition to employment officers there are also a large number of
specialists such as psychologists, occupational therapists and physiotherapist
working at Arbetsförmedlingen. The local employment officers are organized
in 58 geographical labour market areas which in turn are divided into ten
different market areas. How the offices, personnel resources and jobseekers
are divided between these market areas is illustrated in Table 2.9. The
specialists are organized under a special department which works on the
assignment of one or more labour market areas which is why they cannot be
geographically divided in the same way.
It is difficult to quantify the work performed at the local employment offices
during a year. In the lack of studies of use of time, a rough overview of the
scope of the work conducted at employment offices and customer service is
obtained by summarizing events which are continuously registered in
Arbetsförmedlingen´s data register. The activities that can be measured in
this way is changes of jobseeker status, new registrations, deactivations (i.e.
the number of persons leaving Arbetsförmedlingen for various reasons),
decisions (including the decision that a jobseeker shall participate in a
programme), referrals, follow-up of referrals24, receipt of new vacancies (also
known as 'orders'), establishment and updating of action plans, started
activities within the guarantees, the number of notifications issued, the
number of employer contacts25, re-registering of persons who have been deregistered from the unemployment fund, manual de-registrations of persons
receiving compensation26, commenced rehabilitation efforts and conducted
information meetings on the unemployment insurance (Table 2.10).
Every registration of this kind is associated with an active effort by
Arbetsförmedlingen. However, the time taken for each of these effort varies.
A new registration is associated with consultation with the jobseeker to cover
things such as the method registration and introduction and also to establish
service. The establishment of service usually generates a new or updated
action plan. Where programme placements are concerned, change of
jobseeker category is preceded by investigation work, while a change of
status to working or studying is not always preceded by a corresponding
work effort. Some of the events are also dependent on each other. A person's
enrolment in a programme, which in practise entails a change of jobseeker
category, is preceded by a decision. These count as two events; first in the
instance of a consultation or work effort which leads to the decision, the
second in the instance of a placement in the programme. The time these two
events take differs, which again underlines the fact that it is the actual time
A follow-up of a referral means that the jobseeker states whether he/she has applied for the
job or got the job or not. Due to the backlog, not all referrals made in 2010 will be followed-up
during the same year.
25 Also includes automatic updates on the contact date when an employer registers an order,
which means that it does not only describe physical contacts between Arbetsförmedlingen
and the employer.
26 Manual de-registration is performed, for example, upon non-attendance of a consultation.
24
Page: 46 of 130
spent on the service work which should be measured and not the sum total of
events.
Table 2.10 Registered events/activities Arbetsförmedlingen which
can be read in the Employment Service's data register during
2010
Event
Amount
Changes of jobseeker category
1,993,248
New registrations
534,354
Deactivations
536,888
Decisions
1,788,437
Referrals
325,188
Referrals followed-up
314,519
Orders
334,730
Action plans
Activities
1,343,926
716,031
Notifications
3,776
Employer contacts
657,260
Re-registrations
445,563
Manual de-registrations
136,227
Commenced rehabilitation efforts
Information on the unemployment insurance
12,958
376,528
Number of employees (excl. head office)*
Total number of events
9351
9,519,633
Events per administrator during 2010
1,018
Events per administrator and day**
4.0
Note: Several working operations are not registered in the database, for example vacancy
suggestions, telephone dialogues and e-mail contacts. Recruitment meetings, meetings with
private providers etc. are not included either. The table therefore presents an underestimation
of the number of events during the year.
*Taking into account the total number of employees, the number of people in work on an
average working day less those absent due to illness, holiday, part-time work etc.
**The number of working days per year is assumed to be 223 in the calculation (Work days
during 2010 = 253 in accordance with the National Institute of Economic Research (NIER)
minus 30 days of holiday).
The summary can therefore not be interpreted in terms of efficiency. It does
not disclose anything about the quality of the efforts or the individual
jobseeker's actual need of the event. It illustrates different working
Page: 47 of 130
operations which are performed annually at the nation's employment offices
in order to the deliver the labour market policy commission. Furthermore,
the summary is not comprehensive. There is for example no information on
the number of vacancy suggestions, answered telephone calls, e-mail
contacts, recruitment meetings or meetings with private providers. Such
statistics are not registered in the database unless they generate a decision or
an update of the action plan. Customer meetings which generate notes
without an action plan being updated and without any formal decision being
made are not accounted for here either. The same is true for updates of
information such as vocational coding and coding of disabilities, unless this
occurs as a part of an updated action plan. Based on survey material,
Arbetsförmedlingen (2011) estimates that the number of answered telephone
calls and the number of e-mail contacts amounted to 743,0000 contacts and
that the number of physical visits amounted to 5,475,600. A time estimate of
the operations accounted for would therefore give an underestimate of the
collected time spent.
In the light of this observation, at least 9.5m events were registered at the
nation's employment offices during 2010 and the number would increase if
contacts via telephone and e-mail could be reported separately. The number
of employees at the country's employment offices amounted to 9,351 (see
Table 2.9). The scope of the work is therefore equivalent to at least 1000
events per administrator and year, or at least 4 events per day. It should be
emphasized that the measure is not a measure of efficiency or a measure
which should be continuously monitored with a target level. The reporting
should instead stimulate the will to, in an even more evident way, measure
the time-use within the activities and put it in relation to actual results.
2.5.2 Private providers
Arbetsförmedlingen has extensive experiences of procurement of
employment training which is delivered by external providers. By procure
with external providers, the activities are given a greater possibility of
finding the mode of delivery or the supplier which is most cost effective in
different situations. Since 2007, Arbetsförmedlingen has had a commission
from the government to also procure job placement services from private
providers. A trial initiated in 2007 rapidly expanded during 2008 and 2009.
Initially, the private providers worked almost exclusively with jobseekers
within the scope of the Job and Development Programme and the Youth Job
Programme but during 2009, the agreement expanded beyond these
programmes. Diagram 2.9 shows the development in volume of jobseekers
who are with a private provider. During 2010 there were agreements with
938 private providers and approximately 150,000 persons have during the
year received support from a private provider. To ensure that private
providers are a part of the services on offer, a goal has been established that
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a third of the participants in the Youth Job Programme and in phases 1 and 2
of the Job and Development Programme shall be offered procured services. 27
The procurement is conducted in accordance with the Public Procurement
Act (PPA) and the Act on System of Choice in the Public Sector (LOV). In
December 2010, 15 per cent of the participants in the Job and Development
Programme were with a private provider and 20 per cent of the participants
in the Youth Job Programme.
Diagram 2.9 Number of jobseekers with on-going decision with private provider
Amount
70 000
60 000
50 000
40 000
30 000
20 000
10 000
20
08
20 -04
08
20 -06
08
20 -08
08
20 -10
08
20 -12
09
20 -02
09
20 -04
09
20 -06
09
20 -08
09
20 -10
09
20 -12
10
20 -02
10
20 -04
10
20 -06
10
20 -08
10
20 -10
10
-1
2
0
JOB
UGA
Others
The private providers have been tasked with offering individually adjusted
services which include personal guidance and support based on the specific
needs of each jobseeker. The purpose of offering services with a private
provider is to improve the matching and prevent exclusion, to give increased
possibilities for individually adjusted services, let the jobseeker access other
providers' knowledge and experience and provide space for more local and
smaller providers within the employment service operations. The starting
point for Arbetsförmedlingen´s work with private providers is that services
shall be provided in the manner best suited to maintain efficiency in the
activities. If private providers are better at delivering a service, that service
should be procured, but if the efficiency is greater in the own production,
private providers should not be engaged. With that starting point, it seems
natural to not set specific volume targets for the proportion of procured
services within Arbetsförmedlingen´s activities.
A third of the participants should have received the offer. This is not the same as saying that a
third of the jobseekers shall be with a private provider. Taking into consideration the probability
of leaving Arbetsförmedlingen, the proportion needed to achieve the goal of a third accessing the
service varies. This implies an average of around 20 per cent of the proportion; a percentage
which is lower when the estimated registration period is long and higher when it is short
(Jansson Dahlén unpublished memo 2010).
27
Page: 49 of 130
A challenge for the authority in the coming year will be how to best take
advantage of the opportunities which this provides. Most notably, the
development of effective compensation models will be central, as will the
monitoring of the results of various private providers' work.
Services from private providers during 2010
The procurement of private providers' services has been limited to a certain
number of areas and target groups. Below is a short description of the target
group for the private providers and what the services they offer include.
The job and development programme includes services such as assessment,
jobseeking activities with coaching, and labour market policy measures of a
guidance or orientation nature. Measures can be provided for a maximum of
six months.
The Youth Job Programme includes during the first three months an indepth assessment, study and vocational counselling, and jobseeking
activities with coaching. Following this, work experience or shorter training
programmes can be taken. The same applies here; measures can be provided
for a maximum of six months.
Shorter coaching efforts, also known as enhanced job coaching, can be
provided during one to six weeks both within the Job and Development
Programme and the Youth Job Programme.
The group newly arrived immigrants is offered the services of assessment
conversation, matching and jobseeking activities. The jobseeking activities
include drawing up a CV, practising job interviews, making visits to
workplaces and in some cases trying out a profession and receiving guidance.
Parts of the services can be delivered in the participant's mother tongue and
the measure can be provided for a maximum of six months. Newly arrived
immigrants can from 1 December 2010 also choose introduction guides
through a private provider. The support from the introduction guide is
provided for a maximum of two years.
Within the Employability Rehabilitation Programme, measures are
provided which will lead to employment and work, e.g., job coaching,
matching against suitable jobs, various jobseeking activities, work training
and assessment of working capacity. Measures within the Employability
Rehabilitation Programme can be provided for a maximum of one year.
The newly and short-term unemployed can participate in coaching for work.
A personal coach is offered based on each participant's individual needs and
the labour market's demand for labour. The purpose is to develop the
jobseeker's skills in seeking work in an active and concious way. This
measure is provided for a maximum of three months.
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2.5.3 Customer services
The establishment of Arbetsförmedlingen´s Customer Services is a step in
increasing the service level and the accessibility of the services of
Arbetsförmedlingen. The customer services consists of employment officers
who provide service to jobseekers and employers via telephone, e-mail and
instant messaging. The customer services also examines advertisements and
direct advertisements. In addition to service regarding questions coming
from Arbetsförmedlingens´s customer, customer services also have authority
contacts (information submission), provide support at
arbetsformedlingen.se and answer questions via instant messaging at
arbetsformedlingen.se. There has also been a trial in which customer
services have administered programme decisions.
Arbetsförmedlingen´s Customer Services have approximately 400
employees at seven locations nationwide; Arvidsjaur, Karlskoga, Luleå,
Sollefteå, Södertälje, Söderhamn and Östersund. In 2010, customer services
had 85,900 employer contacts and 1m jobseeker contacts. In addition,
297,000 job advertisements were examined during the year. Each week,
customer services answer 22,600 telephone calls on average. The budget for
customer services amounts to 3.9 per cent of Arbetsförmedlingen´s total
budget, a proportion which has increased over the last few years.
2.5.4 Arbetsförmedlingen Online
The internet use in the society has increased rapidly during the last decade.
Today, online service from authorities, institutions and companies, any time
of the day, is more or less a matter of course. Arbetsförmedlingen offers a
number of services, including general services such as information and the
possibility of conducting personal matters via a web portal on the website.
Arbetsförmedlingen offers a cost-free infrastructure to facilitate the
matching on the labour market where jobseekers and employers can
exchange information of importance in the recruitment process in a
structured manner. Arbetsförmedlingen Online can be divided into two
principal areas of use:

Services directed at people who are entitled to different types of
support based on their situation on the labour market.

A general function which is available to anyone seeking employment
or labour.
Information can be bought or sold on a market, but as the labour market in
all likelihood functions less well if the information is limited, there are clear
socio-economic gains in providing a cost-free infrastructure for information
dissemination in the recruitment process. Arbetsförmedlingen has created
these conditions. Chapters three and four of the report will discuss the
importance of the internet in the recruitment process in more detail.
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The content on arbetsformedlingen.se is structured and adapted to the
customer groups of jobseekers and employers. Each target group has its own
start page where the information is assembled. The services available for
jobseekers are:
"Min sida" (My page) where jobseekers can register, present themselves with
a CV, see which employers are interested in them and which job
advertisements match their CV. At the end of 2010 there were around
140,000 presentations of jobseekers available.
”Hitta ledigt jobb” (find vacancies) where jobseekers can search the job bank
both nationally and internationally, search for summer jobs, find links for
other job sites and partake in activities offered by Arbetsförmedlingen.
”CV och ansökan” (CV and applications) gives the opportunity to
interactively explore which types of jobs fit the person, design a CV and
prepare for job interviews.
”Yrke och framtid” (Occupation and future) shows information on
occupations, studies and labour market prospects for various occupations.
This section has films with presentations of professions, something which
not only increases the knowledge of what the jobseeker can expect from a
certain profession but also generates more relevant applications.
"Stöd och service" (Support and service) collects information about the
services of Arbetsförmedlingen and provides downloadable forms.
Corresponding services exist for employers:
”Min sida” (My page) for employers where the employer has their own
account in order to access the services such as searching the CV bank or
posting advertisements. At the end of 2010, a total of 101,000 employers had
an account with Arbetsförmedlingen.
”Hitta medarbetare” (Find employees) where the employer can search for
suitable candidates in the CV bank.
”Annonsera” (Advertise) where the employers themselves can post and
administer job advertisements on Arbetsförmedlingen´s website.
”Stöd och service” (Support and service) provides information about the
different types of compensation an employer can receive in connection with
an employment. Employers can also provide notice of cutbacks in
operations.
The available information is also of interest for parties other than
Arbetsförmedlingen´s customers. Some examples of those who use
arbetsformedlingen.se to seek labour market information are individuals
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who are generally interested in labour market questions, trade organizations
looking for general labour market information, authorities and
municipalities, political parties and professional and industrial
organizations.
The extent and the use of the information conveyed through
Arbetsförmedlingen´s internet service is difficult to quantify. This is also
true with regard to the extent of recruitments brought about due to the
jobseeker or employer utilizing one of these services, not least because the
recruitment channel only is one of several possible channels. However, the
cost of maintaining this infrastructure is proportionately small and the value
which the extra service brings the users should do more than simply
compensate the costs.
2.6 Discussion
A great deal of the work performed by Arbetsförmedlingen is difficult to
quantify. Here are a few simple key figures for 2010: Approximately 1.1m
people were registered with Arbetsförmedlingen for a longer or shorter
period. There were 530,000 new registrations and as many deactivations.
Nearly 1.8m decisions were made. Arbetsförmedlingen referred jobseekers to
a vacancy 325,000 times. The commission within the unemployment
insurance was carried out by establishing 1.3m action plans, conducting
380,000 information meetings about the unemployment insurance and
issuing 4,000 notifications. All in all, 65,000 employers reported 551,000
vacancies to Arbetsförmedlingen. This constitutes a third of all vacancies in
the economy during the year. The measures which can be read from the
register data only presents a part of the work conducted at employment
offices, customer services, Arbetsförmedlingen Online and by private
providers during a year.
The employment officer's professional role is diversified and different
jobseekers have different needs for support in the matching process. For
example, a referral which results in the jobseeker gaining employment may
be preceded by a small work effort by matching the jobseeker's qualifications
against vacancies or by an extensive work effort involving assessment,
investigations, counselling and coaching. A registered event is preceded by a
more or less extensive work. Approximately 300,000 jobseekers have started
a labour market programme following an employment officer's assessment.
During registration dialogues or follow-up dialogues, 1.3m action plans have
been established together with the jobseeker. The amount of work
performed at the nation's employment offices is consequently very large.
The professional role as employment officer is constantly developing. The
changes which have taken place within Arbetsförmedlingen during the last
few years have also affected the professional role. The work tasks have
Page: 53 of 130
changed in part as an effect of increased procurement of services. The
number of direct customer contacts also decreases somewhat when the need
for contacts and decisions in connection to the private providers increases.
The employment officer must assess which jobseekers need to be directed to
which provider and participate in the follow-up and monitoring of the
provider.
The extended assignment for persons who have come back from sick leave
also affects the employment officer's professional role as it entails increased
demands on the employment officer's ability to assess the individual's
possibility of finding work. A feature of this nature has existed within the
authority from the beginning, but the extent of this has changed. During
certain periods it has been more important to limit measures in relation to
persons deemed to not be at the labour market's disposal. This has been the
case for matters relating to unemployment compensation, the national
health insurance and the social services' decisions on assistance. The
extended assignment of giving support to those coming back from sick leave
entails assessing which measures could lead to the person joining the labour
market.
The new introduction activities entail further changes in the professional
role. The element of exercise of public authority becomes even more evident
in several ways. The employment officer shall decide how the individual may
receive support in more areas than in simply finding vacancies. The
authority is also directly responsible for payment of compensation to the
individual. This has not been the case since the time for Cash Labour Market
Assistance (KAS) during the 1970s and 1980s. This group also sees a wide
variation; some individuals very quickly go on to support themselves while
others remain far from the labour market.
With the new groups, it is probable that the majority of hours will need to be
allocated to persons who are far removed from the labour market.
Jobseekers with competencies that match the demand of the labour market
will require manual service only to a limited extent. Employers too have a
need for support and service to different extents. The scope of the changes in
relation to previous assignments and how large they will be in the future is
difficult to quantify. The generation shift on the labour market now and over
the next few years combined with the changes in demand on the labour
market also affects Arbetsförmedlingen´s operations.
The report does not intend to provide answers pertaining to the
consequences of these changes but finds it important to highlight them. In
all likelihood there will eventually be consequences for how the employment
officer occupation is described, the need for specialization within the
occupation and competence requirements when recruiting new officers.
Page: 54 of 130
The report will now go on to discuss the labour market and the labour
market policy role for the functioning of the labour market by discussing the
assignment in terms of theory in chapter three and then analyzing the effects
indicated by the research of labour market policy in chapter four.
Page: 55 of 130
3 Functioning of the labour market
This third chapter is of a more theoretical nature than the first two.
However, Arbetsförmedlingen feels it is crucial to attempt to present a
uniting frame of reference for how the different tools of the labour market
policy are expected to influence the functioning of the labour market in an
overall perspective. For readers who are only interested in
Arbetsförmedlingen´s work tasks and results, reading only chapters two and
four is sufficient. For those trying to establish effective measures for
improving the functioning of the labour market, the model approach in this
chapter may form a base and frame of reference.
3.1 The matching model
Labour market policy is conducted in a very concrete context – the labour
market – and its basic task is to improve the functioning of the labour
market. The labour market is complex and difficult to get a full overview of.
To at least attempt to grasp how the labour market functions, and where it
could in some aspects function better through labour market policy
measures, there are good reasons to use a formalized labour market model as
a base. With a model approach it is also clear how different factors are linked
and how individual measures may affect wider parts of the market.
A labour market model which currently has a large impact in the research on
the functioning of the labour market is a search and matching model first
developed by Peter Diamond, Dale T Mortensen and Christopher
Pissarides.28 Like all models, it provides a simplified picture of reality and
makes assumptions which cannot always be verified. It gives a united
framework for how we might discuss the relation of the labour market policy
work to the functioning of the labour market. The model includes factors
such as the behaviour of the employer and employees, the matching
function, the fact that changes in unemployment are affected by the business
cycle and that matching is affected by frictions and lack of information. 29 It
supports the fact that a correctly focused labour market policy has an
important role to play in decreasing equilibrium unemployment30 on the
labour market.
A central idea in the model of the functioning of the labour market and the
determination of the unemployment is that the trade on the labour market is
uncoordinated, time consuming and costly for both employers and
They were awarded the Nobel prize in 2010 for their research.
The conclusions apply in 'equilibrium' and the adjustment process between two equilibriums
is not described in this section.
30 The equilibrium unemployment is the level of unemployment which is independent of the
state of the business cycle. The observed unemployment will also include the level of
unemployment which is dependent on the state of the business cycle.
28
29
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jobseekers. Employers and jobseekers must use resources of different kinds
before jobs can be created and production can commence. The matching is
influenced by heterogeneity, frictions, negotiations and lack of information.
This means that finding the right information before a matching is
associated with different costs.
The model predicts that there will always be unemployment, even in a state
of equilibrium. Existing jobs will be broken up and will generate a new inflow
to the unemployment whilst at the same time recruitment for other jobs is
on-going. Separations from employers are governed by shocks of different
kinds which affect individual companies. These can originate from changes
in demand or through technical developments. In more realistic versions of
the model, separations also occur through people changing jobs. The model
predicts that without policy measures the search activity will in all
probability be too low in equilibrium due to structural factors and that it is
possible to improve the matching through affecting the structures that cause
this. It also predicts that the number of places made vacant could be both too
large and too small to reach an optimum equilibrium on the labour market.
The chapter is arranged in accordance with the following; initially the model
framework is presented by introducing each of the central pillars. These are
the labour market tightness (or simply tightness), the matching function, the
dynamics of unemployment, the behaviour of the employer and employees
and the wage structure. Thereafter, they are balanced into a coherent model
framework. The chapters will present certain in-depth analyses which have
been deemed to be particularly relevant for the labour market policy
assignment. These in-depth analyses touch upon the matching process in
various ways, where information is in focus. The chapter forms a basis for
the indicators used and conclusions made in chapter four.
3.1.1 Labour market tightness
Employment usually occurs through the matching of a vacancy and a
jobseeker. This matching process can be formal or informal and can be
preceded by different active measures from the part of the employer or the
jobseeker. In reality, a vacancy need not have been advertised in any formal
way and the recruitment time may be zero. The jobseeker has not always
been a direct jobseeker but could have accessed the information in some
other way and been interested by the offer. We can however assume that the
total number of recruitments on the labour market usually come about as a
result of the employer advertising vacancies, formally or informally, and that
there is a relatively well-defined group of jobseekers who are potential
candidates for the vacancies.
Page: 57 of 130
With more vacancies in relation to the number of jobseekers, the chance of
gaining employment increases for the jobseekers whilst the chance of
successfully recruiting decreases for the employers. The opposite applies if
the number of vacancies decreases in relation to the jobseekers. The
situation on the labour market could therefore be described through relating
the number of vacancies to the number of jobseekers over time. With certain
reasonable presumptions, this simple observation leads to some interesting
conclusions.
The ratio between vacancies and jobseekers is usually referred to as the
labour market tightness, and is a first indicator that can be derived from the
labour market model. Tightness is a fundamental variable in this form of
labour market analysis. It is a measurement of how simple it is to find a
match for employers and jobseekers. There are congestion effects in either
the employer sector or the jobseeker sector, depending on whether the
tightness is high or low. It also introduces a significant difference compared
to previous unemployment models. Where the wage adjustment was
previously a determining factor for the instance of unemployment,
randomness is introduced as an important explanatory factor. In each
instance the possibility exists that an employer will not find a jobseeker, as a
jobseeker may not find an employer, and this possibility is dependent on the
wage offers available on the labour market. The rate of employment is
therefore somewhat limited by random events which the wage structure
cannot eliminate.
3.1.2 Tightness and the matching function
Tightness is as previously mentioned a fundamental variable. Just as
important to the analysis is how efficiently the structures on the labour
market connect jobseekers to vacancies. The research has shown that this
matching process can be characterized by a matching function where the
number of employments is determined by the number of vacancies and the
number of jobseekers (see references in Pissarides (2000)).
A simple formulation of the matching function is that the number of matches
occurring on the labour market is influenced by the number of jobseekers,
the number of vacancies and factors which make the pairing function better
or worse. A few examples of such difficulties could be lack of information, the
fact that not all jobseekers are aware of the vacancies that could be of
interest, that employers for various reasons choose to use channels that are
not available to all jobseekers, that there is a geographical spread in where
the supply and demand is or that there are differences in competence
requirements and the jobseeker's actual competence. To achieve a
functioning matching on the labour market it is crucial that the matching
Page: 58 of 130
function generates as many matches as possible given the number of
vacancies and jobseekers.
Recruitment periods are closely related to both tightness and the matching
function.31 With deterioration in matching, an increase should be expected in
both recruitment periods and unemployment periods which cannot be
explained by labour market tightness. The geographical spread of jobseekers
and vacancies, or the distribution of jobseekers and vacancies within
different occupations, can also affect the matching. But the periods can also
be extended as a consequence of changes in the business cycle, despite the
matching function being as good as it was previously.
3.1.3 The dynamics of unemployment
The change in unemployment between two periods is a direct relation
between the inflow of newly unemployed and the outflow. The
unemployment in the next period always equals the unemployment at the
start of the period plus the inflow during the period minus the outflow
during the same period. This connection is a basic link for all dynamic
systems. Therefore, the unemployment cannot decrease unless the outflow is
greater than the inflow and it always increases if the inflow is greater than
the outflow. If the inflow and the outflow are equal during a period, the
unemployment level will remain unchanged irrespective of the number of
people involved. A crucial factor for the development of the unemployment,
however, is what decides the scope of the inflow and outflow.
3.1.4 The outflow from unemployment
Persons can leave unemployment in favour of many different destinations. It
is primarily to work but could also be studies, parental leave, pension or
programmes. The model assumes, for the sake of simplicity, that the
unemployed primarily leave unemployment due to work. The purpose of
such a simplification is to create a basic understanding of how different
factors work together in deciding the development of unemployment, and in
many of these cases it is sufficient to study simplified contexts. As long as all
types of recruitment assignments count as a vacancy, the number of persons
leaving unemployment for work can never be greater than the number of
vacancies. The probability of finding work, the job chance32, is also
dependent on the number of people applying for the vacancies and how
efficiently the jobseekers are linked to the vacancies, i.e. the matching effect.
The model assumes that the job chance is constant during the
unemployment period and can be calculated as the product between
By dividing the number of vacancies with the number of new hires we get an estimate of the
average recruitment period.
32 Job chance is the term used in the labour market report. It can also be called transition
probability, hazard rate or incidence, often depending on the research area.
31
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tightness and the matching function. We therefore expect that the job chance
will decrease if tightness decreases or if the matching function deteriorates.
This is an obvious simplification. There is a negative duration dependence in
the job chance, that the chance of obtaining work is smaller for those who
have been unemployed for a long period of time.33 Arbetsförmedlingen´s
goal to prioritize those who are far removed from the labour market aims in
technical terms to prevent where possible this negative duration
dependence; to strive for a more constant job chance.
3.1.5 The inflow to unemployment
The development of unemployment is determined both by the outflow and
inflow to unemployment. The inflow consists of people who lose or leave a
job, leave studies or enter the employment market for other reasons. In the
simplified model, the inflow to unemployment is presumed to consist of
people leaving a job for various reasons, primarily due to termination of
employment. The inflow is in this case a direct function of the probability
that an employer must make staff redundant, which is governed by factors
related to the business cycle or the technical development.
3.1.6 The development of unemployment
This dynamic description of the labour market highlights two central factors
which are important in order to understand the functioning of the labour
market and the determination of unemployment. The unemployment is
dependent both on the separation from existing jobs and the entry to vacant
jobs. Consequently, the development of unemployment can be put in relation
to both the separation probability and the job chance, and thereby also in
relation to tightness, which makes the development of unemployment
dependent on the number of vacancies.34
The relation between unemployment and vacancies is called the Beveridge
curve. The Beveridge curve is one of the corner stones in search and
matching models and is used by many as an indicator of the matching
efficiency on the labour market. If the number of vacancies increased
without an accompanied decrease of unemployment, the curve would
experience an outward shift. This could be interpreted as a deterioration of
the matching efficiency. The interpretation however is ambiguous. The level
of the curve is not only dependent on the matching efficiency but it is also
This applies if no consideration is taken to individual characteristics. When considering the
fact that jobseekers are different and have different prerequisites on the labour market, it is not
as obvious that the job chance is falling over time, see for example Jansson (2002).
34 Note that an increase in employment requires that there are more jobs created than
destroyed. If the number of people who want to work is constant, unemployment can never fall
unless more jobs are created than are removed during a certain period of time. However, the
turnover of existing jobs has a significance for the periods of unemployment.
33
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dependent on the separation probability. An increased level of separation
produces the same qualitative outward shift of the curve and this cannot be
interpreted as increased matching problems.
3.1.7 The actions of the employer
New employment; matching, occurs when an employer and a jobseeker meet
and agree on an employment contract. Before this can happen, the employer
must create a vacancy and in some way advertise the vacancy so that suitable
jobseekers can apply.
There is a cost associated with the recruitment process which means that the
employer must consider whether it is financially viable to advertise the
vacancy. This consideration is called the job creation condition in the model.
The employer makes decisions based on its financial considerations and
there are no reasons to attempt to recruit for a position unless the employer
expects productivity or profits to increase as a result of this. No employer
creates unprofitable vacancies. The costs may for example be related to
advertising, but the selection process following the receipt of applications
and interviews with jobseekers are also associated with costs. The costs often
increase in relation to how qualified the position is, which the model also
takes into account.
The probability of an employer being contacted by a jobseeker is governed by
the matching function and the demand. The fact that other employers create
vacancies means that the competition for jobseekers increases and that the
stream of applications for each employer becomes thinner. This can lead to
increased recruitment costs as a result of the risk of the recruitment period
being prolonged. With lower recruitment costs, the number of vacancies the
employer is willing to advertise increases. With more interesting jobseekers,
the level of vacancies increases. This increases the prerequisites for
decreasing equilibrium unemployment. The amount of vacancies is therefore
dependent on both the business cycle and the expectation to reach qualified
jobseekers. A greater number of qualified jobseekers therefore have the
prerequisites for decreasing unemployment as a result of employers finding
the creation of new jobs more profitable.
To understand the difference between previous economic models which at a
fundamental level do not define unemployment in a convincing manner, the
difference here becomes clear. Historically, wages has been adapted to a level
where price and wage correspond. This is not entirely the case in the search
and match models where the employer must also balance recruitment costs.
This also means that there is a financial scope for negotiations and the final
wage level will be dependent on negotiation between the employer and the
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prospective employee. Both of these factors help to explain the presence of
unemployment.
In addition to the wage, the demand for labour is affected by interest rates,
the business cycle, recruitment costs and tightness. As far as
Arbetsförmedlingen is concerned, it is in particular the recruitment costs
which can be influenced; the other factors show the labour market policy's
dependence on other areas of politics in order to influence the
unemployment levels to a greater extent.
Employers do not simply employ people and create new jobs. There is also a
counteractive process whereby jobs are rationalized, phased out or
disappear. The separation occurs when the jobseeker changes jobs or when it
is no longer profitable to continue producing with the given technology.
Depending on how complicated the model is made, it is possible to introduce
a reservation productivity. This means, in principle, the lowest level of
productivity at which an employer can consider continuing with production.
Less productive jobs will be more likely to fall under this limit during an
economic crisis and are therefore more exposed to potential rationalization.
This level can be affected by several factors. It is for example possible to
maintain the larger part of these jobs by offering different types of subsidised
employments. It is also possible to compensate employers for employing
individuals who do not entirely meet the production demands placed on a
certain position.
3.1.8 The actions of the jobseeker
The jobseeker affects the results of the labour market by the way they look
for jobs and their behaviour in the setting of wages. People are different and
the model outlines implicitly include some of these differences.
Qualifications and interests decide within which occupations an individual
applies for jobs. Place of residence and family situation can affect where an
individual applies for jobs. Activity and energy may affect the choice of
search intensity and the access to different information channels can affect
which types of jobs an individual comes into contact with. The alternative
income, i.e. the income the person currently receives, is also significant for
how urgent the individual deems the job search to be. For the type of model
we are outlining in this chapter, which primarily abstracts occupations and
different parts of the labour markets, the choice of search intensity is of great
importance. More time spent on searching for work means that the condition
for finding more jobs increases. One way to subsequently summarize factors
such as travel costs, alternative income and qualifications, etc. is to discuss
in terms of reservation wage.
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The reservation wage is a central parameter in the discussion on labour
market economics; it reflects the lowest wage the individual requires in order
to accept a job offer. It is normally assumed to be dependent on at least five
factors35: Firstly, the probability of being offered a job. With greater access to
vacancies in relation to the number of jobseekers, the probability of a job
offer increases which means that the jobseekers are placed in an even
stronger position on the labour market. The possibilities for demanding a
higher wage therefore increase and thus the reservation wage increases.
Secondly, the spread of the wage distribution is of importance to the
reservation wage. A greater spread means that the individual can raise
his/her reservation wage since there is improved conditions for receiving a
better wage offer when the wage spread is greater. Thirdly, the individual's
time preference, i.e. the extent to which the individual values a given income
today against waiting for the possibility of obtaining a higher income, is
significant. Those who can wait longer usually have a reason to set a higher
reservation wage.36 A fourth factor is the income the individual earns in
parallel to the jobseeking. The higher this is, the higher the reservation wage.
Employees do not normally lower their wage when changing employer. The
same can be said to apply to those who receive unemployment
compensation. Factors such as the value of leisure time or the fact that the
individual can find employment on a secondary labour market or unofficial
work affect the reservation wage. Ultimately, there is good reason to evaluate
a new job based on the risk of becoming unemployed. This particularly
applies to those who already have a job. With a high risk of becoming
unemployed at a later stage, there are reasons against raising the reservation
wage.
The individual's decision therefore involves factors which are similar to those
of the employer; i.e. income (primarily wage or unemployment
compensation), access to jobs and other jobseekers (tightness), the
probability of losing a job (the probability of separation) and time
preferences (interest). A discussion of reservation wage does not result in an
immediate indicator. Indirectly however, it is obvious that the reservation
wage in itself is affected by factors which are easy to measure and which are
important in relation to the employer's ability to obtain jobseekers for their
vacancies. The search intensity, particularly in terms of the number of jobs
applied for and to a certain degree how much time is spent on searching in
each time period are indicators which relates to the individual's actions on
the labour market. Here is also a very clear connection to the commission
Arbetsförmedlingen has been given within the scope of the unemployment
insurance. Arbetsförmedlingen should act in such a way that the indirect
See for example Devine & Keifer (1991)
Time preferences shall not be confused with present or future income; that persons with a
good income can afford to wait longer, for example. The time preference is a measure of the
form of personal orientation, where some people (in psychological terms) have a need for a
more immediate reward than others.
35
36
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behavioural consequences of a generous unemployment compensation do
not affect the functioning of the labour market in a negative way.
3.1.9 Wage structure
The last basic relation in determining equilibrium unemployment in the
matching model is how wages relate to tightness (the connection is called the
wage curve). This is decided in connection to the wage bargain.37
The fact that individuals have a minimum wage under which they are not
willing to work is sometimes limiting, sometimes not. In an equivalent way,
the employer has a maximum wage over which they cannot afford to employ
a person. For an employment to come about, the wage the employer is
willing to pay must be at least equal to the one the jobseeker is willing to
accept. In the most simple model form it is assumed that the wage is set as a
balanced average between the individual's net profit of accepting the job and
the employer's net profit of hiring the individual. But there are different
types of wage setting models where the relative strengths between the
jobseeker and the employer determine the results. This relative strength
likely varies with the level of jobseekers in relation to the number of
vacancies and how good the unemployed are as replacements for those who
are presently employed.
The factors which are of special importance for the wage set in a matching
are: the relative strength between employer and jobseeker, the level of the
unemployment compensation and tightness. With more vacancies in relation
to the jobseekers, the wage increases as the employer has a more difficult
time attracting labour. Furthermore, it can be established that the wage is a
balanced average between the unemployment compensation and the average
recruitment cost. Higher prices will also lead to higher wages. In the model
this will result in a wage curve which replaces what in previous economic
theory has been called the supply curve for labour.
3.1.10 Aggregate of the model's components
The search and matching model of the functioning of the labour market
which we have chosen to discuss in this section of the labour market report
has crystallized three main connections in order to determine equilibrium
unemployment. These are the wage curve, the job creation condition and the
Beveridge curve.
The wage curve: The shape and position of the wage curve is determined by
three parameters in the most simple model formulation. These are income
Please note that the wage structure is described on a micro level in the meeting between
employer and employee.
37
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during unemployment, the bargaining power and the recruitment costs.
Arbetsförmedlingen has tools to partially affect all three of these factors.
Arbetsförmedlingen can monitor that the jobseekers do not have any income
other than the unemployment compensation. Arbetsförmedlingen can also
activate unemployed persons who seem to highly value the actual
unemployment and therefore stipulate an unreasonably high reservation
wage. Arbetsförmedlingen can also affect the jobseeker's qualifications
through training efforts, for example, which in this context can change the
bargaining power. Ultimately, Arbetsförmedlingen can in different ways
affect employers' recruitment costs.
The job creation condition: The job creation condition is determined by the
marginal product for the work effort, wage, interest, level of separation,
matching function and the recruitment costs. Here, the tools of
Arbetsförmedlingen are somewhat more limited. We can influence the
matching function and the recruitment costs. We can also affect the
employee's marginal productivity through training efforts or subsidies, for
example.
The Beveridge curve: The Beveridge curve is determined by the separation
probability, labour market tightness and the matching function. In this case
Arbetsförmedlingen has significance, primarily by affecting the matching
function.
These three connections together determine the level of the unemployment
equilibrium. As the same entities reoccur in several of the main connections
and sometimes with opposing effects, the final effect on equilibrium
unemployment is not always obvious. In many cases, the effect becomes an
empirical question. Under normal conditions, however, we can expect that
improvement in the matching function, lower recruitment costs, efforts
which increase the jobseeker's qualifications and a thoroughly implemented
monitoring function lead to a lower level of equilibrium unemployment
(Table 3.1). The level cannot be quantified at present but there are reasons to
continue developing a model to describe probable scenarios during different
policy measures.
Affecting the matching function, the recruitment costs, the monitoring
function and the jobseeker's marginal productivity can be rationalized in
terms of efforts which Arbetsförmedlingen offers and works with. These
could include increasing the search activity, using the unemployment
insurance as a readjustment insurance, minimizing information
uncertainties, increasing flexibility, levelling out qualification requirements
and affecting the relative costs between the jobseekers through subsidies.
But it is also obvious that the level of equilibrium unemployment can also be
affected by factors which the labour market policy is not intended to affect
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but which lie within the area of responsibility of other authorities or
legislative bodies. The tools for affecting wage structure and the separation
level, for example, are limited, and changes in these are exogenous in the
operations.
Table 3.1 Expected effect on the level of unemployment equilibrium during
different labour market policy efforts
Labour market policy effort
Improved matching function
Lowered recruitment costs
Increase in the jobseeker's marginal
productivity
Improved monitoring function
Expected effect on
equilibrium unemployment




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In-depth
Is the search activity at a too low-level?
An important implication of the model which has been described in this
section is that the search intensity is nearly always too low to reach the
effective equilibrium on the labour market. The reason for this is that
unemployed jobseekers have a disadvantage in the matching on the labour
market in relation to those already employed, as they are excluded from the
wage negotiations. The yield from the jobseekers is not as high as it would be
if everyone had the same conditions, which can result in lowered incentives
for searching more actively. There is a very clear connection between the
search activity and the chance of finding a job where the activity increases
with better access to jobs and a decreased activity when the number of jobs is
fewer (Harkman and Jansson, 1995).
The low-level of search activity warrants some form of policy measure. One
way is placing demands on the jobseekers to increase the level of their search
activity. In terms of welfare theory however, this is obviously not ideal as it
entails a loss of welfare for the jobseekers. The search activity follows the
number of vacancies, and the amount of vacancies can be said to be too few
due to limitations in the negotiation process rather than among the
jobseekers. Note that the discussion does not presuppose that the jobseekers
are lazy or disinterested in finding a job; it builds on the fact that the
structures on the labour market do not make it profitable to increase the level
of search activity as this does not increase their job chances to the same
extent. The extra cost which comes with an increased search effort is simply
not counterbalanced by a corresponding increase in job chance for the
individual. An alternative approach is to build up an information structure
which increases the matching probability between jobseekers and vacancies
and thereby decreases the costs of the search effort.
This reasoning differs from that which is often conducted in connection with
labour market policy; that monitoring efforts will increase the jobseeker's
search activity. Checking that jobseekers receiving unemployment
compensation are at the labour market's disposal is important but the positive
effects do not come from an increased search activity but through holding
back the jobseeker's reservation wages. A potentially more important method
is to offer alternative search technologies which enable employers and
jobseekers to find each other at a lower cost. This provides the same results as
an increased search activity without necessarily being one. The matching can
be improved without the jobseekers having to put in more time or apply for
more jobs, which would then also be a positive effect of the use of labour
market policy instruments.
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3.2 Information in the matching process
3.2.1 Information and the internet as a recruitment
channel38
Information is the decisive link between jobseekers and employers in the
matching process. It is neither homogeneously divided nor free. Jobseekers
read advertisements and submit applications, contact companies about
vacancies, use Arbetsförmedlingen, attend careers fairs, submit CVs, utilize
contacts through school or labour unions, ask family, friends, acquaintances
and keep their eyes open for interesting offers. Like jobseekers, the employer
needs to send and collect information in order to fill vacancies. Employers
publishes advertisements and communicate which qualities they seek, the
requirements they impose and what they can offer the person becoming
employed, whilst at the same time collecting information on available labour.
The extent to which jobseekers and employers use the internet is increasing
both as a source of information and to communicate information which may
also exist in other channels. In order to discuss the use of internet as a search
channel is it important to acknowledge this duality that the jobseeker's and
employer's strategies and efficiency in the search process affect each other
and must be examined together.
In a bilateral analysis39 of the labour market both employers and jobseekers
are active in collecting and evaluating information. Jobseekers can seldom
chose from a multitude of job offers without first making their productivity
and availability known to employers. Jobseekers with a high level of
productivity can communicate their competence with certificates and
personal letters. There is therefore an incentive for jobseekers with a lowlevel of productivity to add a similar or equivalent communication in an
attempt to become employed in highly productive jobs. When this is done,
the communication becomes unusable to the employer as it no longer helps
them sort between high and low productivity labour. A consequence of lower
application costs is that jobseekers submit more applications than
previously. International research exists which shows that employers
experience an unmanageable amount of applications from both over and
under qualified candidates (Autor, 2001).40
The section is based on Fountain (2005). Also see Autor (2001) and Ioannides and Loury
(2004).
39 In a unilateral analysis of information dissemination, it is expected that easier access to more
information about vacancies increases the possibility to consider more potential jobs and
increases the probability of finding better jobs. Productivity should then increase, with a higher
wage as a result, leading to a decrease in the desire to leave the job. The matchings will therefore
improve with lower search costs and the value will increase both for the individual and for
society.
40 Here, the distinction between quantitative and qualitative information will be clear. The fact
that many employments come about through personal contacts is known to be an effect of the
employer seeking methods of handling adverse selection in the application process. If internet
applications make adverse selection worse, one consequence could be that personal contacts
become even more important on an online labour market (ibid.).
38
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In a world where information comes at no cost, the employers who can
collect the most amount of information about a potential jobseeker have the
best conditions to achieve a good matching. But the collection of information
is often costly. It is difficult to choose the best candidate based on certificates
and the employer's opinion. The employer also wants to know about the
applicant's reliability, work capacity, function in the work group, personality
and other qualities which are difficult to quantify in writing. These are best
assessed in an interview, though this method does not provide guaranteed
accuracy. Some of this information can be collected through referees deemed
reliable by the employer who know of the applicant's qualities. In such cases
the employer may prefer applicants which have been recommended to them
through personal contact networks, which decreases the need for scrutiny
and thereby the total costs of recruitment.
The abundance of information for jobseekers paradoxically creates a lack of
reliable information for employers. It could also be the case that the internet
has changed the form of the search processes but not necessarily their
substance. Jobseekers and employers still have the need to communicate
useful information about themselves, and even if the internet provides new
channels for finding this information, the central problem remains; the
difficulty of evaluating information in order to reach a good match. There is
an opposition between quality and quantity which becomes clear in the case
of jobseeking online. More information is not necessarily better.
What are the implications of this in Arbetsförmedlingen´s work regarding
the matching process? The general view is that the matching on the
aggregated level is improved by the transparency which occurs through the
internet but also that it does not benefit all groups (Autor, 2001). In the
article, he discusses the institutional response to the matching difficulties
which come with an increased use of the internet as an information channel.
He highlights three functions which an intermediary could contribute by
communicating reliable, qualitative information over the internet. 1) to select
"talent" by making searches and selections for employers, 2) to build a
reputation on the market, something which is difficult for individual
jobseekers to do on a larger scale, 3) to communicate qualitative and reliable
data on jobseekers.
Since much of this function relates to the market and is possible to run for
purposes of profit, there is a clear challenge here for Arbetsförmedlingen.
There will constantly be an elimination of jobseekers and a number of
persons who do not assert themselves in the selection process. Guaranteeing
that all jobseekers can access the labour market based on their own
preconditions is a task that is not always market-related and therefore
necessary to solve with jointly financed efforts. The task of equipping
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individual jobseekers and raising their qualifications will possibly become an
even more important function for society to solve in order to make as many
jobseekers as possible attractive on the labour market. Solving the tasks in 2)
and 3) above will probably require a strategy for balancing the competition
which may arise from other providers, and at the same time, persons coming
to Arbetsförmedlingen for support not being stigmatized.
3.2.2 Search channels
The search and matching model which was described initially has during
later years developed in order to take into consideration that jobseekers and
employers use several recruitment channels when searching for jobs and
employees respectively (Cahuc and Fontaine, 2009). By separating the use of
formal channels in the model, such as advertisements, employment offices
and the internet and informal channels such as personal networks, tentative
conclusions of special relevance for labour market policy considerations can
be made. The starting point is that formal channels can provide a
fundamentally better matching quality as they generate a greater selection of
applicants, though these are associated with higher costs, and informal
channels often generate a sufficient amount of applicants at a low cost.
Cahuc and Fontaine (2009 notes that the choice of search channel is
dependent of how many use the channel and that this is mutual for both
employer and jobseeker. The employer has few incentives to use
advertisements in the daily press if no jobseekers read these papers, and
there are few reasons to read these advertisements if no employers advertise
vacancies through this channel. The parallel to Arbetsförmedlingen is that
the value of reporting a vacancy to the Employment Service is dependent on
which jobseekers use the channel and the value of using Arbetsförmedlingen
as a jobseeker is affected by which vacancies are reported. The choice of
search strategy can therefore be struck by coordination problems, which is a
form of market failure. There is a risk of employers and jobseekers either
overusing informal contact networks or that they are not used enough. Both
situations present a disadvantage for the collected matching on the labour
market. If informal contact networks are underused and formal methods are
used instead, the risk is that the search costs are higher than they would
need to be as this search method is more expensive.
By creating incentives for using different search channels in a, for society
well-balanced form, the matching efficiency could be increased. The
examples presented are that the unemployment compensation is clearly
connected to the use of formal channels, if this is a desirable development,
whilst employers are given clear incentives to use the same formal channels
through some form of subsidy. From the jobseeker's point of view, this view
is somewhat too limited as the model assumes that only unemployed people
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are looking for jobs. In order to become universally applicable, people
without unemployment compensation would in some way be motivated to
use the same search channel. From the employer's point of view, the authors
mentions the subsidies as a monetary compensation but it is likely that
different services connected to the use of the channel can be regarded in an
equal way under certain circumstances. As discussed above, the cost of
recruitment is not comprised solely of advertisement costs; also included are
selection costs and the risk of making wrong recruitments - factors which are
at least as vital in the choice of recruitment channel. The fact that the search
providers on both supply and demand sides are given incentives to use the
same collective channel is nevertheless crucial. Monitoring the number of
vacancies reported to Arbetsförmedlingen is a way of indicating this
development, as well as the proportion of jobseekers who use
Arbetsförmedlingen as a search channel.
3.2.3 Coaching
Cahuc and Barbanchon (2010) present a model for coaching within the scope
of an equilibrium model. In the analysis it is assumed that those receiving
coaching experience an increased stream of job offers and that this increases
their job chances. The increased stream of offers means that those who do
not receive coaching receive a reduced stream. If those receiving coaching
also increase their reservation wages during the coaching effort, this will
involve a slightly lower level of employment than usual due to the increase in
wage level. The higher wage level means that there are fewer jobs created
than previously. At the same time, the stream of jobs increases and the
collected effect is not unequivocally determined. The model suggests that
with a relatively low proportion of persons receiving coaching, the increased
outflow speed will dominate, whereas the wage effect dominates when the
range is high. Studying the socio-economic effect, however, it is thought that
this will always lead to increased welfare in the short-term, under the
assumptions made in the model. They also find that temporary measures
have a better effect than permanent measures. The reason is that if the
measure is permanent, the unemployed are expected to adjust to the
occurrence of coaching measures. The mechanism is that in face of
temporary changes, they lower their demands on work in line with the
stream of job offers falling but they continue to have high demands in face of
a permanent change as they expect to have access to an effective coaching
measure in the future.
An observation from this is the importance that the measures in themselves
do not entail jobseekers placing higher than usual demands on a job as this
entails a risk of negative consequences for unemployment as a whole. The
research also indicates that coaching measures should not be used as a
general instrument for all; rather it should build on certain criteria, where
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the jobseeker can be considered far removed from the labour market and
receiving a limited stream of job offers to begin with. A policy which seems
successful initially does not necessarily remain as such if it becomes
permanent.
3.3 Summary
This section has presented a model for the functioning of the labour market
and how labour market policy can influence equilibrium unemployment by
affecting different structures. Several stylized facts have crystallized and a
number of possible indicators have also appeared. In the next section, this
knowledge will be used to determine whether the efforts made within the
labour market policy have been focused so that it is plausible to expect
positive effects on the functioning of the labour market.
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4 The results of labour market
policy
Filling vacancies is an important part of the matching commission
Arbetsförmedlingen has received. As was evident in the presentation in
chapter two, the commission given by the Government contains a lot more
than this. The commission includes supporting matching for jobs both
through monitoring functions and different efforts by means of support for
jobseekers, advice, counselling, support in writing a CV and training in
jobseeking, referrals to work, coaching, the Employability Rehabilitation
Programme and other programme efforts. Arbetsförmedlingen also procures
private providers and conducts ground work for jobseekers before they are
eligible for the services of a private provider.
The commission of Arbetsförmedlingen requires a close collaboration with
other organizations, authorities, municipalities and companies which occurs
via Labour market councils, Trade councils, Service co-operation and Cooperation agreements with Försäkringskassan, Samhall and the Swedish
Prison and Probation Service. Ultimately, Arbetsförmedlingen has a sectorial
responsibility for disabled issues within the labour market policy.
The discussion in chapter three also shows that the evaluation of the labour
market policy cannot solely be made in terms of the number of vacancies
filled. Labour market policy has many indirect effects which are difficult to
measure but which benefit the whole labour market and therefore also
society. By affecting the search intensity, the qualification level, the
likelihood of making contact, the jobseeker's demands, the dissemination of
information, the flexibility on the labour market or the handling of the
jobseeker through various subsidies paid out to employers, the functioning of
the labour market as a whole can be improved.
The report is concluded in this chapter with an analysis of which effects of
labour market policy the research has demonstrated. The analysis is also
formed by referring to indicators which in chapter three have been pointed
out as central in order to achieve an efficient labour market. The chapter has
been divided into six different sections which describe the functioning of the
labour market through indicators: Measures for our target groups, Improved
matching, Cost efficiency, Modes of delivery and Special assignments. Some
of these sections are information-heavy, which reflects which parts of
Arbetsförmedlingen´s operations the research has focused on. Other parts
do not rely on research at all. The chapter is concluded with a summary of
further knowledge requirements. The section can be viewed as an attempt to
give a basis for a future balance between which parts of the authority's
commission are evaluated, which does not exist today.
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4.1 Functioning of the labour market: indicators
Arbetsförmedlingen´s possibilities of filling vacancies and affecting the
development of the unemployment periods have a strong connection with
what is in chapter three called the labour market tightness. This measures
the number of vacancies in relation to the number of jobseekers. With a lot of
vacancies per jobseeker, the chances of finding work increase for the
unemployed and the unemployment periods fall, but the recruitment periods
tend to become longer for the employers. Having been subjected to falling
labour market tightness over a period of several years, the curve has begun
climbing again in 2010 (Diagram 4.1). There are also indications that the
matching could possibly have deteriorated on the labour market. This is
what the Beveridge curve, under certain simplified presumptions, would
indicate (Diagram 4.2).41 The Beveridge curve has tended to shift outward
and lies on a curve outside that which applied during the 1980s and 1990s.
However as chapter three presented, there are several reasons other than the
matching efficiency for the shift in the curve. An increase in the number of
separations from jobs also has this effect and this has not been constant
during corresponding periods. For example, there are signs that the
separation level was higher during the 2000s than during the 1990s, at least
for expanding companies (Diagram 4.3). This gives some support for the
existence of such factors working in the background, even though we cannot
confirm them in this report.
The job chance has, which is to be expected based on the development of
labour market tightness, been falling over several years and turns upwards in
2010 (Diagram 4.4). However, the development is not evenly distributed.
The job chances for those with the longest registration periods are noticeably
worse than for persons with short registration periods. The labour market
policy has little ability to affect the great fluctuations. On the other hand, it
is possible to affect the spread between different persons with different
periods of unemployment.
The development of unemployment is governed by the relationship between
the inflow to and the outflow from unemployment. Diagram 4.5 shows how
these relates to each other. It is clear that the inflow and outflow are close in
line with each other but with periods of differences in level between them.
The unemployment rises during periods when the inflow is greater than the
outflow and it falls when the outflow is greater than the inflow. It is also
interesting to note that the level of the in and outflows varies in ways similar
The adaptation of the Beveridge curve within an upturn of the business cycle usually shows a
anticlockwise loop. This adaptation was evident during the second half of the 1980s. It is too
soon to comment whether the development of recent times will return to the previous curve or
settle on a new outward shifting level.
41
Page: 74 of 130
to the level of unemployment. When unemployment is high, both the in and
outflow tend to be high and the opposite applies when the unemployment is
low. During the rapid rises we have seen in unemployment, e.g., during the
beginning of 1990s and during the second half of the 2000s, the inflow has
risen drastically in comparison to the outflow.
The outflow is also related to the access of vacancies even if the concordance
is not exact since many jobseekers that leave Arbetsförmedlingen do so in
favour of things other than work. Many new hires occur during a year
(Diagram 4.6). Even during 2009 which was a year with great labour market
difficulties, 1.1m new recruitments were made. During 2010 the number
amounted to 1.2m. This is the equivalent of a quarter of all employed
persons.
The inflow to unemployment originates from several sources. One such
source is young people entering the labour market. Another is people losing
their jobs. The number of redundancy notices is often an indicator of how
unemployment will develop over the next six months. The two substantial
rises in unemployment we have seen in 1991 and 2009 were preceded by
large increases in the number of employed issued with redundancy notices
(Diagram 2.2). On the other hand, the change in unemployment is affected
to a relatively small extent by those receiving redundancy notices becoming
unemployed. Less than half, perhaps only a third, of those affected by
redundancy notices register with Arbetsförmedlingen during the coming 9
months (Jans, 2009 and Arbetsförmedlingen 2010a).
Employers use both formal and informal search channels when they recruit
(Table 4.1). Arbetsförmedlingen is the most used formal recruitment
channel. However, the proportion of vacancies reported to
Arbetsförmedlingen varies with labour market tightness. When the number
of vacancies are more in relation to the number of applicants it becomes
more difficult to come into contact with applicants and the number of used
search channels is increased. A greater proportion of the vacancies are thus
reported to Arbetsförmedlingen (Diagram 4.7). A majority of employers,
however, use informal channels when they recruit.
Jobseekers also use several channels when they look for jobs. In a special
commission from Statistics Sweden which applies to the last quarter of 2010,
it emerges that Arbetsförmedlingen is the most common search channel for
unemployed, which seems natural. A great part of the jobseekers use
employment officers when they look for jobs but the majority of them use the
job databases which Arbetsförmedlingen offers online (Table 4.2). 7 out of 10
unemployed use the internet as a search channel. Many also use other job
databases. Half of the jobseekers states direct contacts with an employer as
their method and every fourth unemployed person states that they look for
Page: 75 of 130
work by asking friends and acquaintances. On average the unemployed use
three different search channels. The number of employed persons who have
searched for jobs is approximately as many as the unemployed. However,
they use fewer search channels; two on average. The two most common
channels which are both around 40 per cent are Arbetsförmedlingen´s job
databases and direct contact with employers.
The indicators show how the labour market has developed. The development
is largely governed by aggregated factors which can only be marginally
affected by labour market policy. As shown by the model framework in
chapter three, it is however possible to follow certain key factors in order to
assess if the labour market policy has been such that we should expect
positive effects on equilibrium unemployment. Chapter four discusses the
question of the matching efficiency from such a perspective.
Diagram 4.1 Labour market tightness
Tightness Arbetsförmedlingen
Tightness
Tightness SCB
0,5
0,4
0,3
0,2
0,1
Source: Arbetsförmedlingen and Statistics Sweden.
10
20
09
20
08
20
07
20
06
20
05
20
04
20
03
20
02
20
20
01
0,0
Page: 76 of 130
Diagram 4.2 Beveridge curves 1979-2005 and 1987-2011 (March), monthly data
with 12 months sliding mean values
Old definition of unemployment
Vacancy
New definition of unemployment
0,014
1979
0,012
1987
0,01
2011
0,008
0,006
2005
2005
0,004
0,002
0
0
0,02
0,04
0,06
0,08
0,1
0,12
Unemployment
Source: Statistics Sweden and Arbetsförmedlingen.
In the Statistics Sweden data, the unemployed are 16-64 years of age, in accordance with the old
and new unemployment definition. Vacancies are in relation to the old and the new labour force
respectively.
Diagram 4.3 The degree of separation and new hires on the Swedish labour
market 1990-2008.
Recruitments (HR)
New
Exp.
Decr.
Stable
Procent
18
16
14
12
10
8
6
4
2
0
1
0
99
1
/9
1
2
99
3
/9
1
4
99
5
/9
1
6
99
7
/9
1
8
99
9
/9
2
0
00
1
/0
2
2
00
3
/0
2
4
00
5
/0
2
6
00
7
/0
Page: 77 of 130
Separations (SR)
Closed
Procent
Exp.
Decr.
Stable
/0
7
20
06
/0
5
20
04
/0
3
20
02
/0
1
20
00
/9
9
19
98
/9
7
19
96
/9
5
19
94
/9
3
92
19
19
90
/9
1
20
18
16
14
12
10
8
6
4
2
0
Source: Jans (2011)
Diagram 4.4 The probability of transition to a job, The job chance in total and
divided into duration since registration.
0-419 days
420-730 days
>730 days
Average
Proportion
0,16
0,14
0,12
0,1
0,08
0,06
0,04
0,02
-9
ja 6
n9
ja 7
n9
ja 8
n9
ja 9
n0
ja 0
n0
ja 1
n0
ja 2
n0
ja 3
n0
ja 4
n0
ja 5
n0
ja 6
n0
ja 7
n0
ja 8
n0
ja 9
n1
ja 0
n11
ja
n
ja
n
-9
5
0
Source: Arbetsförmedlingen.
Note: The time is calculated as the combined period in unemployment or programme with
activity support.
Page: 78 of 130
Diagram 4.5 In and outflow and changes in the proportion. The diagrams relates
to persons in a continuous sequence of unemployment and programme.
Stock
Amount
700000
600000
500000
400000
300000
200000
100000
Inflow
-1
0
ja
n
-0
8
ja
n
-0
6
ja
n
-0
4
ja
n
-0
2
ja
n
-0
0
ja
n
-9
8
ja
n
-9
6
ja
n
-9
4
ja
n
ja
n
-9
2
0
Outflow
Amount
100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
Source: Arbetsförmedlingen. Data per month with trends removed.
-1
0
ja
n
-0
8
ja
n
-0
6
ja
n
-0
4
ja
n
-0
2
ja
n
-0
0
ja
n
-9
8
ja
n
-9
6
ja
n
-9
4
ja
n
ja
n
-9
2
0
Page: 79 of 130
Diagram 4.6 Number of new hires, by total, entries and changes of employer,
1994-2010.
Entries
Changed employer
New hires
Amount
400000
350000
300000
250000
200000
150000
100000
50000
10
20
08
20
06
20
04
20
02
20
00
20
98
19
96
19
19
94
0
Source: Statistics Sweden (special treatments of LFS)
Diagram 4.7 The Employment Service's proportion of vacancies (new hires),
1990-2010
60
Per cent
50
40
30
20
10
Source: Arbetsförmedlingen and Statistics Sweden.
10
20
08
20
06
20
04
20
02
20
00
20
98
19
96
19
94
19
92
19
19
90
0
Page: 80 of 130
Table 4.1 The recruitment channels used by employers
Advert in
Advert
News or
online
trade press
The Audit Office
2010
Ekström 2001
16.5%
25%
The empl. Private
Services
actor
Informal
channels
32.5%
7%
68%
39%
4%
65%
26%
Source: The Swedish National Audit Office 2010.
Table 4.2 The search channels used by jobseekers
AF contact
AF searched themselves
Other job banks
Private AF
Direkt contact employer
Advert - replied/posted
Advert - red
Friends and family
School, interview
Waited, only registered AF
Totalt number of people and
average number of used
search channel
Employed
Antal
29,000
150,200
121,200
24,600
154,900
68,600
91,700
63,600
14,200
26,200
Andel
8.2
42.5
34.3
7.0
43.8
19.4
25.9
18.0
4.0
7.4
353,500
2.1
Unemployed
Antal
Andel
130,400
35.1
264,900
71.3
160,400
43.2
34,200
9.2
167,500
45.1
71,100
19.1
105,900
28.5
95,000
25.6
18,500
5.0
42,900
11.5
371,500
2.9
Source: Special commission from LFS, Q4 2010.
4.2 Measures for our target groups
Arbetsförmedlingen´s customers are satisfied with the support they
receive.42 90 per cent of employers who have advertised a vacancy state that
they are satisfied with the service they received. 60 per cent of the jobseekers
who have gained employment state that they received the support or aid they
needed from Arbetsförmedlingen. For those who are still registered with
Arbetsförmedlingen, 81 per cent state that they are satisfied with the service
they have received. For those who have participated in efforts supplied by
private providers, 76 per cent state that they are satisfied with the activities.
78 per cent of participants within the Job and Development Programme
42
Applies to persons who have answered completely or partially satisfied in the survey.
Page: 81 of 130
state that they are completely satisfied. These are important figures for
Arbetsförmedlingen´s ability to work in an efficient way and a sign that the
measures are perceived as meaningful among our target groups. The fact that
not everyone is satisfied with the support they received is ambiguous. One
part of the operations exercises public authority. A correct application of the
commission within the unemployment insurance which entails a suspension
from compensation will hardly be experienced as positive for the concerned
individual. From a societal perspective however, the actions are necessary
and lead to positive results in the long-term through improved matching. In
this section and the coming sections, we will study this in more detail and
deepen the analysis of the actual affects beyond the customer benefits.
A starting point for evaluating the effects of labour market policy is to assess
whether it is directed at weak groups and persons who are deemed to have a
greater need of accessing labour market policy resources. By using a so called
profiling instrument it is possible to, based on statistical qualities, create a
division of the jobseekers in groups with different difficulties on the labour
market and thereafter follow-up whether they have access the programmes
available at Arbetsförmedlingen. The labour market report presents two such
indicators. One applies to early efforts for newly registered unemployed
persons, the other applies to efforts directed at persons entering into the Job
and Development Programme.
There is a very clear pattern that in the cases where programme efforts are
implemented at an early stage, they are directed at persons who to a large
extent are profiled as persons with a more difficult situation on the labour
market (Diagram 4.8). From a policy perspective, we can draw important
conclusions from this. One is that Arbetsförmedlingen directs resources to
jobseekers that are also identified by the profiling model. Given that the
profiling instrument has a good level of accuracy, which Forslund et al.
(2007) claims, there are allocation profits to be made if employment officers
are given a greater leeway to make decisions on when different persons
should be offered initiatives. It would leave a space for implementing
measures at an early stage for some individuals and delay the entry for other
persons who are assessed to have greater possibilities of seeking jobs
themselves. The current framework means that the measures risk being
delayed until its guarantee periods are achieved, that is three months for
young people and over a year for others with unemployment compensation.
For many individuals, the return to working life is unnecessarily delayed.
Långtidsutredningen (the Swedish Long-Term Survey) 2011 (SOU, 2011)
draws the same conclusions. It is also possible to let the employment officer's
assessment run alongside the profile assessment in order to strengthen the
employment officer in their argumentation to give certain persons earlier
efforts and let others wait longer.
Page: 82 of 130
The profiling instrument also identifies the job chances for participants in
the Job and Development Programme in a clear manner (Diagram 4.9). In
the analysis, individuals entering into the Job and Development Programme
have been profiled and then been followed-up six months later. It has
become evident that those assessed to have poorer preconditions in the
profile model also gain employment to a lesser extent. This has to some
extent been counteracted with individual recruitment incentives, through
Arbetsförmedlingen arranging subsidised jobs for these persons to a larger
extent. Through subsidised employments, the differences in job chances
have been compressed so that the differences between the different groups of
jobseekers have decreased. The New start jobs, where Arbetsförmedlingen
does not influence who is given the subsidies, on the other hand, are offered
to the relatively stronger persons in the Job and Development Programme.
This provides the tendency to increase the spread in job chances between
persons who are relatively closer and persons who are the furthest away from
the labour market, rather than decrease it.
Diagram 4.8 Early identification, newly registered who have started a
programme early, October-December 2010.
0 - 13 weeks
14 - 26 weeks
Per cent
16
14
12
10
8
6
4
2
0
Poorest job
chances
Somewhat better
job chances
Better job
chances
Best job chances
Page: 83 of 130
Diagram 4.9 Outflow to work from the Job and Development Programme
divided into groups with different preconditions for all those who have
participated during 2010, on average, weeks 1-26
Work without support
1,6
New start job
Work with support
Procent
1,4
1,2
1
0,8
0,6
0,4
0,2
0
Poorest job
chances
Somewhat better
job chances
Better job
chances
Best job
chances
4.2.1 Effects of measures and programmes
As in previous labour market reports, an indicator over the employment
effects of three main groupings of programme efforts are presented. It
applies to individual recruitment incentives, vocationally oriented
employment training and job experience. The general conclusion is that
individual recruitment incentives are the measure with the best effect on the
chances of the jobseekers finding employment. Thereafter, employment
training has had the best effects if we disregard years of weak economic
development and finally work experience placements which on average have
had a positive if modest effect. We will in this section deepen this analysis
somewhat, partly by using results from the Swedish Long-Term Survey 2011
which is the most updated summary available today, partly from an
exposition of literature which Arbetsförmedlingen has performed around the
matter of long-term effects of labour market programmes (Taslimi, 2011).
Page: 84 of 130
Diagram 4.10 Employment effects after a year from participating in programmes
starting 1992-2009
Job experience
35
Labour market training
Work with support
Percentage points
30
25
20
15
10
5
0
1992
1994
1996
1998
2000
2002
2004
2006
2008
-5
The Swedish Long-Term Survey 2011 studies evaluations of the effects of the
employment training from the 1980s through to the 2000s. The effects have
taken a swing over the decades. During the 1980s the effects were positive,
during the 1990s they were non-existent or in some cases negative and
during the 2000s positive again, besides the last few years when the
employment effects have been small again. This pattern corresponds well
with the long-term analysis that the Labour market report's indicator over
programme effects show (Diagram 4.10), even if the mid-1990s showed weak
but positive effects, which differs from evaluations from the 1990s. 43
The Swedish Long-Term Survey 2011 highlights a number of explanations
for why the effects improved during the 2000s. One is rules, or management
by objectives. From 2000 to 2007 there was an objective for the employment
training that 70 per cent of those who accomplished vocationally orientated
employment training would have a job within 90 days of concluded training.
They point to two effects of such an objective, firstly that Arbetsförmedlingen
has likely tried to a large extent to identify those who are really supported by
the training, secondly that it will probably be more selective in which
training programmes are offered. Furthermore, the Swedish Long-Term
Survey highlights that the possibility of requalifying for a new period of
unemployment compensation through participation in programmes was
abolished in 2001, which should have resulted in that those who currently
One explanation is that Arbetsförmedlingen´s indicator only includes vocational training and
excludes preparatory training courses. For more information on Arbetsförmedlingen´s
indicator, see Nilsson (2008).
43
Page: 85 of 130
participate in the training are more suitable for it. A contributing factor may
have been the down-scale in volumes during the 2000s. Ultimately, the
labour market situation has likely played a part. In times of boom it is easier
to know what to provide training for, and the opposite is true in times of
recession. According to our interpretation it is probably also the most
important explanation to why the effects during the last years of the 2000s
showed bad results.
Except that which the Swedish Long-Term Survey highlights there are
further factors which may have been of importance for the interpretation of
the evaluation results of the efforts made during the crisis in the 1990s. At
the beginning of the 1990s, there were principally only two programme
efforts available, temporary employment and labour market training. Of
these two, labour market training was the programme which could quickly
and at the lowest cost be scaled up to great volumes when the business cycle
rapidly fell. Temporary work required a contractual wage while the training
provided compensation through training allowances (now activity support).
The outline for work experience placements was not developed in the same
way as it is now at the same time as redundancies created a great resistance
both from employers and trade union organizations when it came to
accepting trainees from training programmes with elements of job
experience. The Work Experience Scheme (ALU) was not introduced until
1993. It is in light of this the drastic increase of labour market training shall
be viewed. The training had strong elements of competence-sustaining
activities and also had characteristics of the guarantees which would later
develop. There are therefore both difficulties and disadvantages to
comparing the employment training's efficiency with periods before and
after that period as the activities are considerably different in several
respects. With new measures, there were greater possibilities for directing
the employment training towards a more clear need on the labour market.
Besides employment training, different kinds of subsidised employments
and job experience are currently the dominating types of programmes. The
Swedish Long-Term Survey makes the conclusion that effects are best for the
programmes which are most like regular employments (contribution for
starting a business, recruitment support, individual recruitment incentives)
and a trend is that the effects are worse the further away from a normal job
the programme is. It also says that the effect of participating in a
programme rather than continuing to apply for work as openly unemployed
seems to be particularly big for some of the programmes which most
resemble regular jobs; that is, individual recruitment incentives and start-up
grants. These types of subsidies strengthen the individual's position on the
labour market more than other types of efforts. The results apply for both the
1990s and the 2000s. This too is confirmed in the Labour market report's
indicator over employment effects. Evaluations of job experience however,
Page: 86 of 130
has had smaller effects even though they have tended to be higher during the
2000s than during the 1990s.
There is a potential problem with those programmes which most resembles
regular jobs. These usually have the largest displacement effects. Persons
with subsidised employments risk pushing aside other persons' chances of
finding employment. If Arbetsförmedlingen was free to choose, the choice
would naturally be a programme which, given the effect on the participants,
has less of a displacement effect since the general effects are then more
positive. The Swedish Long-Term Survey does point out that if different
types of subsidised employments are directed at long-term unemployed, the
displacement need not be such a large problem. The argument follows the
logic in the labour market model which was outlined in chapter three. The
long-term unemployed are far removed from the labour market and compete
less over the vacancies. Those displaced can then be expected to stand closer
to the labour market and also be able to apply for other jobs. The result is
hence increased competition for the jobs. The downward pressure on wages
increases. Employers can then create more vacancies and in the long-term
the direct displacement is counteracted. Within Arbetsförmedlingen such
connections are often discussed in terms of counteracting the lack of labour
and reducing the risk of bottlenecks.
This displacement discussion has often been conducted and the research
seems to have found a consensus that the displacement can be accepted if it
occurs to the benefit of persons far removed from the labour market.
However, there is another kind of displacement discussion, or which could
rather be called a substitution discussion, occurring between different types
of individual recruitment incentives. Arbetsförmedlingen has experienced it
as difficult to increase the amount of work experience placements, individual
recruitment incentives or New start jobs beyond the already existing levels.
In part, the inertia may be due to transition problems that it takes time to get
used to new methods of working. But it could also potentially be due to a
saturation level on the labour market. There is a risk of substantial
substitution effects between different individual recruitment incentives and
work experience placements where an increase in one type of support entails
the risk of other types of support being displaced. With a faulty subsidy
structure and an allotment of support which is governed by persons'
unemployment periods, it is easy for employers to choose a stronger
jobseeker than what the labour market policy would like to prioritize. When
designing effective subsidy structures there must be an assessment of the
jobseeker's expected productivity in work and regarding how large
compensation the employer needs to consider this jobseeker equal to
someone they had intended to employ without the subsidy. A subsidy which
is too large means that the society pays more than what is necessary, a
subsidy which is too small means that the employer chooses someone else or
Page: 87 of 130
refrains from recruiting entirely. Consequently, the structure needs to be
individually adapted and if that is not possible, the employer's ability to
select jobseekers should be limited. Arbetsförmedlingen has therefore
presented a wish for an audit of the subsidy structure between different
individual recruitment incentives.44
4.2.2 Long-term effects of labour market programmes 45
There are not many studies about the long-term effects of labour market
programmes, or about how they should be directed in various states of the
business cycle. However, knowledge about this is important as it makes it
possible to somewhat successfully allocate the labour market policy
resources depending on the situation on the labour market. In Taslimi (2011)
the knowledge about these connections has been compiled. It is difficult to
find a consensus around the conclusions since the results vary and many of
the analyses are made in countries which differ from Sweden in many
cultural aspects, which means it is difficult to determine whether the
conclusions are generalizable. However, it is possible to lift some of the
principal results up for discussion.
The empirical research on programme effects indicates that studies with a
longer time perspective in general find more advantageous effects of labour
market policy measures and programmes.46 The estimates show that many
programmes which indicate small positive (or even negative) effects in the
short-term have significantly positive effects in the long-term. The reason is
that the negative lock-in effect seems to be as large or in many cases larger
than the positive short-term treatment effect in the short-term, whilst the
treatment effect dominates in the long-term.47 Subsidised work provides
quicker effects as the measure contributes to an increased demand on labour
in the short-term. Training efforts provide more long-term effects for the
participants as the effort increases the individual's competence and improves
the participant's competition abilities on the labour market.
Furthermore, the negative lock-in effect of the labour market training seems
to be weaker during recessions. The negative effect which programme
participation has on the search activity is of less importance when the
number of unemployed is higher and there are not as many jobs to apply for.
However, the positive treatment effects of labour market training seem also
to be lower in recessions. One explanation for this could be that it is easier to
Arbetsförmedlingen (2011b)
The section is based on Taslimi (2011), for references see this report.
46 There is no generally accepted definition of what is short-term and long-term. However,
short-term can be regarded as result periods of approximately 1 year while long-term often
relates to periods of three to five years or even longer.
47 During the period in programmes there are lock-in effects where the level of jobseeking is
lower and therefore the job chance is lower. The expected positive effects of the programme
itself, the treatment effect, in all likelihood come into existence after accomplished effort.
44
45
Page: 88 of 130
find short-handed occupations and that the competition for vacancies is
reduced during a boom.
The research also shows that labour market policy measures have positive
effects on the labour force participation both in the short-term and longterm on the Swedish labour market. Labour market programmes prevent the
unemployed from leaving the labour force, something which is particularly
important during a recession when the probability of leaving the labour
market is especially great.
The empirical research indicates further that other factors such as
programme type, the contents of the programme, orientation and target
group are possibly more relevant than the state of the business cycle
regarding the efficiency of programmes over time. The programme effect can
increase in terms of trends regardless of the situation of the business cycle,
given that it is directed correctly.
Based on previous experiences and studies, some concrete conclusions about
the labour market policy directions during turns in the business cycle can be
made. It is reasonable that during a recession, particularly during a deep and
sustained recession, investments are made in training such as labour market
training and work experience. During a recession, the human capital effects
of the training effort carry more weight than their lock-in effects which are of
less importance when there are few vacancies. Matching efforts such as
jobseeker activities and placement efforts which aim to quickly place
unemployed persons in employment are still justified during recessions, as
even during these periods many jobs are available. The yield from such
efforts is however lower during recessions as there are of course fewer jobs.
Placement efforts on too large a scale could also entail that employers
receives many applications from jobseekers that lack competence. This risks
deteriorating Arbetsförmedlingen´s relations with the employers. Intensified
placement efforts in close connection with the employers will however
increase the level of accuracy in the effort and produce a larger effect also
during recession.
The research results indicates that the labour market policy should stimulate
the demand through employment creation activities and programmes such
as individual recruitment incentives. According to the research, individual
recruitment incentives produce large displacement effects but entail very
positive effects, especially in the short-term, which prevents long-term
unemployment and counteracts resignation from the labour force and social
exclusion.
A problem with the labour market policy during recession in accordance with
previous experiences from the 1990s recession is that when the programme
Page: 89 of 130
volumes increase rapidly, the quality in the programmes falls which leads to
less positive effects. A central issue is therefore also how the programme
volume is to be increased without affecting the quality of the programme.
The large volume of efforts and programmes during the 1990s crisis is
considered likely to be one of the reasons for the poor performance of the
labour market programmes. It is desirable to be able to identify unemployed
persons in order to ascertain that they can benefit from participating in a
programme. Profiling and targeting methods are possible instruments in this
work.
In summary, the research indicates that the labour market policy during a
recession shall be directed with a stronger emphasis on employment creation
programmes and training efforts and less emphasis on matching efforts. In
practise it is often combinations of programmes which produce the greatest
effect for the individual. The research also shows that a mix of different
efforts and programmes (such as training, counselling, workshops and work
training) leads to shorter unemployment periods and increased income.
4.2.3 Placement activities and coaching
The knowledge of direct placement activities such as coaching efforts and the
use of services and methods is poorer than that of programmes. This is
particularly true for the different methods which may be used in the
placement activities. Some of the existing research is presented below.
The coaching is a form of reinforced placement effort where the jobseekers
receive an increased search and match aid. 48 The effects can be positive in
the form of an increased stream of job offers and at the same time negative if
the jobseeker becomes more selective in their jobseeking. Which effect
dominates is an empirical question. Previous studies on Swedish data
indicate positive effects of intensified placement efforts in order to break
long-term unemployment. Examples of studies are Delander (1978),
Johansson and Åslund (2006), Hägglund (2009), Andersson Joona and
Nekby (2009) and Liljeberg and Lundin (2010).
Delander (1978) presents the results from an experiment implemented in
Eskilstuna 1975 in which 400 long-term unemployed were randomly divided
into two groups, one of which received extended placement services and the
other normal service. The long-term unemployed who received the extended
service improved their labour market situation significantly, both the
Since the services of the placement activities are maintained by a number of methods, see
section 2, the evaluations should focus on methods rather than on a general collective term such
as placement service or coaching. The knowledge of what services and methods are currently
most suitable in different situations and for different jobseekers is very under-explored. This is
an area in urgent need of development considering how central these tools are for
Arbetsförmedlingen activities.
48
Page: 90 of 130
probability of gaining employment and the quality of the employment was
significantly higher for the experiment group than for the control group.
Hägglund (2009) evaluates a number of pilot activities which were
conducted during 2004 in different parts of the country. The purpose of
these pilot activities was, among other things, to test intensified placement
efforts such as jobseeking activities, personal guidance, monitoring of search
behaviour and contact seeking activities towards employers. Hägglund also
shows a positive effect of intensified efforts: the unemployment periods for
long-term unemployed decreased while the short-term unemployed
primarily received higher income. Liljeberg and Lundin (2010) study the
effect of Jobbnätet (The job network). Jobbnätet included job coaching
which aimed for the participants to widen and improve their jobseeking and
for the administrators to spend a lot of time on employer contacts. The
results indicate that the work method reduced the time it takes for the longterm unemployed to find a job.
There is a genuine insecurity in evaluating different programme efforts
unless it is possible to implement 'classic' experiments; that is, choosing a
group which can be expected to benefit from an effort and then randomly
providing some of these with the effort and using the other participants as a
comparison group. Without such a structure, each study has to handle the
problem with selection. The selection can either be self-selection (e.g., that
the participants are more motivated to participate) or administrator
selection (that the participants are deemed to be in greater need of the
effort). The result is that the comparison group consists of persons who have
made a conscious decision to relinquish or have not been deemed suitable
for various reasons. These two groups are rarely comparable and
comparisons will be misleading. Often, studies are forced to try and handle
these comparison problems in different ways ex-post, but then the
determining question about whether the selection have been handled or not
remains. One example of this is if jobseekers who receive coaching efforts
from a private provider differ in motivation, social competence or other
factors which can be of importance for the results. Such considerations are
particularly important to make when the analysis is made ex-post, i.e.
without a randomly selected participant and comparison group.
With such reservations in mind, Gartell (2011) analyzes jobseekers who have
received job coaching in comparison with jobseekers who have not received
job coaching. The evaluation tries to ascertain that the persons being
compared are as similar as possible by matching observable characteristics.
To monitor non-observable differences between jobseekers, a smaller
number of interviews with employment officers were conducted. These
interviews suggest that persons participating in job coaching form a group
which is relatively far removed from the labour market and which is
therefore relatively less probable to gain employment without the coaching
Page: 91 of 130
effort. The evaluation shows that jobseekers who have received job coaching
have been offered work experience placements to a somewhat greater extent
but gained employment to slightly less extent than jobseekers who have not
received job coaching. Given that the participants in job coaching are a
weaker group, the result could suggest a certain positive effect, but such an
interpretation is dependent on how great importance this selection has had
in reality. To form an efficient labour market policy effort there is a great
need for monitored trials where participants can be randomly included in a
participant group and a comparison group and that selection mechanisms
thereby can be handled.
In a somewhat different study (Behncke et al. 2007) which was conducted in
Switzerland, the question was posed as to whether the employment officer's
attitude towards the jobseeker had significance for the results in the job
chance. In Switzerland, as in Sweden and many other countries, an
administrator at a public employment service has double roles both as an
advisor and in their task of monitoring unemployed persons. These roles are
often conflicting and this can lead to significant differences in how different
administrators handle their task. They highlight two typical cases: firstly,
administrators who feel that they provide services for their customers and
see it as their primary task to fulfil their needs, and secondly, administrators
who tend to follow a certain strategy even against the unemployed person's
will, e.g., by assigning labour market programmes without consent from the
unemployed person. Based on a data set with linked
jobseekers/administrators they examine the effects of the administrator's
will to co-operate on the customers' likelihood of gaining employment. They
find, perhaps surprisingly, the result that administrators who put less effort
into maintaining a co-operative and harmonious relationship with their
customers increase the jobseeker's chances of finding employment in the
short-term and the long-term.
If we look at general placement efforts, a general conclusion can be discerned
among international studies that placement efforts can increase
employment, perhaps particularly when combined with monitoring.
Increased support and advice along with an increased monitoring seems to
create a good mix of extended support and a more in-depth follow-up. The
conclusions from the international studies are that different efforts, such as
meetings with employment officers, have positive effects. This, coupled with
the fact that Swedish studies indicate positive effects of intensified
placement efforts at least for the long-term unemployed, the Swedish LongTerm Survey 2011 interprets as that there is every reason to believe that the
regular placement activities with Arbetsförmedlingen are an important and
functioning part of the active labour market policy.
Page: 92 of 130
4.3 Improved matching
The employment effects of the programmes and placement efforts were
presented in the previous section. This section studies the matching on the
labour market. The matching can be described in two terms. One is the
matching process which includes all the steps which jobseekers, employers
and Arbetsförmedlingen may consider taking to facilitate the meeting
between jobseeker and employer. The other is the actual
matching/employment, that is, when the jobseeker and employer have
agreed on an employment and the person actually starts working. 49 A lot of
the work of Arbetsförmedlingen is about facilitating the matching process
and the result of this is the matching in the form of an employment. As
matching on the labour market is subject to competition with other
jobseekers, there is no guarantee that the efforts which have been made
during the matching process will lead to a match/employment. Each effort
which increases competitiveness for the available jobs on the labour market
should however entail positive effects within society, in that they lay the
foundations for the creation of new jobs, irrespective of which candidate is
chosen to fill a given post.
Information in the matching process
The information which forms the basis of a matching often originates in
informal channels, as explained in chapter three. Even if the employer makes
use of many different channels and paths in the matching process, the job is
often mediated via informal channels (Table 4.3). By breaking this
dominance of informal channels, Arbetsförmedlingen will be able to improve
the situation of people with a weak position in the labour market and who
lack a solid network of contacts for finding employment. Increasing
recruitment through formal channels would also open up the possibility of
finding more productive jobseekers for each individual vacancy. At the same
time, informal channels are an effective matching instrument in the sense
that they reduce many of the costs usually involved in the recruitment
process. In order to break this dominance, Arbetsförmedlingen must
therefore minimize the costs incurred as a result of hesitance among
employers when recruiting people they do not have reliable information on.
There is a subtle differentiation in terminology here. At Arbetsförmedlingen and in the job
placement work, the term 'matching' has more often been used in the context of the matching
process, rather than the actual gaining of employment. 'To match' has come to mean to suggest a
line of work for the jobseeker to pursue, or to recommend a jobseeker to an employer. It is
important to keep these terms separate in order to avoid confusion. When the Labour Market
Report speaks of the work which can lead to employment, the term 'matching process' is used;
the term 'matching' is reserved for the actual gaining of employment.
49
Page: 93 of 130
Table 4.3 How unemployed persons and programme participants who have
gained employment received information on their job, 1995-2010
7.6
Spring
2001
7.7
Autumn
2006
6.6
4.7
7
8.7
Sum total
employment service
16.6
14.7
Other formal channels
7.5
Informal channels
Other
Sum total other
information
channels
Information Channel
1995
2000
2007
2008
2009
2010
Employment officer
11.9
5.4
5.1
3.5
3
Job bank etc.
10.8
14.4
15.4
10.3
11.3
16.4
17.3
19.8
20.5
13.8
14.3
6.7
12.5
6.9
10.2
10.1
8.2
9.8
75.9
-
73.1
5.6
65.4
5.7
72.3
3.5
67.8
2.2
66.1
3.3
72.5
5.5
72
3.9
83.4
85.3
83.6
82.7
80.2
79.5
86.2
85.7
Source: Arbetsförmedlingen´s de-registration evaluation.
It is not easy to represent the effect of Arbetsförmedlingen´s efforts in the
matching process with statistics due to the multi-dimensional nature of the
work. The employers that turn to Arbetsförmedlingen widely advertise
information on their vacancies, and it is not necessarily a jobseeker
registered at Arbetsförmedlingen that fills a vacancy. The information itself
can however have positive effects on the transparency of the labour market
and on the actual quality of the matching. Jobseekers participating in a
coaching or training programme or receiving an individual recruitment
incentive do not need to know which programme eventually led to their
employment. Some of the programmes are offered as a means of improving
the individual's ability to hold their own in what is a largely informal market.
Placement officers also often say that the dialogue with an employer creates
openings which did not previously exist. Close contact with employers means
that alternative solutions to their recruitment problems can be found. The
use of work experience placements, subsidized jobs or training programmes
can create new possibilities, both in meeting the employer's recruitment
requirements and breaking the sense of exclusion.
Arbetsförmedlingen also cooperates to a great extent with recruitment
companies and staffing agencies, also recommending jobseekers to them.
For matches, who are brought about as a result of such contact, the
individual does not need to be aware of the fact that the information was
mediated via Arbetsförmedlingen, even though this is a crucial factor in
these cases. A similar phenomenon involves people who have had a work
experience placement before being offered a position by the same employer.
These provide largely informal contacts as information sources (Nilsson,
Page: 94 of 130
2011c). Information channelled via private providers can in certain cases also
not be perceived as originate from Arbetsförmedlingen, despite the fact that
private providers are an active part of the Swedish labour market policy. It is
therefore generally difficult to evaluate the contribution of
Arbetsförmedlingen to the matching process without more detailed defining
of the issues at hand.
Arbetsförmedlingen´s task of being an expanded contact network (Jansson,
1999), i.e. which has created a direct link between employers and jobseekers
that do not have reliable information on one another, cannot be easily
measured today. The most relevant information available is the number
jobseekers stating that it was a placement officer who provided them the
information on the job vacancy. It is a number which has for several years
been on the decline. There may be cause to analyze this development in more
detail. The working methods are partly to blame, and to what extent the
placement officer works with the employer contacts with the purpose of
helping a specific jobseeker to get the job. The work tools are available within
the scope of the method ”Supported employment” 50. It is relatively simple to
map individual jobseekers' contact networks in the early stages of their
unemployment period and to assess how they will be able to "sell"
themselves. For successful use of the method, however, Arbetsförmedlingen
must develop its employer contacts with such purposes in mind.
The matter of whether or not information on a job vacancy went directly
through Arbetsförmedlingen or was mediated via other channels such as
those mentioned above is not a relevant criterion for evaluation of
Arbetsförmedlingen´s contribution to the matching process. A more relevant
piece of information is whether or not the jobseekers or employers
themselves feel that they received the support or efforts they needed from
Arbetsförmedlingen. The number of jobseekers stating that the above is true
for them came to 61 per cent in 2010 (Table 4.4). That is a higher percentage
than the previous year. 21 per cent state that they did not receive the help or
support from Arbetsförmedlingen that they needed. The people who do not
feel they have received support do not differ markedly in terms of observable
characteristics from those of the people who received support. Among the
people who did not receive support, the average unemployment period is
significantly shorter; approximately 100 days, which indicates that the
support would have been less urgent (Nilsson, 2011c).
Supported employment is a method for special support during an introduction to a work
position. The support is individual and is provided by a support officer. The method involves
preparatory measures as well as measures to facilitate follow-up. Through the method, support
is provided both to the jobseeker/employee and the workplace.
50
Page: 95 of 130
Table 4.4 Proportion (in per cent) of people who received support and the help
they required from Arbetsförmedlingen
Information Channel
2006
2007
2008
2009
2010
Yes, to a large extent
29.1
36.0
36.9
45.5
50.2
Yes, somewhat
No
No, did not need,
managed myself
21.7
28.5
17.4
26.9
21.7
20.6
8.9
18.7
10.7
21.0
20.7
19.8
20.7
26.9
18.1
A very large part of the employers who use Arbetsförmedlingen also state
that they are happy with the service that they received (Diagram 4.11). The
proportion is around 90 per cent and has been relatively stable over many
years. In 2010 there has been a decline in the number of employers receiving
a sufficient number of applications. This pattern follows the business cycle
and shows that when competitiveness increases on the labour market,
employers experience more difficulties in recruiting.
Diagram 4.11 Satisfied employers and the number of workplaces receiving a
sufficient number of applications, per quarter, 2000-2010
Satisfied employers
95
Sufficient applicants
Per cent
90
85
80
75
70
65
10
20
09
20
08
20
07
20
06
20
05
20
04
20
03
20
02
20
01
20
20
00
60
The customer's feeling that they have received the requisite support and help
is a prerequisite for the building of trust for the operation. The effects which
the efforts have on the efficiency of the labour market are another matter. As
shown in chapter three, there are certain areas which stand out as
particularly important to follow. These are jobseeking intensity, the
jobseeker's level of qualification, the likelihood of making contact,
Page: 96 of 130
dissemination of information and flexibility. It is of course also important to
influence the handling of the jobseeker through various subsidies paid out to
employers. Such subsidies can be provided for jobseekers with unrecognised
or unreliable qualifications, or for employers who incur other additional
costs for e.g., adapting the workplace to a person with a disability. As
explained above, the programmes and subsidized jobs are intended for
individuals who have a particular need for them, and are associated with an
increased likelihood of gaining employment.
Jobseeking activity
Throughout, a high level of jobseeking activity is maintained (Diagram 4.12
and 4.13) as regards the time spent and the number of jobs applied for. 51
Compared to the situation in the mid-2000s, the scope has increased. This
development has affected all areas, and is felt among both unemployed
persons and programme participants. The jobseeking activity is however
significantly higher for the unemployed persons than for those in
programmes. A theoretical consequence of the matching model in chapter
three was that the level of the jobseeking activity is often too low, but that
development of an infrastructure which facilitates less costly jobseeking or
easier contact with the right employers would mitigate these consequences.
It is difficult to judge if this is the case based on the given values. A simple
mathematical example illustrates the implications of a scope of eight jobs
applied for per unemployed person per month. Let us assume that there are
400,000 unemployed persons or programme participants, who on average
apply for eight jobs per month all year round.52 This therefore generates 38.4
million applications per year. From Diagram 4.6 we know that the number of
newly employed persons in 2010 amounted to approximately 1,200,000. If
these 38.4 million applications were then divided equally, this would mean
that every employer would receive 32 applications each, which is a relatively
high figure. Moreover, these applications are only from people who are
registered with Arbetsförmedlingen as unemployed or receiving activity
support. In addition to the unemployed there are, according to Table 4.2,
350,000 job applicants who are already employed. In fact, the number of
applications from these people would likely prove higher, if they could be
properly counted.
For detailed results and confidence intervals, see Nilsson (2011b).
There can be a certain degree of overestimation as programme participants search for jobs to
a lesser extent.
51
52
Page: 97 of 130
Diagram 4.12 Average jobseeking activity in the number of jobs applied for per
month, by quarter, during the period 2003-2010.
Amount
Openly unemployed
Preparatory training
Job experience
9
8
7
6
5
4
3
2
1
Job and development programme
10
Youth job programme
10
20
09
20
08
20
07
20
06
20
05
20
04
20
20
03
0
Start own business
Amount
9
8
7
6
5
4
3
2
1
10
20
09
20
08
20
07
20
06
20
05
20
04
20
20
03
0
Page: 98 of 130
Diagram 4.13 Average jobseeking activity in the number of hours spent per
week, by quarter, during the period 2003-2010.
Openly unemployed
Preparatory training
Job experience
Amount
8
7
6
5
4
3
2
1
Job and development programme
8
Youth job programme
10
20
09
20
08
20
07
20
06
20
05
20
04
20
20
03
0
Start own business
Amount
7
6
5
4
3
2
1
10
20
09
20
08
20
07
20
06
20
05
20
04
20
20
03
0
The number of contacts with Arbetsförmedlingen has also remained constant
for a relatively long time. With a certain degree of variation, the number of
contacts has rested at around 2.5 per month (Diagram 4.14). The contacts
have been in the form of visits, telephone calls or e-mails. It is difficult to
assess whether or not the individual has enough contact. The amount of
contact does however affect the workload at Arbetsförmedlingen. Let's take a
theoretical scenario which is unrealistic yet illustrative, and assume that each
Page: 99 of 130
placement officer has 40 hours a week all year round to work with
jobseekers, disregarding five weeks' holiday, and that the placement officers
number around 9,30053. This means there are approximately 16.9 million
working hours available for the year (1.4 million hours per month). With
approximately 400,000 registered as unemployed or on a programme, this
should correspond to 3.5 hours of individual service per jobseeker per month
(53 minutes per week).54 Naturally, this limits the scope of the service which
can be offered to the jobseeker, and in reality time is more limited, as the
placement officers have other duties to attend to, such as company visits,
participating in on-the-job-training, participating in internal meetings,
maintaining contact with private providers, etc. With an inflow of new
groups - newly arrived immigrants participating in introduction activities
and people who have come off sick leave - who from the beginning require
more support than the average jobseeker, the number of placement officers
or private providers represents a limited factor for the possibility to provide
comprehensive individual support. In general, more detailed analysis of the
use of time in the offices of Arbetsförmedlingen is called for in order to
optimize allocation of human resources.
Diagram 4.14 Number of contacts with Arbetsförmedlingen in the last month,
divided into persons registered for long periods and other. Statistics taken
quarterly 2005-2010.
Registered>24 mon.
Registered 3-24 mån
Amount
4
3
2
1
10
20
09
20
08
20
07
20
06
20
20
05
0
The assignment of Arbetsförmedlingen within unemployment insurance
This figure takes into account the total number of employees, on an average working day the
amount is decreased owing to leave of absence, illness, part-time positions, etc.
54 See Annual Report 2010 for an alternative outlook and an in-depth report of expenses.
53
Page: 100 of 130
The level of jobseeking is not the same for all jobseekers. Some are more
active, whilst others have a very low activity level. In order to maintain
unemployment benefit as a readjustment insurance, it is important that
Arbetsförmedlingen also attends to its assignment within unemployment
insurance. In 2010, there was a proportion of around 15-20 per cent of
jobseekers who had not applied for any job within the last month. There was
also a group of around 10 per cent who had not spent any time searching for
jobs during the previous week (Diagram 4.15). The quality of the data can be
problematic in certain cases as it is difficult to link the activity to periods
where they have actually received compensation. Some have for example
stopped applying for jobs as they have already begun working or have
pending employment. Those who have already found a job should not have
been eligible for compensation. Furthermore, they are receiving
compensation in the form of unemployment benefit for reasons which are
not justified, for example that they are nearing retirement, are ill or are on
holiday. With reservation for the quality of the data, the latter group, which
constitute an estimated half of the inactive jobseekers, should be a prime
candidate for notification.
To gauge the real effects of the work with the monitoring function is a
complicated task. Individuals can be monitored at regular intervals,
sanctions can be put in place and the level of compensation can be reduced
over time, all with the purpose of increasing the jobseeker's incentive to be
more active. Assessment of an individual's actual activity is difficult. It is also
difficult to gauge the effects on an aggregate level, i.e. how the joint actions
of all individuals affect the matching process. If the matching process is to be
functional, however, jobseekers must not decrease their jobseeking activity
or have unreasonable expectations of a job, keeping in mind the expertise
and qualifications which they possess. Ideally, mobility should also not
diminish, which can often be the case when faced with the cost of commuting
to a new workplace. In principle, it is possible that the compensation
received for unemployment is higher than the potential wage once the cost of
commuting is deducted, which likely decreases willingness to commute.
There are a number of studies which reveal that lower levels of
unemployment benefit lead to an increase in the transition to employment
(see e.g., Bennmarker et al., 2007). There are also studies which reveal that
effective monitoring can counteract the negative effects (see e.g., Hägglund,
2009). These also indicate that there is call for effective monitoring of the
jobseeking activity and the expectations jobseekers have for work.
There is at present no generally accepted definition of the optimal scope of
Arbetsförmedlingen´s monitoring measures. The Swedish Unemployment
Insurance Board (IAF) has in a report monitored Arbetsförmedlingen´s
work with notifications for rights to compensation where it should have been
called into question (IAF, 2011) Their primary unit of measurement is the
Page: 101 of 130
number of people who have received a notification in one year in relation to
the total number of people receiving compensation that year. The result is
that in 2010 there were around 10 notifications per 1,000 people receiving
compensation, a statistic which was significantly lower than in 2007. Based
on a comparison with the number of job vacancies, they deem that this value
is low. Autumn 2010 saw an increase which could be linked to the
development work which started in 2010, though a more thorough analysis is
required in order to draw such a conclusion with certainty (see Diagram 2.7
and the section Development work).
A large number of notifications can hardly be a target in itself, as few
notifications can be just as good a sign of the compliance of those receiving
compensation.55 A more refined analysis would take into account more
factors than simply the labour market situation in the form of job vacancies.
The assessment of whether or not the monitoring function works must be
based on the process defined in the consultation between jobseeker and
employment officer. Only after this consultation, or in the event that the
jobseeker does not attend the consultation, the jobseeking activity can be
assessed and a notification issued, where necessary. The decision regarding a
notification is therefore based on factors which affect the likelihood that the
jobseeker will meet with an employment officer, not necessarily the number
of job vacancies.
With this kind of process perspective, several factors become important. One
is the inflow and outflow of unemployed persons. Another is the time spent
on consultation, yet another is how effective instruments which are available
for performing the assessment of a jobseeker being inactive. The number of
people receiving compensation in relation to all other jobseekers is likely
another significant factor. A substantial proportion of those registered
participate in the guarantees, for example, receiving activity support and
more service, and competing with other individuals on unemployment
benefits for time with employment officers. Without taking such factors into
consideration, it is not possible to conclude that the scope of notifications is
too small, though this may very well be the case. The aforementioned
development work is intended to ensure that the handling of notifications
meets the requirements of the regulations.
The sanctions imposed in the event of a notification are related to the
assignment within the unemployment insurance.56 The formulation of these
IAF notes this (p. 14, IAF 2011), but at the same time they feel there is a not insignificant
amount of "hidden statistics", situations in which the Employment Service should have issued a
notification but did not (IAF, 2009).
56 In the first instance the daily benefit is reduced by 25 per cent for 40 days of the compensation
period. If during the compensation period a second instance arises, the jobseekers daily benefit
is reduced by 50 per cent for a further 40 compensation days. In the third instance, the
jobseeker no longer has the right to compensation until he or she has fulfilled working
conditions.
55
Page: 102 of 130
can significantly influence both the actions of the person receiving
compensation and the manner in which monitoring is performed. IFAU
analyses sanctions imposed due to refusal of a job offer. 57 The result is that
those affected by a sanction gain employment quicker than they would
otherwise have done. They also often accept a lesser-qualified position,
which is reflected in the lower wage and is often part-time. The report
authors interpret this as a negative effect as the jobseeker is deemed to be
overqualified for the position. They do not feel that more lenient sanctions
affect the individual's behaviour to a great extent but that they have a
significant effect on the employment officer's actions. In general, the report
recommends that sanctions should more often be linked to the intensity of
the jobseeking activities rather than the monitoring of the job offers. The
effects are therefore expected to be lesser with regard to the quality of jobs
and have positive effects on the intensity of the jobseeking. Countries which
have introduced systems with warnings and lenient sanctions are also
thought to issue a higher level of sanctions than Sweden. In the Netherlands,
12 per cent of those receiving compensation have received a sanction during
the compensation period. The possibility to introduce a system with
warnings and lenient sanctions should perhaps be considered in the field of
Swedish unemployment insurance. At present it is not permitted for an
employment officer to issue a warning to a jobseeker who does not fulfil
insurance requirements; a notification is the first level of sanction.
Another way to approach the problem from a monitoring perspective is to
change the focus from individual behaviour to gauging the process.
Information on unemployment insurance, the drawing up of actions plans
and the number of referrals which have not resulted in an application are
statistics of this nature which are available. These are reported in Savvidou
(2011) and provide a glimpse of the extent of the work taking place within the
monitoring function. This does not however provide a picture of the
significance of the work for the functioning of the labour market. It focuses
mainly on the actions of the individual in connection with other forms of
intervention from Arbetsförmedlingen´s side. It is necessary for the
individual to act accordingly, even during other periods of unemployment.
Finally, it is reasonable to observe certain institutional changes which have
tightened up employment insurance as a readjustment insurance and which
have likely affected individuals' actions and thus reduced the risk of them not
fulfilling the activity conditions. 2007 saw the introduction of a de-escalation
of the level of compensation for longer periods of unemployment, a limit of
300 days compensation and the inclusion of programme participation in the
compensation time. This change also coincides with a substantial decrease in
the number of notifications.
57
van den Berg and Vikström (2009)
Page: 103 of 130
Diagram 4.15 Proportion of active jobseekers with unemployment benefits,
number of jobs applied for per month and number of hours per week spent
searching for jobs
0 jobs
≥ 6 jobs
1-5 jobs
60%
50%
40%
30%
20%
10%
10
20
09
20
08
20
07
20
20
06
0%
0 hours
1-3 hours
≥ 4 hours
80%
70%
60%
50%
40%
30%
20%
10%
10
20
09
20
08
20
07
20
20
06
0%
Page: 104 of 130
58
Diagram 4.16 Regional and occupational imbalance
Occupational imbalance (trend)
0,45
Regional imbalans (trend)
Imbalans
0,40
0,35
0,30
0,25
0,20
0,15
0,10
0,05
10
20
08
20
06
20
04
20
02
20
00
20
98
19
96
19
94
19
19
92
0,00
Geographic mobility
Evaluations made of the effects of the labour market policy on geographical
mobility show that labour market programmes causes a decline in this factor
(the Swedish Long-Term Survey, 2011). The labour market report has an
indicator of regional and occupational imbalance (Diagram 4.16). It cannot
evaluate the effects of different measures but the indicator points to a rather
constant development in the regional imbalance in recent years, whereas the
occupational imbalance appears to follow a countercyclical pattern.
Distribution of the job chance quota
By using individual recruitment incentives in different forms and targeting
them at people who are far removed from the labour market, is possible to
lessen the distribution of job opportunities. As shown in Diagram 4.4, the
opportunity to gain employment varies greatly among people registered for
different lengths of time. By including subsidized jobs in the definition of a
job, it is possible to gain a picture of the extent to which programmes even
out these differences (Diagram 4.17). It is clear from results that individual
recruitment incentives compress the curves concerning job chances for the
58
The unit of measurement used is
O  0,5  i i  i
where
O
indicates imbalance,
i the proportion of unemployed in labour market area/occupational group i of the total
number of unemployed persons, and U i U , and  i the proportion of vacancies in the labour
market area i of the total number of vacancies, V V .
i
Page: 105 of 130
different groups. This is further confirmation of the observations in the
beginning of the chapter that programmes are aimed at groups with a weaker
position on the labour market.
Diagram 4.17 Job chance Inc. work with support
0-419 days
0,18
420-730 days
>730 days
Average
Proportion
0,16
0,14
0,12
0,1
0,08
0,06
0,04
0,02
19
95
19 01
96
19 01
97
19 01
98
19 01
99
20 01
00
20 01
01
20 01
02
20 01
03
20 01
04
20 01
05
20 01
06
20 01
07
20 01
08
20 01
09
20 01
10
20 01
11
01
0
The matching indicator
The Beveridge curve cannot, as previously stated, be unreservedly
interpreted in terms of matching efficiency as it does not take inflow/outflow
into consideration. Whenever economic shifts occur, we expect an
anticlockwise loop, heading back into the curve. In the 1980s, this adaptation
process took several years, but eventually the curve took a form which much
more closely resembled the original. The interpretation of this was that the
matching process had been improved, despite the fact that it looked different
in the adaptation process. The situation was different after the crisis of the
1990s, when the curve was thought to have shifted outward following the
adaptation process. It is however still difficult to say whether this shift owes
to the deterioration of the actual matching process or to other structural
factors.
As an alternative comprehensive unit of measurement of the effectiveness of
the matching process, Arbetsförmedlingen therefore developed a matching
indicator (Fransson, 2008). It gauges the expected number of people leaving
the Employment Service for a job as a function of the number of jobseekers
and the number of job vacancies. The indicator takes into account the
economic development by using labour market tightness and statistical
forecasting. It also includes the composition of programmes. In general, the
indicator gives the impression that 2009 and the first half of 2010 were
Page: 106 of 130
difficult years for the labour market policy (Diagram 4.18).59 Despite the fact
that a large number of the indicators above reveal good overall results for
efforts, these have not been sufficient for the aggregate efficiency. The
matching indicator hold constant for certain factors which influence the
matching, but many are missing. An explanation for the deviations must
however be sought in the factors not included in the model. Being unable to
point to specific explanations, we can instead propose a number of
hypotheses to clarify the worse than expected result. The addition of new
assignments during the process likely affects the efficiency of the operations.
In 2008 private providers were introduced as procured suppliers for parts of
the services of Arbetsförmedlingen. The operations have since grown at a fast
rate during 2009 and 2010. It is however unclear as to whether or not this
development phase has affected the efficiency. Evaluations have been unable
to show that the results of the private providers deviate from those of local
offices of Arbetsförmedlingen (see references in chapter4.5.1). During 2010,
Arbetsförmedlingen´s assignment has expanded with tasks in the areas of
rehabilitation and integration. This can affect efficiency via a change in the
composition of the group of jobseekers. The analyses which have been
conducted have not however shown that this has had a significant impact.
The same can be said for the stream of young people which changed
drastically in 2007 due to students no longer qualifying for compensation
from the unemployment fund. A large group of young people with a
relatively short 'processing time' should have a positive effect on the measure
of efficiency. However, we have been unable to find any covariance between
these factors and the matching indicator. A factor which by contrast has a
very obvious covariance with the development of the matching indicator is
the variation in the scope of the use of individual recruitment incentives.
This usage was relatively limited during the period 2007-2009. In 2010,
however, the volumes increased again. Without being able to attach any real
relevance to these, this can be linked to a generally positive development of
the matching indicator. The importance of this can be mirrored in the fact
that several recruitment incentives, which are aimed at groups which are far
removed from the labour market, and which deprioritize stronger
candidates, increase the competitiveness for available jobs and thereby
improve the matching.
The values above the 0 line reflect a better than expected matching based on the conditions,
and the values below the 0 line reflect a worse than expected matching.
59
Page: 107 of 130
Diagram 4.18 The matching indicator
Deviation
Number of persons
95 % confidens interval
4000
3000
2000
1000
2010 26
2009 49
2009 20
2008 43
2008 14
2007 37
2007 8
2006 31
2006 2
2005 25
2004 48
2004 19
2003 42
2003 13
2002 36
2002 7
2001 30
-1000
2001 1
0
-2000
-3000
4.4 Cost efficiency
The labour market policy programme's capacity to increase the participants'
opportunity to gain employment is a necessary but insufficient cause for the
programme to be socio-economically motivated. An overall assessment must
also take into consideration the costs that the programme entails. If a
programme which in evaluations seems to have positive effects on job
placement also leads to high costs, this programme is not clearly preferably
over an alternative programme which does not have equally positive effects
on job placement but which entails significantly lower costs.
In the annual report for 2010 (Arbetsförmedlingen, 2011a), an analysis of
cost efficiency is presented which is based on producing a given number of
initiatives with the lowest possible cost. With an approach of this nature, the
cost efficiency can for example entail an increase in the time spent on
customer meetings, an improvement in quality and accessibility and a
constant searching for improvements and ways of increasing efficiency. The
Labour Market Report shall not reiterate this analysis; it will instead refer
the interested party to Arbetsförmedlingen (2011a). The Labour Market
Report instead chooses an approach which is closer to a public cost-benefit
calculation, and which focuses on the programme's value.
In a public cost-benefit calculation, the value of an initiative should be
weighed against the associated costs. A complete public cost-benefit
calculation of an initiative should include all spent, discounted, future, direct
Page: 108 of 130
and indirect revenues and costs entailed. A true calculation of the ”cost
efficiency” of an initiative should also take into account the manner in which
the initiative leads to the achievement of goals. It is therefore rather
complicated in practice to perform a complete calculation of this nature.
Despite this, a clear breakdown of the cost and revenue analyses is presented
here in order to provide an understanding of certain elements which form
the basis for calculating the ”cost efficiency” of various initiatives. The
breakdown was presented in connection with various evaluations of
programmes and working methods. It is to some extent a simple analysis of
costs and revenues for a selection of various labour market policy
programmes which were implemented in 2009 based on our own long-term
effect gauging (see Table 4.5).
4.4.1 Cost and revenue analyses in the evaluation
literature
Andersson Joona and Nekby (forthcoming) are studying a pilot scheme for a
number of newly arrived immigrants (FNI) which began in 2006 in a
number of municipalities in the counties of Skåne, Kronoberg and
Stockholm. The aim of the pilot scheme was to considerably shorten the time
taken for newly arrived immigrants to become established in the Swedish
labour market. A simple cost and revenue calculation is performed which
shows that compensation is paid out for the costs for the initiative over a
term of 2 or 3.2 years, depending on various basic assumptions.
Hägglund (2009) analyzes, through a series of five experiments, how
jobseeking initiatives, personal guidance and monitoring of how the
unemployed person searches for jobs help unemployed people from weak
groups to start work. The results are mixed; four of five initiatives prove to
have positive effects on both the costs of the unemployment benefit and the
business cycle because the resulting increase in wage was greater than the
related costs. The experiment was conducted on a small scale, and the
statistics are therefore not very reliable.
Åslund and Johansson (2006) evaluate the endeavours with ”Virtues of SIN effects of an immigrant workplace introduction program” which has been
conducted in 20 municipalities since 1 September 2003. SIN is based on a
methodology for ”Supported employment”, in which certain employment
officers also cooperate in the workplace during an introductory period. The
result shows that SIN is often provided for people who have been in Sweden
for a long time and have a broad experience of Swedish working life. The
most stable effect of SIN is that the measure has contributed to increased
participation in work experience and that people taking up work experience
positions have a better chance of gaining employment at a later stage.
Page: 109 of 130
An estimation is made of how many jobs the reform has created and what
this means for the cost per job created. This Figure can then be compared
with the income or decreased costs for unemployment benefit. The estimated
cost per job created is around SEK 270,000, give or take 100,000 depending
on different assumptions. In the lower interval, compensation is paid out for
the costs of unemployment benefits, but in the higher interval, a higher wage
is required to cover the costs.
Liljeberg and Lundin (2010) analyze the project Jobbnätet (The job network)
which was implemented in Stockholm county between 2004 and 2007.
Jobbnätet was a high-powered jobseeking and matching initiative with
certain practical elements, aimed at providing help to the long-term
unemployed in finding work. In addition, the employment officers involved
in the project were to devote a significant proportion of their working hours
(50%) to employer contacts. The result proved to have positive effects on job
placement. The public cost-benefit calculation conducted suggested, yet with
many reservations, that the increased wage income exceeded the
administrative costs with about SEK 15,600 per participant.
4.4.2 Cost and revenue analysis of the programmes
The Labour Market Report has particularly studied the programmes for the
start of a business, work experience placements and labour market training.
Calculations of the revenues for each programme are based on the number of
days in a follow-up period the programme participants have been
unemployed compared with a group that have not participated in a
programme. The difference in the number of unemployed days has then
been multiplied by an average monthly wage including the employer's
contribution that applies to the entire labour market. Other revenues ought
to be included in this calculation but they have been disregarded as they are
too difficult to value in monetary terms. This for example applies to the
revenue from shortened unemployment periods that lead to smaller losses of
human capital, which in the long run not only constitutes a gain in
productivity but also facilitates matching on the labour market. Other similar
forms of revenue that are not considered in the calculation include the fact
that shortened unemployment periods decrease the risk of ill-health and
have a restrictive effect on certain forms of criminality.
Calculations of the costs for each programme are primarily based on the
direct costs of implementing the programme. This has been calculated as the
average cost per month for a programme participant multiplied by the
average time the participants have spent in the programme. Secondly, the
estimated costs that arise as a result of the displacement effects of the
programme are included. The displacement effects arise when the employer
replaces regularly employed persons with participants from the labour
market programmes (the substitution effect), alternatively when a jobseeker
Page: 110 of 130
who would have been given a position regardless, instead receives a
subsidised employment within the scope of a labour market programme
(deadweight effect). The cost of the displacement effect has been calculated
(by other studies) as the estimated displacement effect (per cent) multiplied
by the estimated revenue from the programme. There are other costs
excluded in a similar way from the calculation since they are difficult to
evaluate. These are costs that arise due to the fact that participation in the
programme may initially lead to a short term lock-in effect. Socio-economic
costs caused by the indirect displacement effects by labour market
programmes that arise from the wage structure are also excluded.
Table 4.5 shows the outcome of the calculation. As can be seen, the
programme for starting a business yields the largest positive effect and thus
the greatest direct revenue. This still holds true when the relatively high
costs of displacement effects are included in the calculation. Work
experience placements also produce a significant net revenue which can be
explained by the direct costs, and the costs of displacement effects in
particular, being much lower for the work experience placement programme
than for the starting a business programme. For the labour market training
programme however, the costs are higher than the revenues which leads to a
negative net revenue. Note that a simple calculation such as the one above
cannot provide a basis for any decisions regarding participation in or
dimensioning of programmes, but must instead be viewed as a preliminary
calculation example to be used in the debate on the cost efficiency of these
programmes. The relevant long-term effects, most important to the labour
market training programme, have not been included in the calculation.
Table 4.5 Cost efficiency of three labour market programmes, 2009
Revenues
Start of business
Job experience
243 800
20 800
33 800
Costs
Displacement costs
6 200
300
72 200
70 700
3 100
0
RevenuesCosts
166 900
17 400
-38 400
4.5 Modes of delivery
4.5.1 Private providers in the mediation operations
Since 2007, Arbetsförmedlingen, has had the possibility of implementing
measures via private providers. The private providers' commission is to offer
individually adapted services including personal supervision and support
based on the specific needs of each participant. The purpose is to improve
matching and prevent exclusion; to provide increased opportunities of
receiving personalized service and allow jobseekers to take part in the
knowledge and experience of other providers as well as to open up the
employment service operations to local and smaller providers.
Page: 111 of 130
Since the introduction of private providers of employment services is fairly
recent, only a few studies have been made on the subject. These studies look
at how well the private providers have managed to assist jobseekers in
comparison to Arbetsförmedlingen. Bennmarker et al. (2009) found that
jobseekers that went to a private provider were in closer contact with their
employment officer and more satisfied with the assistance they received. On
average, no differences in terms of employment or income were found
between the unemployed persons who had used a private provider and those
who had been registered with Arbetsförmedlingen. Harkman et al. (2010)
studied the outflow to employment, comparing the employment offices that
co-operated with private providers to those that did not. A short-term
positive effect of co-operating with a private provider was found, but this
effect decreased rapidly over time.
As previously mentioned, Gartell (2011) made an analysis comparing the
jobseekers who received coaching and those who did not. A comparison was
also made between the coaches employed by local employment offices
(internal coaches) and coaches used by private providers (external coaches).
No differing results were found in jobseekers who had received internal or
external coaching respectively.
However, in terms of reaching a better understanding of which methods are
best suited to assist jobseekers to an employment, it is not constructive to
only evaluate whether the private providers do better or worse than the
official employment offices. They are all part of the active Swedish labour
market policy and the head office distributes resources to both operations
which are meant to complement each other. The purpose of these
evaluations is thus to understand how the activities can be distributed to
achieve the best possible results for those seeking employment.
At present it is not possible to show any significant differences in terms of
results depending on the provider of the service. From a delivery point of
view, it is important to look at the manner in which agreements are written,
in order to create incentives for the private provider to deliver the sought
after results. It was found in the Long-term evaluation, 2011 that all
agreements must be drawn up as to not create distorted incentives for the
providers or a situation where they are motivated to choose the unemployed
persons with the best qualities. This poses particular demands on those
handling procurements. The expertise required takes a long time to develop
and the results will therefore become clear only in the long run.
4.5.2 Internet as a search channel
The theoretical discussion in chapter three on the importance of the internet
for the recruitment process highlighted both pros and cons. The same
Page: 112 of 130
characteristics that make the internet attractive to jobseekers - the low cost
of information - also make it less reliable for recruiters. Paradoxically
enough, the excess of information available to jobseekers creates a lack of
reliable information for employers. Jobseekers and employers are faced with
the need to communicate useful information, and although the internet
provides us with new ways of finding such information, the main problem
remains which is the difficult task of evaluating the information in order to
find a good match. There is a clear contradiction between quality and
quantity in the case of internet jobseeking. More information does not
necessarily equal better information. It is thus possible that the internet has
changed the form of the search process but not necessarily its substance.
The question is whether the actual use of the internet itself is an
interpretable signal. Is there a difference between different groups of
jobseekers in terms of internet usage? The results from an investigation in
the early 2000s showed that at the time, Arbetsförmedlingen´s online
functions were used to a large extent by unemployed persons as well as
programme participants. The proportions were around 60 per cent for the
Job Bank and almost 40 per cent for the Jobseeker's Bank.
Arbetsförmedlingen´s online functions were the search channel with the
most users. More recent studies conducted by Statistics Sweden show that
the extent of internet use has tended to increase (Statistics Sweden, 2011).
There are differences in the tendency to use the internet channels between
the groups of jobseekers. Harkman et al. (2003) concluded that a typical
major user in the early 2000s could be described as a young Swedish official
with a university degree, residing in Stockholm County who had internet
access at home. Persons who used the internet to a lesser extent were often
older workers with an upper secondary school education and often from a
foreign background or disabled, living in smaller communities, who did not
have internet access at home. There are many indications that it might be
different now when Statistics Sweden are not confirming these figures; the
differences in sex, country of birth and level of education are not so
prominent. However, age is still a distinctive factor. That conclusion made by
Harkman et al. (2003) that major users are groups who are generally
considered "strong" on the labour market while those who use the internet to
a lesser extent are "weak" groups, may no longer be true. This is an
important observation. The indication given about the individual's actual
qualifications from their use of the internet as a search channel is even worse
today than it was ten years ago. The uncertainties then grow for the
employers and this increases the costs for selection in the recruitment
process. The risk is, as noted in chapter three, that the importance of
informal contacts will increase again.
The results indicate that access to the internet has led to a current situation
where more search methods are used and more jobs are applied for than
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previously. The results indicate that the extension of the internet services has
led to an increased search activity which also indicates that the services may
have led to an improved matching effect. Harkman et al. (2003) also reach
the conclusion that recruitments through Arbetsförmedlingen´s internet
services lead to shorter search periods. Only those who use informal search
methods have shorter periods. Advertisements in daily or trade press are
considerably less effective in this respect. The results also indicate that a
"wide" search strategy where the jobseeker uses several different search
channels increases the chances of gaining employment.
The report also examined the quality of the employments that had been
created through different search channels by comparing the risk of renewed
unemployment between the channels. The results indicate that jobs
conveyed through Arbetsförmedlingen´s staff and through informal contacts
have a shorter duration and will lead to unemployment quicker than jobs
found through Arbetsförmedlingen´s internet services. Employments
conveyed through other formal channels (primarily advertisements) and
Arbetsförmedlingen´s vacancy journals have a somewhat longer durability
but the difference is not statistically significant.
4.6 Effects of special assignments
4.6.1 Work life Introduction
On January first 2010, the new labour market programme work life
introduction was established at Arbetsförmedlingen. The target group for
work life introduction primarily comes from the rehabilitation chain which
was established in 2008. The rehabilitation chain purports to help people
with long-term periods of sickness benefits or sickness and activity
compensation (SA) back to work.
In January 2010, approximately 14,000 individuals transferred from
Försäkringskassan to Arbetsförmedlingen. These individuals constituted the
"stock". During the rest of the year, another 24,000 individuals were added.
In total, approximately 38,000 individuals started work life introduction
during 2010. According to a forecast made by Försäkringskassan
(Försäkringskassan 2011) fewer individuals will be transferred.
Försäkringskassan makes the assessment that no more than 20,000
individuals will start work life introduction during 2011. From 2012 and
onwards, this number is set at an estimated 500 individuals per month, or
6000 individuals per year, registering with Arbetsförmedlingen.
In Johansson Tormod (2011) the participants who have entered into work
life introduction are examined. The report examines the individuals who
entered into the programme from the start of the programme on 1 January
Page: 114 of 130
2010 up until the end of September. The total number is approximately
30,000 individuals.
The individuals in this group have had a lower income than the population as
a whole during a long period. During the years 1991 to 2008 it has been more
common for the work life introduction group that part of the income is paid
from the unemployment fund or from Försäkringskassan. During the early
1990s, the lower income seems to have been due to a higher level of
unemployment for this group. However, the unemployment has been
transferred to sick leave or disability pension to an increasing extent, a
development which started in the late 1990s and has accelerated during the
entire 2000s. Ill-health, measured as compensation from Försäkringskassan
has, in other words been prolonged for the work life introduction group. On
average, the group has either been unemployed, on sick leave or sickness and
activity compensation (disability pension) and therefore has not worked for
ten out of the last twenty years.
Out of those in the studied group who had accomplished the work life
introduction, 60 per cent were deemed to have a working capacity and did
not return to sick leave. Out of those with a working capacity, two per cent
went back to work for their previous employer and five per cent gained
employment without support with a new employer. Further, 13 per cent
found some kind of subsidised job, including New start jobs. In total, 20 per
cent of them had some kind of work. An additional 8 per cent were openly
unemployed and were assessed to be at the labour market's disposal. 54 per
cent participated in a programme with activity support where the majority
were enrolled in the Employability Rehabilitation Programme, a programme
aiming to help individuals who are deemed to be in need of great support.
It is primarily the issues of ill-health, but also the long periods of
unemployment, which differs persons participating in the work life
introduction from other jobseekers at Arbetsförmedlingen. The fact that
Arbetsförmedlingen has been commissioned to accept persons who are
coming back from sick leave means that the authority is accepting a wider
target group than previously, which places new demands on the operations.
4.6.2 Introduction activities
It is too early to make any statements about the introduction activities for
newly arrived since these activities only started in December 2010. However,
it is possible to highlight some of the explanations for why persons born
abroad may have a more difficult time on the labour market as well as to
present the conclusions the research has acknowledged as particularly
important regarding the integration of newly arrived.
Page: 115 of 130
The Swedish Long-Term Survey 2011, appendix 4 discusses five explanations
for the differences in the labour market results for persons born abroad: (i)
Human resources (education, work life experience, language skills and other
country specific knowledge), (ii) norms, search activity and networks, (iii)
the demands for employability, (iv) discrimination, and (v) policy measures.
Based on the discussion, the conclusion is made that the following factors are
particularly important in order to understand the differences in labour
market results between persons born in Sweden and persons born abroad:
Lack of language skills. Research has shown that knowledge of the country's
language is of determining importance for how well a person succeeds on the
labour market. This is, among other things, indicated by the fact that the
"employment and wage premium" of mastering the language of the country
is of importance. There are many indicators showing that persons born
abroad lack sufficient language skills for succeeding on the labour market,
something which is particularly true for newly arrived.
Insufficient access to informal networks. Many vacancies are filled via
informal search channels which mean that those who lack such contacts are
less probable to find work. Research show that the network of persons born
abroad is different from that of persons born in Sweden and that this
probably affects the labour market results. This applies both to the newly
arrived and to persons who, despite having lived in Sweden for a long period
of time, have failed to establish themselves on the labour market.
High demands on employability. The globalization, technological
developments and changes in the work organization have resulted in the
rationalization of low-skilled jobs and many occupations have changed in the
direction of increased demands on language skills and formal education.
There are many indicators showing that at least some persons born abroad
have problems with meeting the increased demands, something which
applies especially to newly arrived and persons with short educations. It is
however less probable that this is the explanation for the troubles of highly
educated persons, even if you cannot ignore the fact that some employers
find it difficult to value foreign education and experience.
Ethnic discrimination. The research shows that ethnic discrimination exists
on the labour market but it is still unclear how extensive it is and what type
of discrimination is the most common. However, there are indications that
both preferential discrimination and statistical discrimination occurs which
can affect all persons born abroad (see in-depth box).
Poorly designed policy measures. Studies show that society's policy
measures may have contributed in making the labour market integration of
persons born abroad more difficult, for example by creating lock-in effects.
Page: 116 of 130
The Swedish Long-Term Survey reaches the conclusion that factors
pertaining to the persons born abroad themselves (the supply factor), such as
language skills and the access to networks; factors with the recruiting
employers (the demand factor), such as choice of recruitment methods, the
demands of employability and discrimination; as well as society's policy
measures (policy factors), are important. In common for many of these
factors is that they are difficult to measure and therefore it is not possible,
based on the current research, to draw any conclusions on their relative
importance. Furthermore, the Swedish Long-Term Survey shows a
probability of the factors being linked and reinforcing each other.
At least two of these factors are possible to influence directly through labour
market policy. Language for one, since courses in the Swedish language is a
relatively straightforward measure to provide. Arbetsförmedlingen´s
activities can also work to widen the contact network of jobseekers in order
to decrease the barriers which the absence of informal networks otherwise
risks establishing. The work with employer contacts with the purpose of
convincing the employer to hire certain selected jobseekers is one work
method which can be implemented and which evaluations also have shown
to be successful in limited selections. If the difficulties instead are due to the
jobseekers lacking the competence required on the labour market, the
difficulties are rather like those many other jobseekers come up against and
are not related to country of birth. However, if the competence is difficult to
verify, work tests or an external validation of foreign education could
possibly remove some of the insecurities employers may experience. It is
generally the case here, as taken up in chapter three, that determining a
person’s qualifications is associated with costs for the employer. Employers
then tend to use the information from informal channels which is
disadvantageous for jobseekers with poorer contact networks.
Arbetsförmedlingen has tools for decreasing these costs and minimizing the
uncertainties and the risks for the employers.
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In-depth
Types of discrimination
Ethnic discrimination Within socio-economic research, there are two
types of discrimination. The first, so called preferential discrimination
assumes that there is a preference for, or rather an aversion against
persons who belong to a certain (ethnic) group. The methodological basis
for analyzing and systematizing this type of discrimination was
established by Gary Becker (1957). Some years later, another attempt to
explain discrimination on the labour market was presented, the so called
Statistical discrimination. This attempt acknowledges that there is
insufficient information of a jobseekers true productivity (see Arrow, 1998
for a more detailed discussion). Somewhat simplified, it says that an
employer can be assumed to have insufficient knowledge of a jobseeker's
productivity but that it is possible to distinguish that the jobseeker
belongs to a certain ethnic minority which for different reasons is
connected to good or bad qualities. Alternatively, that there is a great
uncertainty regarding the average skills of the ethnic group, for example
in terms of educational level. In this case, the employer has no aversion
towards the jobseeker's ethnic background but he attributes certain
qualities to the person without further examining whether they
correspond with the jobseeker's actual qualities. In practise, it is difficult
to distinguish between these two types of discrimination, among other
things, one would need exact information about the jobseeker's true work
productivity in order to determine whether discrimination has occurred
and in that case, which type.
The question of the existence of ethnic discrimination on the labour
market is difficult to answer. If differences remains between persons born
in Sweden and immigrants in the recruitment of labour (that is, even after
observable productivity differences such as education has been
examined), it could be due to productivity differences which are nonobservables for the scientist (for example language skills) rather than a
case of discrimination. One way to deal with these problems is to use
experiments which have been done by Carlsson and Rooth (2007) and
Bursell (2007). The approach in both studies was to send fake job
applications for jobs advertised in Platsbanken. The applications were
equal in quality with the small difference than in some cases the
applicant's name is Erik, and in other cases Mohammed. Carlsson and
Rooth (2007) found that in between 10 and 29 per cent of the cases, the
employer chooses to invite a person with a Swedish-sounding name for an
interview but not the person with a foreign-sounding name despite the
fact that the requirements for level of education and previous job
experience has been met. In a rough estimate which is based on a simple
matching model, Carlsson and Rooth (2006) finds that discrimination can
explain approximately 1/6 of the unemployment difference between
natives and immigrants in Sweden.
Page: 118 of 130
4.7 Further need for knowledge
In the survey which was made within the scope of the Swedish Long-Term
Survey 2011, a couple of areas were identified where the lack of research is
especially great. A few of these areas applies to the guarantees, the effects of
profiling and models for targeting. Targeting refers to the questions of which
person’s different measures primarily should be targeted at, when during the
unemployment period and for how long they should be provided. The
knowledge about how the labour market policy shall be adjusted to the
business cycle is another area where the knowledge can be deepened.
Especially in regards to the dimensioning of programme volumes.
Another area where more studies are needed is the effects of placement
efforts. There are currently only a few studies, whereof which several were
for special groups, which examined the effects of reinforced placement
services. More studies would be appreciated on how the Employment
Services can adapt their services and methods in the best way possible so
that private providers can best contribute to a well-functioning labour
market.
A common factor for the areas where no studies exists is unfortunately that
they are difficult to evaluate. Often, there is no relevant data available to
make such an evaluation. Placement activities is a good example of this.
There is a lack of time use data on how much time is allocated to different
jobseekers and which actual measures they benefit from during this time.
This applies to the majority of the methods implemented on the employment
offices and it applies specifically to the work performed by private providers.
Competition can elicit more efficient methods within the procurement
activities, at the same time as compensation models designed in error may
mean that the quality of the measures suffer. For the dissemination of good
examples and in order to produce efficient control models there is incentive
to obtain such knowledge.
Furthermore, most placement measures are included in the employment
office's basic range and is therefore provided for unemployed persons on
many different occasions. This compared to labour market training, which is
often provided at a single occasion to a very limited group. Evaluating the
effects of placement measures occurring in sequence is therefore difficult in
many cases . To facilitate evaluation and development it is therefore vital to
consider as early as in the design stage whether a measure or effort can be
evaluated and followed-up in a satisfactory manner. Follow-up is vital for the
possibilities of designing an efficient labour market policy. A good way of
doing this is conducting more experiments with randomly assigned
treatment and control groups. In Denmark there is a strategy to advance the
understanding of different activities gradually. The Danish Employment
Service has committed to performing 1-2 high-quality experiments annually.
Page: 119 of 130
Such a strategy could be fully viable in Sweden as well, and it would put a
clear focus on areas of particular relevance for developing efficient
employment services activities.
The knowledge about the importance of the internet in the recruitment
process is relatively limited. The most recent study (Harkman et al. 2003)
was conducted in the early 2000s and a lot has happened since then. Special
focus could be put on the selection process and the importance informal
networks have with an increased use of web-based recruitment channels.
There are reasons to further develop the search and matching model which
was described in chapter three and which highlighted stylized connections
between different policy parameters and influences on the labour market's
efficiency. One way to continue the work would be to parameterize the model
in order to describe possible scenarios at different policy measures.
The subsidy structures between different individual recruitment incentives
will also need to be investigated further. There are current indicators
showing that different types of wage subsidies displace each other. The
majority of the subsidies are directed at people who have been absent from
the labour market for a longer period of time. But the support is not
necessarily designed so that persons who would benefit the most from the
individual recruitment incentives actually have access to them.
The knowledge of the commission within the unemployment insurance is
also limited. The scope of notifications regarding questioned compensation
within the unemployment insurance is on a low-level. It is currently
impossible to determine whether the level is correctly balanced for the
search activity to be maintained on a reasonable level. The sanction level has
despite of this been highlighted as a special issue as employment officers are
not currently allowed to give informal warnings to jobseekers who are not
meeting the requirements of the insurance. Such information shall be given
when the jobseeker is registered and not after a potential violation. In other
countries, such warning procedures are formalized and used in statistics.
There may be cause to implement similar forms of sanctions in a small trial
to investigate the consequences of changed sanction levels.
Several questions relating to the use of private providers within the
employment service activities may also be worth investigating in more detail.
One such question regards the assignment within the unemployment
insurance. Private providers build a successful operation by attracting
customers and helping them enter the working life. The monitoring function
has the opposite effect: too strict a control decreases the interest in turning
to the specific provider. Perhaps there is reason to consider whether it is
possible to separate the monitoring function from the advisory one. Another
Page: 120 of 130
question regards the design of the agreements with the private providers
which should simultaneously attract them to working with more difficult
cases and quickly helping them find employment. The level of compensation
must be connected to the jobseeker's actual difficulties in finding a job, if
not, the operations will be given too small a dimension or the costs will be
unnecessarily high. One way of doing this is to connect the compensation
models to profiling assessments which would mean an increased
transparency and equal allocation of resources. There are reasons to conduct
in-depth studies on this.
Arbetsförmedlingen´s mode of delivery; customer services, has not been
evaluated at all which is reflected in the fact that there are no references to it
in chapter four. Since Arbetsförmedlingen´s operations are built on four
types of modes of delivery, local employment offices, Arbetsförmedlingen
Online, customer services and private providers, there lies a value in
evaluating these in relation to each other. - Which persons receive the best
support through different channels and how many are directed via each
mode of delivery? Such knowledge would make it possible to dimension the
extent of the different modes of delivery in relation to each other.
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Swedish Code of Statutes (SFS)
The Employment Service Board's administrative regulations (AMSFS
2005:4) on administration of Employment Service matters.
Page: 125 of 130
Explanation of terms
Action plan a plan which clarifies what shall be done in order for the
jobseeker to find work. The action plan shall ensure that the jobseeker
adheres to an efficient search strategy and that the jobseeker can take
advantage of the appropriate services. The plan shall be individual for each
jobseeker and so clearly formulated that in an evaluation it shall be possible
to establish whether or not the jobseeker has fulfilled the agreement in the
action plan.
Activity support is support for the individual's maintenance in some of the
labour market programmes. Försäkringskassan calculates and pays out
activity support. The person who is entitled to unemployment benefits or is
no longer covered by the unemployment insurance receives the same
compensation as would have applied for unemployment, however, no less
than SEK 320 per day.
The Beverigde curve is usually used to summarize the connection
between vacancies and unemployment. The Beveridge curve presents the
relative unemployment on the horizontal axis and the relative vacancy rate
on the vertical axis.
Coaching see job coaching
Deactivation a unemployed person leave the Employment Services and
becomes de-registered.
Demand for labour the number of vacancies plus the number of filled
vacancies.
Displacement effect when a measure displace regular employment. I.e.,
when a person is hired with support, there is still a possibility that the
individual could have gained the employment without support or that the job
would have been created anyway and another person would have been
employed. In both cases, the direct effect of the measure will wholly or
partially be counteracted by indirect effects mentioned above.
External job coach job coach with a private provider.
Equilibrium is in search and matching models a stable state where the
inflow and outflow to unemployment are equally large and central
parameters as wage and tightness are constant over time.
Equilibrium Unemployment the level of unemployment which is
independent of the state of the business cycle, the observed unemployment
Page: 126 of 130
will also include the level of unemployment which is dependent of the state
of the business cycle. The term equilibrium unemployment can best be
compare to with what in older literature was called structure and friction
unemployment.
Friction or Search friction it takes time for employers and jobseekers to
find each other. Employers will in general have demands for a certain type of
competence and have a certain limit on the wages they offer. The jobseeker
also has demands for a certain wage and other employment conditions.
Finding a "match" which satisfies both parties can take time.
Internal job coach coach at Arbetsförmedlingen.
Job chance a calculation of the probability of a jobseeker finding
employment during a certain time period. The job chance can also be called,
hazard rate, transition probability or incidence, often depending on the
research area.
Job coaching personal help from Arbetsförmedlingen or a private provider
to jobseekers in order to increase their chances of finding work.
Labour force the sum total of persons in employment or unemployment.
Labour market policy the policies directly focussed on making the labour
market function better and to mollify the effects of the unemployment which
still arises.
Labour market policy measures and programmes measures which
aim to improve the jobseeker's chances of finding a job.
LFS Statistic Sweden's labour force surveys.
Market failures when the market economy does not provide socioeconomically efficient solutions.
Matching the event of hiring, when a vacancy and a jobseeker are brought
together.
The matching function the number of matches brought about on the
labour market in relation to the number of jobseekers and the number of
vacancies. The more efficient the matching function is, the quicker the
matching will be which in turn will decrease the periods of unemployment
and vacancies.
Page: 127 of 130
Monitoring function In order to prevent the unemployment insurance
being abused, there is a need for continuous monitoring to establish that the
jobseeker is actually fulfilling the imposed requirements in order to receive
right to compensation. Arbetsförmedlingen has been given a special
commission by the government (SFS 1997:238) to monitor the jobseeking
activity and to inform the unemployment fund if there is a reasonable cause
to suspect that some of the requirements are not fulfilled.
Notification Arbetsförmedlingen is obliged to inform the unemployment
fund of such things that might affect the right to compensation for
jobseekers who receive or apply for unemployment compensation and which
Arbetsförmedlingen suspects the unemployment fund does not know about.
The information shall be submitted from Arbetsförmedlingen to the
unemployment fund by means of a notification. After investigation, the
unemployment fund will take a decision regarding the jobseeker's right to
compensation.
Openly unemployed Persons who are without work and can start working
immediately. Persons participating in programmes with activity support are
not included in this group.
Private provider a private company which conducts placement activities
in return for compensation from Arbetsförmedlingen.
Profiling a statistic method for predicting the risk of long-term
unemployment.
The recruitment period how long it takes employers to fill vacancies. Can
be estimated by the quota between the number of vacancies and the number
of new hires.
Redundancy notice Employers who plan to implement cutbacks in their
operations which concern at least five employees in a county must notify
Arbetsförmedlingen in writing. This also applies if the cutbacks during a
period of 90 days can be suspected to result in a total of at least 20
redundancies. The purpose of the redundancy notice rules is to enable the
labour market authorities to plan and implement the measures necessary to
facilitate the transition for the concerned personnel.
Referral a referral urges the jobseeker to apply for a particular vacancy. If a
jobseeker with unemployment compensation neglects to apply for a referred
suitable job, the employment officer shall notify the unemployment fund.
Page: 128 of 130
Reservation wage the lowest wage the individual demands in order to
accept a job offer. The term reservation wage is central in the economic
search theory.
Search theory studies within labour market economics regarding the
individual's optimum strategy when it comes to balancing between accepting
a job offer now compared to continue searching in the hope of finding a
better offer. The higher the cost of waiting is, the greater the probability of
accepting an early offer is.
Statistics Sweden Statistics Sweden is an administrative agency.
Targeting a statistical method to assess, based on evaluations of the effect
of various efforts, which effort has the greatest preconditions for reducing
the unemployment period for a unemployed person.
Tightness or the labour market's tightness, is the quota between the
number of vacancies and the number of unemployed.
Unemployed see Openly unemployed
Vacancies vacancies reported to Arbetsförmedlingen.
Vacancy a vacant job which can be filled immediately and which is not
currently manned. This means that a vacancy temporarily replaced by
another employee, temporary employee or hired staff, is not a vacancy. A
placement reported to Arbetsförmedlingen is therefore not necessarily a
vacancy based on this definition. A vacancy is in other words an unsatisfied
demand for labour.
Arbetsförmedlingen 2011-06. Rekv.nr: 803 310. Omslagsbild: Björn Tesch
THE SW ED I SH PU BL IC E M PLOYM E N T SE RV IC E
V is i t ing a d dr e s s : H äl s inge g at an 3 8 , St o ck h o lm
P o s t al a d dr e s s : 11 3 9 9 St o ck h o lm
Te l e p h o n e : 0 7 71- 6 0 0 0 0 0
w w w. ar b e t s f o r m e dl inge n. s e

Labour Market Report

Transcription

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