Expanding Labour Market Effect Measures: Measuring Distance to the Labour Market As Increase or Decrease in Barriers Hindering Access to the Labour Market for the Unemployed

Do Active Labour Market Programmes (ALMP) reduce the number of barriers hindering unemployed persons entering the labour market? Studies show that ALMPs have little, non-existent or negative effect on unemployed persons who have been assessed by their case worker to have problems besides unemployment. These studies typically use subsequent employment or reduced welfare benefit dependency as effect measures.

There are no validated effect measures that include steps before actual entry to the labour market; steps in which the unemployed may come to feel healthier, happier, more confident etc. Therefore I develop and test a graduated measure of distance to the labour market. The measure explicitly factors in a complex set of barriers assumed hindering entrance to the labour market for unemployed individuals. The measure consists of internationally recognized measures of and questions on well-being, health, and happiness supplemented by questions on e.g. subjective feeling of readiness for work. Indeed, among the group in question, issues in these areas of life are widespread, and so focusing on these aspects may show other results regarding the effects of ALMPs than previous research.

I test the measure as an indicator of distance to the labour market in three ways. I: 1) analyze data from a panel survey on a sample of 4,400 unemployed from Copenhagen, Denmark, with waves in 2013 and 2014, 2) assess whether the measure is a good proxy for future employment using detailed data from administrative registers, and 3) compare the measure to findings from qualitative interviews with case workers and unemployed.

In developing the measure, I draw on marginalisation theories in viewing unemployment as degrees of marginalisation from, at the one end, social exclusion from the labour market and, at the other, social inclusion in the labour market, where health and related problems act as a barriers against inclusion.