Impact of Labour Market Measures on Unemployment

  • Daiva Berzinskiene Siauliai University
  • Liongina Juozaitiene Siauliai University
Keywords: labour market, unemployment, active labour market measures, passive labour market measures, labour market liberalization.


The paper analyses the impact of labour marketmeasures on unemployment. It defines institutional andactive labour market measures (ALMSs) as well as passive(unemployment benefits) labour market policies.Considering the fact that labour market is an open system,its function is influenced by many external and internalfactors. Labour market answers the changes of theeconomic environment, therefore the decrease of generalproduction volume, production exports and investmentflows during the economic recession reduce vacancies andincrease unemployment. It is claimed that the person, wholost his job, experiences financial shortage as well as facesthe social – psychological problems, which often have todeal with the State devoted financial resources. Thesituation in the labour market is proposed to improveapplying some different measures. The experience of somecountries shows that there is a variety of labour marketregulation and unemployment support measures, but themeasures determined the positive effect on labour marketin one countries not definitely appear as active in the othergroup of countries. It is argued that the labour marketliberalization can create more opportunities to establishnew working places, which would satisfy the needs ofpeople who lost their job, and the changes would bebeneficial for both employers and employees. Still, thelabour market liberalization in the country is rathercontroversial. Although a lot of researchers andpractitioners deal with the problems of labour market, stillthere is lack of an analysis on the effects of labour marketmeasures. The paper generalizes the experience of labourmarket liberalization and the impact of labour marketmeasures on unemployment in the country as well as inother foreign countries.