Impact of Labour Market Measures on Unemployment

Abstract

The paper analyses the impact of labour market measures on unemployment. It defines institutional and active 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 internal factors. Labour market answers the changes of the economic environment, therefore the decrease of general production volume, production exports and investment flows during the economic recession reduce vacancies and increase unemployment. It is claimed that the person, who lost his job, experiences financial shortage as well as faces the social - psychological problems, which often have to deal with the State devoted financial resources. The situation in the labour market is proposed to improve applying some different measures. The experience of some countries shows that there is a variety of labour market regulation and unemployment support measures, but the measures determined the positive effect on labour market in one countries not definitely appear as active in the other group of countries. It is argued that the labour market liberalization can create more opportunities to establish new working places, which would satisfy the needs of people who lost their job, and the changes would be beneficial for both employers and employees. Still, the labour market liberalization in the country is rather controversial. Although a lot of researchers and practitioners deal with the problems of labour market, still there is lack of an analysis on the effects of labour market measures. The paper generalizes the experience of labour market liberalization and the impact of labour market measures on unemployment in the country as well as in other foreign countries.

http://dx.doi.org/10.5755/j01.ee.22.2.315