Evaluation of ‘Plus job’ scheme for long-term unemployed

An evaluation of the ‘Plus job’ programme in Sweden indicates that it had positive effects on the labour market, and the social partners were satisfied with the scheme. The initiative sought to improve the situation of long-term unemployed people and to enhance the service level in the public sector. However, the termination of the programme has caused acrimony between the local authorities and the government, with the former threatening legal action.

Context

The Swedish labour market has seen many different programmes and policies come and go. The current centre-right majority government prioritises marginalised groups in its policies by increasing incentives to work (SE0705019I, SE0710029I). One of many new incentives is the new start jobs reform (nystartsjobb) (SE0703019I); another plan is to set up so-called ‘New Start Offices’ (Nystartskontor) to combat social exclusion and foster employment (SE0803019I).

Labour market policy was among the most debated issues during the 2006 general election campaign, and there is considerable interest therefore when evaluations of the former government’s labour market programmes are published. A recent example is the follow-up of the Swedish employment ‘Plus job’ (plusjobb) programme.

Assessment of programme

The Institute for Labour Market Policy Evaluation (Institutet för Arbetsmarknadspolitisk Utvärdering, IFAU) evaluated the Plus job programme in a 2007 report (in Swedish, 750Kb PDF). The programme had three objectives, namely to:

  • improve the labour market status of long-term unemployed people;
  • enhance the general service level in the public sector due to an increased number of personnel – only public employers could hire Plus job participants;
  • reduce the negative effects of a large-scale wave of retirement in the future, by continuously training new ‘Plus jobbers’ who could replace retired employees.

To avoid the danger that subsidised workers would replace regular employment by the so-called ‘crowding out’ effect, the Plus jobbers – whose pay costs were 100% subsidised – could only do tasks where the labour market could not fulfil the public need. The initiative operated from January 2006 to October 2006, when the new government terminated the scheme after the general election at that time. The approximately 20,000 people who had found a job through the Plus job programme were kept on for the planned two-year period, but no new participants have been recruited. This means that about 15,000 people are still in the programme, but the government has substantially decreased its funding to the local authorities.

The IFAU evaluation indicates that the programme has been successful in achieving its objectives: long-term unemployed persons entered the labour market and improved their employability, and employment in the public sector increased. Negative side-effects, such as crowding out, were marginal.

Reaction of social partners

Trade union view

Over 80% of those who found a job through the programme are affiliated to the Swedish Municipal Workers’ Union (Kommunal), which expressed its satisfaction with the programme. The trade union considers that the initiative fulfilled its objectives and that it was an appropriate way for long-term unemployed persons to access the labour market. Kommunal was involved in deciding what tasks the Plus job workers would do, which minimised the risk of crowding out other employees. According to the trade union, the programme was suited to the purpose, but it should have included the social partners earlier in the process. The initiative had a slow start, and when it finally was fully operational, the new government terminated it – which seemed unsatisfactory, according to Kommunal.

Employer view

The Swedish Association of Local Authorities and Regions (Sveriges Kommuner och Landsting, SKL) also believes that it was a useful programme. It fulfilled its aim to encourage long-term unemployed people into the labour market and enhanced the service level in the public sector. The advantage of the programme was its long-term scope, which gave the participants a good view of the working life in an established organisation.

However, SKL was disappointed when the government ended the initiative, not least because a grant of €16 a day per Plus job worker for additional costs, such as personal training, was withdrawn with immediate effect. SKL believes that the programme lost its purpose without this training feature. Moreover, the contract had a six-month term of notice, but the government only gave one month’s notice. This implies a clear breach of contract, according to SKL, and therefore many local authorities are considering legal action.

Government view

The Ministry of Employment (Arbetsmarknadsdepartementet) argues that, at the time the programme ended, the government was in a particular situation immediately after the general election. The Swedish Public Employment Service (Arbetsförmedlingen) continued to recruit for one week until the new public bill was passed, which considerably escalated the cost of the scheme. Some 4,400 additional Plus jobs were offered in that period, and this had to be financed. The government chose to withdraw the additional training grant, instead of reducing funds in other programmes; however, the subsidy still amounts to 100% of the worker’s wage. The Ministry of Employment states that it cannot be held responsible for breaching a contract that the former government initiated, although it describes the situation as unfortunate. The ministry does not believe that the local authorities would succeed in a civil law process.

Thomas Brunk, Oxford Research

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