The Cost-Effectiveness of Active Labour Market Policy (a Case Study of Slovakia)

Active labour market policy is a tool for returning the unemployed to the labour market, and in a current economic situation with the influence of many factors and limited financial resources, the cost-effectiveness of any policy has crucial importance.These policies aim to assist problematic groups, including the long-term unemployed, persons with disabilities, those over fifty years of age, and recent graduates.Labour market measures include graduate practice, job search assistance, training and retraining courses, wage subsidies, and direct employment support.Active labour market policies often feature programs targeting specific groups to help them secure suitable employment.Each year, a budget is allocated for these programs, and evaluating their cost-effectiveness involves comparing the benefits and costs of selected labour market programs.This study aims to compare the benefits in the form of impact of participating in labour market programs in Slovakia on participants' earnings and employment with the costs of each program.The comparison was done based on selected research papers which were focused on analysing the impact of labour market programs in Slovakia in the years 1999-2021.The cost calculation for each program per participant was done based on the report from the Central Office for Labour, Social Affairs and Family in Slovakia.The findings indicate that certain programs are cost-effective and positively influence participants' employment and earnings.Conversely, some programs with high costs have detrimental or even negative effects on participants.The results clearly show that the high costs are not always aligned with program effectiveness, highlighting the need for more programs focused on effectiveness rather than merely fund allocation.