Aligning active labor market policies with national growth strategies: a comparative study of Portugal and Spain

Abstract Between 2000 and 2019, Portugal and Spain adopted divergent youth-oriented active labor market policies (ALMPs) to address rising youth unemployment. Drawing on data from the LABREF database, National Reform Programmes, and key economic indicators, we show that Portugal targeted higher education graduates with internship and innovation schemes aligned with its transition to a knowledge-based economy. In contrast, Spain developed a dual vocational education and training system centered on apprenticeships to support its manufacturing sector. These contrasting approaches reflect distinct national growth strategies and demonstrate how governments shape ALMPs in line with broader economic objectives. The findings offer a comparative perspective on policy divergence in Southern Europe and highlight the role of growth strategies in explaining variation in activation policies, even among countries with similar institutional and macroeconomic conditions.