Active labour market policies

Active labour market policies (ALMPs) are government programmes that intervene in the labour market to help the unemployed find work. Many of these programmes grew out of earlier public works projects, in the United States particularly those implemented under the New Deal, designed to combat widespread unemployment in the developed world during the interwar period. Today, academic analysis of ALMPs is associated with economists such as Lars Calmfors and Richard Layard. Demand-side policies are policies used by the government to control the level of Aggregate demand (AD).
Active labour market policies are prominent in the economic policy of the Scandinavian countries, although over the 1990s they grew in popularity across Europe. Notable examples include the New Deal in the UK and many welfare-to-work programmes in the US.
Origins of ALMPs.
The first active labour market policy measures date back to 1951 with the creation of the Rehn-Meidner model in Sweden developed by two economists from the social democratic trade union movement to modernise post-war Swedish industry and enhance productivity by combining a unified wage policy of solidarity which, as it progressed centrally, eliminated the least competitive industries among the country while offering a substantial retraining package to the workers thus laid off so that they could join the more modern and efficient industries.
Attempts at active labour market policies were also made in Italy in the 1950s to train low-skilled workers in the south to join dynamic factories in the north.
Concept of Social Investment.
Active labour market policies are based on the concept of social investment, which rests on the idea of basing decision-making on the welfare of society in quantifiable terms, by increasing the employability, incomes and productivity of economic agents, so this approach interprets state expenditure not as consumption but as an investment that will produce returns on the welfare of individuals. The adoption of this concept has thus added to the traditional task of social policy to maintain income levels that of promoting labour market integration by removing barriers to entry through state intervention.
Program types.
According to Giulano Bonolli, there are four main categories of ALMPs:
The politics of ALMPs.
A number of authors have argued that countries with stronger left wing political parties and trade unions have more developed ALMP. On the other hand, social democratic parties may not promote ALMP if their constituents are well protected workers and hence face little risk of being unemployed. More recently, the notion that different types of ALMP have similar political determinants has been contested. In the United States and Great Britain, fragmented and under-resourced ALMPs have been attributed as a factor in the rise of populist backlash politics in the Rust Belt and post-industrial northern England during the mid-2010s.
Levels of Implementation.
Active labour market policies in general are mainly prevalent in the Nordic countries (with the exception of Norway), notably in Denmark where such expenditure represented almost 2% of GDP in 2017 compared to an OECD average of 0.52% this same year whereas on the contrary, Eastern European countries invest less in these policies. (with the exception of Hungary).