ALMPs in the North

Abstract: The subject of this paper is to determine the importance of different Active labour market policies (ALMP) on the unemployment rate in the Nordic countries of Sweden, Denmark, Norway and Finland between the years 2000 and 2020. The ALMPs examined are Public employment services (PES) and administration, Training, Employment incentives, Integration of the disabled, Direct job creation and Start-up incentives. Knowing the effect of each measure can lead to more efficient spendings and a more efficient lowering of the unemployment rate. To find the impacts of the measure, the first part of the paper examines earlier research on the subject and analyses their findings. The second part examines the differences and similarities in labour markets between the Nordic countries to enhance the understanding of how each ALMP has a different impact in the different countries. Lastly, an econometric model is used to see how each measure affects the unemployment rate. The result showed integration of the disabled and start-up incentives to be the only measures lowering unemployment in the short run, but neither was shown to be significant. The one-year lagged variable displayed how PES and administration, direct job creation and employment incentives had a significant impact on lowering the unemployment rate. The conclusion is that an increased spending on direct job creation and employment incentives can lead to a lowering of the unemployment rate while the spending on training and PES and administration should be re-examined by the countries