Public policies targeting labour market rigidities

Abstract

Labour market rigidity becomes an issue of increasing importance under conditions of shocks associated with the economic crisis due to the need to increase the adaptability and responsiveness to them. Thus, labour market policies must be directed towards mitigating rigidities caused by institutional or demographic factors or certain mismatch between demand and supply of education qualifications. This paper highlights the major role of the active labour market policies targeting the increase of labour flexibility, stressing the importance and impact on the ability to adapt quickly and effectively to macroeconomic shocks. Located on a declining trend in the years preceding the crisis, spending on labour market policies increased in 2009 in all the Member States of the European Union. Spending differences are significant between countries, Romania being at the lowest end of the European Union. This requires special attention because the increased adaptability of workers through training, as active measure, is of major importance considering the increased speed of changes in the labour market.

Keywords

• active labour market policies
• labour market flexibility
• public employment services
• training
• labour market activation