Analele Universităţii Constantin Brâncuşi din Târgu Jiu : Seria Economie (Jun 2015)
INQUIRY REGARDING THE SUSTAINABILITY OF ACTIVE LABOR MARKET POLICIES IN ROMANIA
Abstract
Active labor market policies (ALMP) are often used to assist in structural adjustment, including change to information society, and to prevent the jobless from getting ensnared in long-term unemployment. ALMPs can help reduce dependency on public transfers, especially in recent years when countries have struggled maintaining financial sustainability due to the global financial crisis and large public debt, by assisting workers in finding jobs. The main types of ALMPs have different ways of accomplishing the same objectives, chief among those reducing unemployment. As a result, ALMPs are frequently costly. There are two measures to determine the importance of ALMPs at the macro level: 1) the number of workers in an ALMP program as a share of the labor force; and 2) the public expenditures on ALMPs as a percentage of GDP. This paper will focus on the second measure, public expenditures on ALMPs as a percentage of GDP, to examine the importance of ALMPs in Romania, the financial sustainability of the public policies, and attempt to empirically illustrate how they impact the labor market. The paper concludes with a discussion of the policy issues associated with ALMPs in Romania.
