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Reduction of federal spending on active labour market programmes (ALMPs) for people in receipt of unemployment insurance

Country of implementation
Switzerland
General short description of the innovation
The mode of financing of ALMPs changed, passing from a maximum lump-sum amount paid for every unemployed person to a dynamic funding mode contingent upon Cantonal average unemployment rates. For Cantons in charge of implementing ALMPs, this new funding mode can imply a reduction of expenditure on ALMPs by up to 50%, especially in Cantons with high unemployment rates. / As a counterpart, budget caps have been abolished for certain categories of ALMPs, like wage subsidies to employers hiring older unemployed or self-employment support, in order to encourage the use of these particular programmes. / These changes are part of the 4th revision of the federal law on unemployment insurance-LACI, 2011.
Target group
Total Population
Policy Field
  • employment
Type of Policy
  • public
Duration of the policy
In force since 2011
Scope of innovation
  • Scope: structural
  • Budgets: in 2010, the measure was expected to achieve cost savings of about 60 mios CHF each year ? 49,4 mios Euros
  • Number of intended beneficiaries: unknown
  • Spatial coverage: national
General description of (intended) objectives and strategies
The objective was to reduce expenditures on ALMPs by 10% and also to encourage the Cantons to reorganize and reorient their portfolios of ALMPs towards to the most efficient programmes.
Nature of the innovation-short-term perspective
strong
Type of innovation
  • other (New mode of funding)
New outputs
  • job guidance, coaching and/or counselling (type of ALMPs encouraged at the expenses of more expensive training or public employment programmes)
  • subsidies/tax-credits (the use of wage subsidies to employers is encouraged (at the expenses of other types of ALMPs like training or public employment programmes))
Intended target group
Unemployed people, and more particularly older unemployed
Working age population
  • main source of income: social protection (unemployment insurance)
Actors involved in policy-making/implementation and/or evaluation
  • agency or national social insurance body (Cantonal PES)
  • central state
Clarification of the role of various actors
Cantonal PES as the implementation agent directly affected by the change.
Intended output
  • others (expenditures on ALMPs have declined by 12% between 2011 and 2013)
  • subsidies/tax-credits (the number of wage subsidies to employers hiring older unemployed has slightly increased )
Clarification of outcomes in terms of impacting resilience and labour market inclusion
The change in the funding mode of ALMPs improves the chances of older unemployed to get back into work. However, its effective impact on the social inclusion of older workers seems so far limited, as wage subsidies remain rather rarely used as compared to other training or public employment programmes.
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