Lessons from active labor market programs in Greece

Despite progress pre-COVID-19, Greece has a 15.8% unemployment rate — double the EU average —and 70% of the unemployed have been out of work for a year or more. These challenges underline the importance of effective active labor market programs (ALMPs).  A recent ALMP model in Greece showed promising results, with pilot participants being twice as likely to have been employed after the pilot , and the lessons from it may be useful in other contexts.

In late 2018 Greece piloted a reformed ALMP model to help the unemployed find jobs. The pilot took place in three municipalities covered by the Elefsina local office of the national public employment service (OAED).  Key elements include systematic segmentation of jobseekers, increased counseling capacity, a more diverse offering of upgraded programs, and better monitoring.  The target group consisted of people ages 45 and above who were registered unemployed for at least six months. 

Pilot participants improved their chances of getting a job even with the labor market and target group challenges.  Many received training in basic skills and technical specialties and participated in internships.  Specific aspects of the knowledge generated may be of interest to other countries reforming ALMPs.

Using Profiling to Support Job Counselors

In the new ALMP model, before meeting with a counselor, jobseekers filled out an online questionnaire. The answers were used in a statistical analysis of how likely the jobseeker would find a job on their own, considering factors such as skillset, job search activities, and any obstacles, such as family commitments.  Counselors used this information as a starting point to discuss next steps, including participation in training and creating an Individual Action Plan (IAP) with the unemployed.  A side benefit was that the unemployed liked the attention on employment and the self-assessment of their goals for a job. 

Converting Labor Market Data into Usable Information    

By using labor market data drawn from government data sources and firm surveys, and on new hiring by employers, OAED was able to focus the training programs on the skills being demanded by local firms, for example, logistical services such as warehouse workers.  On the other hand, job counselors need more training and guidance before they will be able to use the data to advise jobseekers.

Tailoring Training to the Needs of Trainees

Often in the past some of those interested in training could not attend because of gaps in their basic skills, while others who had more skills wasted time repeating material they already knew.  The pilot offered basic skills training such as numeracy, literacy, or information technology to participants with shortfalls.  The more technical training for jobs in restaurants, offices, retail establishments, warehouses, and as security guards and truck drivers, was shortened for those with some knowledge. 

Ensuring Third Party Certification of Training

Training that results in credentials has more positive employment outcomes.   Pilot participants said they were “interested in training if it leads to certification because that may lead to a job.”

Since it proved complex to secure certification with the National Organization for the Certification of Qualifications and Vocational Guidance (EOPPEP), OAED made arrangements with independent accredited assessment centers for 7 specialties: bartender, forklift driver, office clerk, retail and wholesale salespersons, waiter, and warehouse guard (about 60 percent of trainees).  As of October 2020 (the latest data available) 371 trainees had sat for the exams and all but 4 were successful.

Analyzing Incentives

The process evaluation revealed that some trainees were motivated by the allowance, rather than to gain employment.  Trainees received 600 euros/month while they were in classroom training and the subsequent internship, totaling 6-8 months depending on the program.   Comparing the money a jobseeker could receive participating in other options ­— ALMPs, informal or formal job, and the Guaranteed Minimum Income Program — suggested that they paid less than training, confirming the strong incentive to pursue training simply for the money.  In the future, the training allowance should be reduced and only paid for the internship, not for the classes beforehand. 

Using Administrative Data to Measure Outcomes

We were unable to carry out a rigorous impact evaluation, however we did manage to get an idea of the pilot’s outcomes by using data on the newly hired and information that OAED has on the unemployed using a non-experimental evaluation design.  Our analysis showed that pilot participants (having an IAP) were 3 percentage points more likely to be employed and 5-6 percentage points less likely to be registered unemployed.

Though these findings aren’t conclusive, our process showed that it’s possible to obtain some information on outcomes using readily available data.

World Bank technical assistance activities were carried out with funding by the European Union via the Structural Reform Support Programme and in cooperation with the European Commission's DG REFORM.)