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Training for employment in Sweden (Перекваліфікація для працевлаштування у Швеції)

Научная статья

Экономическая теория и математическое моделирование

Training programs for the unemployed have been cornerstones of labor market policy for many decades. In Sweden, training programs have been used since 1918 and constitute an important part of the so-called Swedish model (or Nordic model) of labor market policy. Among Sweden’s current programs, the employment training program...

Английский

2015-03-10

18.38 KB

1 чел.

УДК  377.344(485)

Training for employment in Sweden

(Перекваліфікація для працевлаштування у Швеції)

Бойчук Дмитро, ст. 2-го курсу, гр. Фвн-21

Науковий керівник - к.п.н., ст. викладач Мовчан Л.Г

Вінницький навчально-науковий інститут економіки

Training programs for the unemployed have been cornerstones of labor market policy for many decades. In Sweden, training programs have been used since 1918 and constitute an important part of the so-called Swedish model (or Nordic model) of labor market policy. Among Sweden’s current programs, the employment training program (which we denote by its Swedish acronym AMU) is the most prestigious. AMU aims to improve the chances of unemployed job seekers to obtain a job, by way of substantive skill-enhancing courses. In 1997, on average 37,000 individuals were participating in AMU per month, which corresponds to over 10% of total  unemployment. AMU is the most expensive active labor market program in Sweden and as such it adds to the tax burden[3].

The aim of the article is to analyze the effect of the AMU on the individual transition rate from unemployment to employment. AMU fits well into the methodological framework, contrary to other labor market training programs and active labor market programs in Sweden[2]. The problem of unemployment in Sweden has been studied by Erikson, Zeltermark, Carting and Richardson and other.  Some of these deal with the interaction between the inflow into active labor market programs in general on the one hand, and expiration of benefits entitlement on the other. A major practical advantage of the Timing of Events approach is that it does not just lead to a single estimated treatment effect, but instead it allows for estimation of how the causal training effect changes over time. To date, a few econometric studies have addressed the effect of AMU on unemployment duration. Harkman and Johansson (1999) and some replication studies examine individuals who finish a program in the final quarter of 1996. Harkman and Johansson (1999) use a subset of the data that we use and match it to data from a postal survey conducted in late 1997 [5]. They estimate a bivariate probit model on the employment probability at one year after the program, for different programs.

Their results indicate that persons in AMU have a higher probability to get a job. Subjective responses on the perceived importance of program participation agree to the estimation results.

The purpose of the AMU program is to improve the chances of job seekers to obtain a job, and to make it easier for employers to find workers with suitable skills. This means that it aims to increase unemployed individuals’ transition rate to work. The program attempts to achieve this by way of the participation of individuals in training and education courses.

By participating in a program, the unemployed individual ensured that his benefits entitlement was extended until completion of the program; in fact, if the participation exceeded a few months then the new entitlement extended further into the future.

In January 1993, a new large program called ALU (“work experience”) was introduced to end the abuse of AMU for benefits entitlement extension.

There are two types of AMU training: vocational and non-vocational. Vocational training courses are provided by education companies,  universities, and municipal consultancy operations. The local employment office or the county employment board pay these organizations for the provision of courses. The contents of the courses should be directed towards the upgrading of skills or the acquisition of skills that are in short supply or that are expected to be in short supply. In recent years, most courses concerned computer skills, technical skills, manufacturing skills, and skills in services and medical health care. Vocational training is not supposed to involve the mastering of a wholly different occupation with a large set of new skills [4].

Non-vocational training (basic general training) concerns participation in courses within the regular educational system, i.e. at adult education centers and universities. Non-vocational training specifically intends to prepare the individual for other types of training (so that the aim of an increased transition rate to work is less direct here).

In the mid-1990s, about 40% of the inflow into unemployment and about 65% of the stock of unemployed qualified for UI (Carling, Holmlund and Vejsiu, 2001). Part of the remaining 60% received “cash assistance” benefits, which are typically much lower than UI benefits. The average replacement rate for UI recipients is about 75% [3].

During the training, the participants’ income is called a training grant. Those who are entitled to UI receive a grant equal to their UI benefits level, with a minimum of SEK 240 per day (which is about $24). The other participants receive a grant of SEK 143 per day. In all cases, training is free of charge [6].

In Sweden there is a number of other active labor market programs, because  Sweden has been the country with the highest percentage of 900 spending on active labour market policies in the world.

These programs are open for persons below 25 or over 55 years of age. Young persons must participate in a program after 100 days of unemployment, or  therwise they lose their unemployment benefits. Persons over 55 receive

unemployment benefits for 450 days [7].

The case worker also estimates the individuals need, skills and abilities. The applicants undergo a test in order to find out if they are able to benefit from the course. Sometimes the applicant should write a personal letter that explains why he wishes to participate in a specific AMU-course. According to the statistical data those who participated in these programs have more chance to get a job 10% of the participants joined labour market moreover with 47% of the participants unemployment duration lasted no longer then 160 days.[7].

It means that the state gives out expenditures on these programs, it benefits from them by cutting expenses on unemployment benefits or doles, as the participants join the labour market much quicker and get be aware of the job opportunities much better than those who don’t participate.

Conclusions. Summing up everything mentioned above, we can conclude that this kind of state support of unemployment by training engagement is highly beneficiary both for the state and for the people.

REFERENCES

  1.  Abbring, J. Corrigendum on the non parametric identification of treatment effects in duration models” / J. Abbring, G. Berg // Working paper, Free University Amsterdam, Amsterdam, 2006. – 32 p.
  2.  AMS “Labour market policy programmes”, Working paper, AMS, Solna, 2010. – 12 p.
  3.  Carling, K. The relative efficiency of labor market programs: Swedish experience from the 1990’s / K. Crling, J. Richardson // Labour Economics, 2004. Nr. 11, - P. 335–354.
  4.  Eriksson, M. Placement of unemployed into labour market programs: a quasiexperimental study / M. Richardson // Working paper, Ume˚a University, Ume˚a, 2009. - 122p.
  5.  Harkman, A. Training or subsidized jobs – what works?”A. Harkman, A. Johansson // Working paper, AMS, Solna, 199. – 145 p.
  6.  Larsson, L. Evaluation of Swedish youth labour market programmes / L. Larsson // Journal of Human Resources, 2006. – Nr. 38. - P. 891–927.
  7.  Richardson K. Swedish Labor Market Training and the Duration of Unemployment / K. Richardson, G. Berg // Institute for the Study of Labor, Uppsala 2010. – 47p.

 

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