Giving people better opportunities to participate in the labour market is a key policy objective in all OECD and EU countries. More and better employment increases disposable income, strengthens economic growth and improves well-being. Well-tailored labour market and social protection policies are a key factor in promoting the creation of high quality jobs and increasing activity rates. Such policies need to address pressing structural challenges, such as rapid population ageing and evolving skill needs, driven by digitalisation and the green transition. They should also foster social inclusion and mobilise all of society.
The COVID‑19 pandemic has increased the need to promote more inclusive labour markets. Even before the crisis, employment rates differed markedly across population groups. Long-term unemployment, weak labour market attachment of some population groups and unstable or poor-quality employment reflect a range of barriers to working or moving up the jobs ladder. It will be a major challenge for policy makers in the coming years to lift these labour market obstacles, support labour mobility and make labour market participation accessible for all.
Another challenge that policy makers face is to make the most effective and efficient use of limited public funds. Knowing what policies work requires the collection of the necessary data, careful planning of impact evaluations and use of their results to guide policy making. Advances in data collection and storage and modern computer power means that countries now have a greater ability than ever before to conduct evaluations of their policies using high-quality administrative data and survey data. Expertise is needed to conduct robust and credible policy evaluation but also effective communication of their results to inform policy makers.
The OECD is carrying out a set of reviews of labour market and social protection policies to encourage greater labour market participation and promote better employment opportunities, with a special focus on the most disadvantaged who face the greatest barriers to finding quality jobs. This includes a series of country studies, Connecting People with Jobs, which provide an assessment of how well active labour market policies (ALMPs) help all groups to move into productive and rewarding jobs, and policy recommendations for improving their effectiveness.
This report is undertaken in the framework of a bigger project of the OECD with the European Commission which aims to raise the quality of the data collected and their use in the evaluation of the outcomes and effectiveness of labour market programmes, so that countries can better evaluate and design policies to benefit their citizens. In particular, this review uses rich administrative data from different registers in Lithuania to evaluate the impact of two types of labour market measures: employment subsidies and vocational training for unemployed people. The analysis looks at outcomes beyond the probability of employment and examines how the selected ALMPs affect different population groups. Finally, the report makes recommendations for improving the effectiveness of Lithuania’s ALMPs and strengthening the capacity of the Lithuanian authorities in conducting labour market programme impact evaluations.