Decentralisation of active labour market policy

AuthorDirectorate-General for Employment, Social Affairs and Inclusion (European Commission)
© European Union, 2015
Teacher giving training course to jobseekers (computer-aided design)
Problem addressed
During the 1990s, Denmark experienced higher levels of
unemployment, reaching a peak of 11% in 1993. This
prompted criticism of the existing government interventions
in the labour market to promote employment, which were
characterised by generous and long-duration unemployment
benef‌its and expensive labour activation policies. In 2002, the
Danish Government began to radically reform the delivery of
public employment services (PES) in the country.
Innovative solution
The Danish Government set in a motion a radical reform of
PES in the country to decentralise responsibility for them at
municipal level. This marked a shi from the former division
of responsibility between the state and municipalities. It
particularly aimed to enable better tailoring of employment
support services to local needs. By placing services at the
municipal level, jobseekers could use one, more easily
accessible, ‘entry point’.
Since the introduction of the reforms, PES centres
have the freedom to cooperate with local partners
and other municipalities in implementing their locally
developed employment strategies. The Danish Agency of
Labour Market and Recruitment (STAR) undertakes the
implementation and evaluation of national employment
policies in Denmark. The STAR supports municipalities to
set ambitious goals and ensures that best practices are
disseminated across the country. The STAR also ensures
public accountability of PES centres.
Key results and benef‌its
Bringing decision-making closer to where problems and
individuals are has had a positive impact on the ef‌fectiveness
of active labour marker policies (ALMPs). Denmark is a
frontrunner in developing ALMPs. Municipalities deliver a vast
range of ALMPs targeted at the local situation.
An example of the impact of decentralisation is the
municipality of Hjørring. Here, the authority’s long-term goal
was to reduce the average amount of time that individuals
spend on public benef‌its in one year. Known as the ‘Hjørring
Method’, a panel of multidisciplinary PES employees identify
Decentralisation of active labour
market policy
Reform of Public Employment Services

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