The Continuum Approach to Unemployment Policy: An Overview

Abstract

This chapter is concerned with a broad class of policies designed to tackle the problem of long-term unemployment, namely, policies aimed at reducing the employers’ cost of taking on people who have been long-term unemployed. Regardless of whether these policies come as employment vouchers, tax breaks, or in other forms, they are essentially analogous in the sense that they can all be represented as a government subsidy for recruiting people who have been unemployed for more than a specified period of time. They all share the objective of inducing firms to do more hiring from the pool of the long-term unemployed and thereby give workers more equal chances of competing for jobs. Thus, in what follows, we shall simply refer to these policies as ‘employment vouchers for the long-term unemployed’, it being understood that they may take on many other institutional guises. Although these policies are certainly not the only ones at the disposal of governments,¹ they have received a growing share of attention in recent years.