Policy brief 1/2026: Employment should be promoted through targeted measures
Rapid re-employment of unemployed people is a key objective of labour market policies. Successful labour market policies require careful targeting of employment services and policy evaluation through randomized controlled trials. Problems related to the work ability of unemployed people must be identified at an early stage in order for targeting to be effective.
Our recommendations
- Challenges to work ability of unemployed people must be identified early
Promoting the health and work ability of unemployed people requires early identification of health and work ability problems. Services must be adequately resourced, timely and well targeted. Promotion of health and work ability of unemployed people should also be supported by clarifying benefit and service systems.
- In addition to carrots and sticks, employment services need precise targeting
Financial incentives and sanctions can increase participation in labour market programmes , but they do not automatically speed up re-employment. What is essential is to direct unemployed people to measures from which they actually benefit. Therefore, alongside incentives and sanctions, additional investments are needed to improve the quality of service targeting.
- Randomized controlled trials should be used in the evaluation of labour market policy
Evaluation of labour market policies should make use of randomized controlled trials designed jointly by researchers and policy makers. In such trials, participants are randomly assigned either to a treatment group or a control group. Although randomized trials are more costly than ex post analyses, they allow reliable evaluation of policy packages and the side effects of individual measures. Such trials have been used, for example, in other Nordic countries.