Individual Placement and Support (IPS)
ARapid job placement in competitive employment with integrated clinical and vocational support. The evidence-based standard for people with mental health conditions and disabilities. Based on eight fidelity principles including zero exclusion, benefits counselling, and ongoing employer support.
Effect Size
48–60% of IPS participants achieve competitive employment vs. 20–28% in traditional vocational rehabilitation. Relative risk 2.40 (95% CI 1.99–2.90).
Kinoshita et al. (2013)
Supported employment for adults with severe mental illness (Cochrane Review)
View source →European evidence from EQOLISE trial: 55% (IPS) vs. 28% (control) at 18 months across six countries. Norwegian RCT (PMC4611964) confirms effectiveness within high-benefit welfare context.
Job Search Assistance & Activation
AStructured job search support, CV coaching, interview preparation, and benefit conditionality (sanctions for non-compliance). Most effective for those closest to the labour market. Produces positive short-term effects at low cost per participant.
Effect Size
Consistently positive short-term effects on employment entry. Effect concentrated in first 6–12 months. Smaller for long-term unemployed than short-term.
Card, Kluve & Weber (2018)
What Works? A Meta-Analysis of Recent Active Labor Market Policy Evaluations
View source →Most cost-effective ALMP category. Effect size declines with distance from labour market.
Wage Subsidies (Private Sector)
AGovernment payments to private employers to offset the cost of hiring targeted groups (long-term unemployed, disabled workers, young people). More effective than public employment schemes but deadweight loss and substitution effects reduce aggregate impact.
Effect Size
Moderately positive for individual participants. Aggregate employment effect smaller due to deadweight (employers would have hired anyway) and substitution (subsidised hire displaces unsubsidised worker).
Vooren et al. (2019)
The Effectiveness of Active Labor Market Policies: A Meta-Analysis
View source →Key finding from Damen et al. (IZA DP 8318): disclosure of disability wage subsidy entitlement did NOT increase callback rates in Belgian correspondence study — stigma signal outweighs financial incentive. Subsidy design matters.
Vocational Training
AClassroom or on-the-job skills training programmes for unemployed or inactive persons. Produces a short-term lock-in effect (participants in training, not working) but positive medium-term employment effects at 2+ years. Most effective for those furthest from the labour market.
Effect Size
Negative short-term (lock-in). Positive at 2 years: OR approximately 1.1–1.3 for employment in best-quality studies. Effect concentrated among those furthest from labour market.
Card, Kluve & Weber (2010)
Active Labor Market Policy Evaluations: A Meta-Analysis
View source →Do not evaluate training programmes at 6 months — lock-in effect produces artificially negative results. 24-month follow-up is the minimum for fair assessment.
Public Employment / Direct Job Creation
BGovernment-created jobs or make-work schemes for the unemployed. The most politically popular ALMP category during downturns. Also consistently the least effective. Participants rarely transition to unsubsidised employment; the schemes mask unemployment without resolving it.
Effect Size
Zero or negative aggregate effect on employment. Participants classified as employed during programme; transition to unsubsidised work is low. No evidence of sustained labour market attachment.
Card, Kluve & Weber (2018)
What Works? A Meta-Analysis of Recent Active Labor Market Policy Evaluations
View source →Ranked D (worst) in the Card/Kluve evidence hierarchy despite being the largest category of ALMP spending in many European countries. Masks unemployment in headline statistics without producing lasting employment outcomes.
Employer Disability Incentive Programmes
CFinancial incentives, tax relief, or adjustment grants to employers who hire or retain disabled workers. Evidence on population-level effectiveness is weak. Danish flexjob programme showed no significant improvement in employment for the target group. Workplace adjustments combined with financial incentives show better results than financial incentives alone.
Effect Size
Positive effect of workplace adjustments + financial incentives combined. Financial incentives alone: limited evidence of population-level impact. Danish flexjob: no significant improvement vs. control after introduction.
Nevala et al. (2015)
Workplace Accommodation Among Persons with Disabilities: A Systematic Review
View source →Implementation matters as much as design. Employer involvement in return-to-work planning consistently outperforms financial-incentive-only approaches.