The Suitability of AMS Profiling as an Instrument for a More Effective Use of Labour Market Policy Measures

AMS Austria plans to introduce data-based segmentation of customers registered as unemployed into three segments on the basis of predicted labour market opportunities ("statistical profiling") across the country. This is intended to serve as a decision-making basis for counselling and the allocation of jobseekers to labour market policy measures, i.e., as a targeting instrument, and as such to support a change in strategy in active labor market policy. In particular, it is intended to focus more cost-intensive qualification and employment promotion measures on unemployed persons with average labour market prospects in the future. The AMS hopes that this will lead to a more effective and cost-efficient use of active labour market policies. However, the results of the available causal impact analyses suggest that this reallocation would probably not bring about the desired increases in effectiveness and efficiency. Company integration subsidies and employment projects in the second labour market clearly have an even stronger impact in the low segment than in the medium segment. The picture is less clear in the case of training and continuing education provided by external training providers and course cost subsidies, but even in this case there is no evidence of generally lower effectiveness in the low segment.