Deregulation of Placement Services. The Case of Austria

Labour market mechanisms are being transformed, as the composition of labour supply and demand are changing in the wake of demographic changes and industrial reform and restructuring. In the course of the implementation of new organisations of work, labour turnover increased significantly since the mid 1980s. As a result, the Labour Market Service was faced with an increasing mismatch between jobs advertised and unemployed registered with them. The skill and occupational composition of the unemployed becomes more heterogeneous, while the job vacancies registered with the LMS remain traditional. This is a major challenge for job matching, the core business of the LMS. The Public Employment Services (the Austrian Labour Market Service) responded to the problem with deregulation and privatisation in the late 1980s and the 1990s. However, the reforms were half-hearted and did not embrace the potential for public-private partnerships in job matching. Thus, the problem of an increasing mismatch between labour supply and demand remains an open issue.