Labour market education: a pathway to work? More knowledge is needed

“A deeper, comparative discussion demands a major investigation. So we have decided to perform a follow-up study of the Nordic labour market educations,” Sweden’s Hillevi Engström told the Nordic Labour Journal, on her way back to Stockholm.

As President of the Nordic Council of Ministers for Labour during 2013, she had put the efficiency of labour market education on the agenda for the Nordic conversation. 

“Everyone shares the same goal: an efficient use of taxpayers’ money is what should get people into work. We share the same problems: young dropouts, people born abroad who don’t get access to the labour market. We think in slightly different ways and do slightly different things, but in this group we have a lot to learn from each other.”

A researcher’s eye

Ahead of the ministers’ meeting the Swedish presidency asked Professor Anders Forslund at the Swedish research institution IFAU, the Institute for Evaluation of Labour market and Education Policy, to provide a thought paper on ‘labour market education – a path to get into/to stay in the labour market’. 

Based on Swedish experiences he concluded that although the spread, content and effectivity of the measures has varied with the economic ups and downs over the past decades, new research indicates that Sweden’s labour market education is effective and more often leads to jobs than internship schemes do. But since labour market education is a far more expensive solution than internships, the return on the investment differs less.

Anders Forslund’s advice to Minister for Labour Hillevi Engström was that if the government wants to focus on labour market education, aiming for fewer clients per advisor could give better results. It will allow advisors to get to know the employers better and it will give them a better overview over which opportunities exist in the job market, while job seekers get better coaching into working life.

Denmark calls for better research

Denmark’s Peter Stensgaard Mørch, Head of Division at the Ministry of Employment, called for more detailed knowledge around what actually helps people find jobs:

“We spend billions of kroner on further education of the workforce. So it is important to get returns on our investments. The question is not whether we should invest, but how we invest to achieve the best results. The question is how we become more refined in the way we do this. The problem is that the studies I know of don’t have the necessary level of detail to probe into the individual target groups and the individual types of education. I would like to see a more nuanced picture.”

In Denmark’s case the studies show the average effect across all types of educations and target groups. This means little, argued Peter Stensgaard Mørch. The Ministry of Employment has therefore launched an investigation to gain more knowledge. The aim is to be able to differentiate between different types of education, who might benefit from the offer and whether skilled and unskilled people should receive the same offer. 

“We will use this to move on in the debate on whether it makes sense to put more money into this measure of our employment policy,” said Denmark’s Peter Stensgaard Mørch.

Education and education not the same thing

Norway has fewer unemployed people and fewer on labour market measures. Labour market training (AMO courses) represent only a small part of active measures, but education is still important in the labour market policy, said Rune Solberg, Director General at the Ministry of Labour. He wanted to define the term labour market education and to separate education from education. In his opinion, what Anders Forslund has been looking at is what each country’s employment agency has defined as labour market education.

“In Norway many unemployed people can get a formal education within the ordinary education system. The responsibility rests with the education authorities and not with the labour market authorities. To us this is an important division. Unemployed people with reduced work ability can for instance get support to help them take a three year university college education.”

According to Rune Solberg the effect of the employment agency’s labour market training in Norway is positive and in many ways similar to the Swedish one described by Anders Forslund. The measure’s reach has varied with economic cycles, but today labour market training is first and foremost a measure aimed at those with the weakest basic skills and the lowest language skills. 

Finland focuses on regular education

The regular education system is important in Finland’s labour market policies too. Unemployed Finns can choose for themselves what or where they want to study, be it vocational training or taking a degree at a university college or university. Unemployment benefits can be used to attend school or to study for two years, including for a master’s degree. The important thing is to have a plan which can be approved by the labour market authorities, explained head of development Heikki Ravantti. 

Employers want a greater say

“Studies have often focused on whether the education leads to jobs. But the aim of labour market education must also be to make it easier for employers to recruit labour. From an employer’s point of view the most important thing is that labour market education is tailored to demand,” said Karin Ekanger from the Confederation of Swedish Enterprise. She would also want to see employers involved in designing the education and preferably also be involved in recruiting the candidates. 

“If society invests so much in this kind of education, you do want it to succeed.

“What’s interesting is that even though there are common denominators, there are also major differences between the Nordic systems. But the goal remains the same: to get more people into work.”

She also felt it was important to promote and spread knowledge of how the different systems work.

“There are, of course, important lessons to be learnt from the different approaches. These are also measures that have been put into practice, which allows you to better understand what actually does work,” said labour market expert Karin Ekenger.

Expensive solutions – but worth it?

The General Secretary at the Council of Nordic Trade Unions, Christina Colclough, pointed out that costs should not get in the way of the goal of getting more people into jobs:

“We think it is important to ask yourselves what labour market education costs, but it is also important to ask what the cost would be if we abandoned the idea. We risk creating an even larger group of people who remain outside of the labour market. We need to make sure there is room for all in the labour market,” she said. 

Iceland relies on the social partners

“We see that internships represent the most efficient way of getting people into jobs. 60-70 percent of people who get a job offer don’t go back on unemployment benefits. The effect is not as pronounced when it comes to labour marked education,” said Gissur Pétursson, General Director of Iceland’s Directorate of Labour. 

They have given the main responsibility for labour market education to the social partners. The system is state funded, and managed by the partners.

“We have made a system in Iceland where the social partners cannot come to the state to complain the labour market education doesn’t satisfy the needs of the labour market, because they are managing the education themselves,” said Gissur Pétursson.

A project benefitting all?

“Can we generate deeper knowledge and can we share it?” summed up Dagfinn Høybråten, Secretary General of the Nordic Council of Ministers. 

His task, as he put it himself, was to distil something out of the debate between the countries and the social partners which could be of common benefit to the Nordic countries. The question is whether this debate can be turned into a project which can be taken further, as a contribution to the debate in the individual countries.

“Should we, and can we and do we need all the kinds of deeper knowledge which is more nuanced when it comes to target groups and measures, and thereby more suited to a larger degree of tailoring of the respective countries’ portfolios? It strikes me that if you see this as being of common interest it should be possible to go down this track. In that case you need to note what is already happening in Denmark, so that we avoid going down the same path but rather complement what Denmark is doing.” 

Follow-up study

Iceland’s 2014 Presidency of the Nordic Council of Ministers wants to follow up this particular debate, and wants to organise a major conference on the cooperation between education and the needs of businesses. 

As Sweden’s Minister for Employment told the Nordic Labour Journal:

“A deeper comparative debate demands a bigger investigation. So we have decided to perform a follow-up study of Nordic labour market educations.”