Richard Layard on what to do for the long term unemployed

You know, all these wonderful people beginning their screams about what Duncan Smith is going to force the long term unemployed to do?

I wonder what the Labour Peer and one of the country\’s pre-eminent labour economists might say about this?

Ah, here he is from 2001:

These ideas make one focus on the intense need which many unemployed people have for
active help to overcome the barriers to employment. The main kinds of “active labour market
policies” that can be used are these:
• Job-search assistance, advice and matching to the available vacancies. Good
controlled experiments in Sweden show how unemployment has been reduced in
areas where the job centres have more staff.
• Training. This has a mixed record but the right education and training can clearly
set a person on a new path in life.
• Employment subsidies. These can induce employers to give a chance to hard-toplace
workers and thus expand the size of the effective workforce. A good
example is the Jobstart programme in Australia.
• Work experience. Where no job can be found with a regular employer, work on
publicly-useful projects can help improve people’s work habits and give them
work records which help in finding regular jobs.
These programmes can help and have been around for a long time, though usually on
a small scale. But unless they are universal, they tend to be used by people who already had
the best chance of finding work.
Thus the big new idea in Labour’s New Deal is this. We ought to offer everybody
on the threshold of long-term unemployment a choice of activity for at least a period.
And when that happens we should remove the option of life on benefit.

Hmm, looks like he doesn\’t just approve of it, he urges that we should do this.

5 thoughts on “Richard Layard on what to do for the long term unemployed”

  1. You seem to be arguing that something’s a good idea because someone in the Labour Party advocates it.

    An unusual form of argument from you. Do I need to tell you why this is a logical fallacy?

    Tim adds: I approve of it because ity’s a good policy. Layard (and others) who have studied long term unemployment (including Layard’s colleague, this years Nobelist, Pissarides) all agree. Long term unemployment is more of a structural problem than it is a cyclical one (as with short term unemployment) and thus needs to be tackled in structural ways.

    The glee with which I leap upon Layard’s name is that he is a Labour peer and we are going to have shouts and cries that this is all bastard Tory policy. No, it isn’t, it’s standard mainstream economics, so much so that it is exactly what the Labour peer who spent decades looking at the problem recommends.

    Shit, even Denmark time limits benefits to two years unless you take a make work job or training course.

  2. Work contains a disincentive – you can’t do what you want with all your time any more. However there is an incentive, you have more money to do more things in the time you do have left free (whether at the weekend or when you retire)

    For the poor (i.e. The unskilled) the incentive does not exist. Benefit withdrawal rates are too high, leaving very little earned money in the pocket for the hours taken to obtain it. Add in the cost of changing circumstances which must be informed to the labour dept commissar, working costs money.

    No amount of job searching schemes fix this.

    If you don’t fix the benefit trap the rest is fiddling round the edges.

    The system is broken, changing a few values here and there, layeringing in more govt intervention, is creating more complexity, more mess, more cost, more harm.

    Smash the system, let people keep their benefits when they get a job, eliminate minimum wage.

  3. This is good thinking in that it gives the state a role in what you might call the social infrastructure without a role in employment itself , which can only be harmful.
    I have wondered if re-location grants might be a good idea or relocation assistance .
    I hate to soud all get on your bike but the manwill have to go to the work if the job is to be areal one and the barriers to that , other than work staleness must be confronted .

    I do wonder if the prevailing culture on these loafers punishments will not be reinforcing though. many people serving community pay back orders ebnjoy the chance to meet others like them.

  4. Layard is talking abou an actual policy that was implemented, do you realise?

    This is all devil-in-the-detail (or in the ‘broad idea’). If IDS really wants to sticl the long-tem unemployed into litter picking etc it’s going to be a disaster and Richard Layard would be horrified. If he plans a broad suite of options including training/education, then he seems to be re-implementing the new deal.

  5. I was amused by: “• Job-search assistance, advice and matching to the available vacancies. Good controlled experiments in Sweden show how unemployment has been reduced in
    areas where the job centres have more staff.”

    I know it’s facetious, but I do wonder if the reduction in unemployment was equal to the number of extra staff employed…

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