Activation in Ireland: An Evaluation of the National Employment Action Plan

Abstract

Since early 2008 there has been a severe deterioration in the Irish economy, which has had major knock-on implications for the labour market. Unemployment increased from around 4.5 per cent at the end of 2007 to over 13 per cent in 2010. Given the scale of the problems currently facing the Irish economy, the level of unemployment is likely to remain high over the medium term. In this context it is particularly important to implement effective activation measures to assist and encourage jobseekers to remain active in the labour market and/or to increase their employability in order to avoid long-term unemployment. Prevention of long-term unemployment is important from both economic and social perspectives. The long-term unemployed find it particularly difficult to find work, even when demand for labour increases. This disparity arises partly because they tend to have lower levels of education and poorer labour market experience, and partly because their skills deteriorate and those with shorter spells of unemployment are better able to compete for jobs. In addition, long-term unemployed individuals are more likely to suffer from social exclusion and poor health. From the perspective of the wider economy, longterm unemployment entails substantial financial costs in both welfare payments and lost revenue as well as in lost production.