2006–2010

Decentralisation of Active Labour Market Policy: The Case of Swedish Local Employment Service Committees

Reprint No. 2006:27

Author(s): Martin Lundin and Per SkedingerYear: 2006 Title: Journal of Public Economics Volume (No.): 90 (4-5) Pages: 775–798


Decentralisation of decision-making in labour market policy may increase efficiency, since local authorities have first-hand knowledge about local labour market problems. However, decentralisation may also be associated with fiscal externalities generating misallocation. The purpose of this study is to examine the effects of a Swedish pilot programme in 1996, which strengthened the role of the local authorities in labour market policy in certain regions. Our econometric findings do not indicate any increase in geographical lock-in of the unemployed, but decentralisation seems to spur local initiatives in the form of projects organised by the municipalities and increase targeting on outsiders in the labour market. The latter result is consistent with the hypothesis that municipalities used their increasing influence in order to improve municipal budgets at the expense of the central government.


Reference:
Lundin, Martin and Per Skedinger (2006), "Decentralisation of Active Labour Market Policy: The Case of Swedish Local Employment Service Committees". Journal of Public Economics 90(4-5), 775–798.

Per Skedinger

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Mob: +46 70 486 03 89
per.skedinger@ifn.se

Interdisciplinary European Studies

The European Union and the Return of the Nation State

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This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

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