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"Social labour market": a useful approach for a narrowly defined target group

Georg Cremer
ifo Institut für Wirtschaftsforschung, München, 2007

ifo Schnelldienst, 2007, 60, Nr. 10, 27-32

Does it make sense for the government to provide jobs on a long-term basis for those unlikely to find employment? Georg Cremer, Caritas Germany, argues that a social labour market makes sense in terms of social policy but is not a labour-market policy instrument. It could reach people who have no realistic chance of finding a normal job if the structural conditions for the employment of low-skilled people were far better. Only in longer-term, publicly supported jobs can these people find hope for employment. The instrument should be designed in such a way that this social function can actually be fulfilled. This suggests a narrowly defined target group and appropriate jobs and support conditions, with an adequate wage gap to normal unskilled jobs.

JEL Classification: J210

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ifo Institut für Wirtschaftsforschung, München, 2007