1. Greek labour market policy and evaluation

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1 How to govern and evaluate labour market policies Statements and Comments Dimitris Karantinos National Centre for Social Research (EKKE) This paper is structured in three sections. The first section describes a few key characteristics of Greek labour market policy and assesses the use of evaluation in the Greek context. In the second section, a list of priorities for future evaluations is being drawn, based on the Swedish experience on the issue. The report concludes with a number of recommendations. 1. Greek labour market policy and evaluation 1.1 The Greek labour market and the role of labour market actors Most of the labour market measures implemented in Greece are supervised by the Ministry of Employment and Social Protection and by the main employment agency, the Manpower Employment Organization (OAED). Other governmental departments with a bearing on the issue are the Ministry of Education (initial vocational training and further adult education) and the Ministry of Development (entrepreneurship). Up until the 1990s, both the design and the implementation of active labour market policies, including job search assistance, were largely done by one government organization, the Manpower Employment Organization (OAED). The latter had a highly centralized structure, while, with a few exceptions, held a monopoly on job brokerage. During the 1990s this situation changed considerably. Today, OAED continues to be the main agency responsible for the integration of the unemployed, but there is much more variety as regards active policies. Largely thanks to EU resources, a number of governmental departments and agencies have increasingly become engaged in designing and delivering pro-active policies, mainly in the field of training, but also in the fields of counselling and advice, work experience, recruitment incentives, business start ups, etc. In 1998, the state partly abolished its monopoly on the provision of employment services and as a result, private employment offices are now allowed to operate for specific categories of workers. Since at least 1996, OAED has been engaged in a major re-organizational effort, in an attempt to introduce and implement a policy emphasizing prevention and early interventions. This policy has been connected with the modernization of the Public Employment Services (PES), or Centres for the Promotion of Employment (KPA), as they are termed in Greece. Today an adequate KPA network is in place and personalized employment assistance, involving individual action plans, has already covered a respectable segment of the registered unemployed. Yet in trying to establish modern employment services, OAED is thought to have lost its share of vacancies in the open market. As a result, the overwhelming majority of placements made by OAED are connected in some way with ALMPs and subsidies. Raising the quantity of vacancies notified to KPA and improving the vacancy-filling performance is among OAEDs future objectives. 59

2 Vocational training is organized along two distinct pathways in Greece: Initial vocational training (IVT, for short) and continuing vocational training (CVT). Initial vocational training at the post-secondary level is supervised by the Ministry of National Education and Religious Affairs. Training is provided by the Organization for Vocational Education and Training (OEEK), a legal entity under public law. OEEK holds the responsibility for the operation of public Vocational Training Institutes (IEKs) as well as for the monitoring and supervision of private IEKs. Continuing Vocational Training is organized by the Ministry of Labour and provided by Vocational Training Centres (KEKs), which are public and private training organizations having received official accreditation by the National Accreditation Centre of Vocational Training Structures and Accompanying Support Services (EKEPIS). KEKs target the unemployed as well as the employed workers of all educational backgrounds and offer short duration, usually job specific training in a great number of different subjects. The quality and impact of delivered training varies wildly in Greece. Quality of training is thought to be higher than average in certain public administration departments, in a number of public utility corporations and in a limited number of large firms of the private sector. At the other end of the scale, continuing vocational training is driven by supply factors (availability of EU and national resources) rather than by the needs of the labour market and enjoys a low status. Participation in CVT courses is often perceived as a substitute for unemployment benefits. The latter are thought to be ungenerous in Greece compared to the European standard. Admittedly, labour market authorities and OAED in particular, operate under a difficult environment. A large segment of the labour force is still employed in agriculture, organized in small family holdings with self-employment being the dominant form of employment. Selfemployment is also very pronounced in urban areas. Of those in salaried employment, a large part work in the public sector, protected from the realities of the labour market with the remaining working in private firms, the vast majority of which are very small, family-owned businesses. Set against this background, employment growth in the 90s and the early years of the current decade has been modest, in spite of real advances in GDP growth. Under the pressure of rising female participation rates and a growing labour force, unemployment escalated to record levels, exceeding the EU average for the first time in 1998 and persisting at high levels since then. Currently the authorities are taking steps to modernize policies and measures in the areas of vocational training and job search assistance. In developing and executing ALMPs, past and present governments rely to a large extend upon EU resources. 1.2 Evaluation in the context of the Greek labour market policies The most common type of evaluation studies that can be found in Greece relate to the evaluation of the Operational Programmes comprising the Community Support Framework. This is understandable, given that the great bulk of labour market interventions are supported by the European Social Fund and that evaluation studies are requested by the Commission Services. Evaluation in the frame of Structural Funds interventions follows closely EU guidelines on the issue, with the emphasis generally placed upon performance. 60

3 Evaluation studies of labour market interventions are regularly commissioned by the relevant ministries and notably the Ministry of Employment and Social Protection. As a rule, these are conducted by private consulting firms and the results are used to shape up new policies and measures. Although officially termed as evaluations, in practise these studies constitute implementation reports, relying largely on formal criteria and designed so as to identify obstacles and suggest ways to overcome obstacles. Rarely, if ever, they have targeted the core question of evaluation, i.e., what works and why, concentrating instead on measuring the success (or failure) of adopted policies and measures. As an exemption to this rule, the evaluators responsible for the mid-term evaluation of the current operational programmes (CSF ) were asked to evaluate a limited number of interventions, with the help of traditional evaluation tools such as interviews and questionnaires. The measures chosen for evaluation were the continuing training courses for the unemployed and the supportive structures for women (care centres for children and the elderly). The results of the exercise were modestly encouraging. Both evaluations have shown net gains, although the question of cost-efficiency of measures was not raised. Other than the evaluations conducted in the frame of Structural Funds interventions, conventional (impact) evaluations have been conducted, occasionally, by researchers in Greece s academic institutions as well as in other public and quasi-public organisations. To name just a few, mention should be made of the evaluation on the impact of training, conducted by the Centre of Planning and Economic Research (KEPE), the ex-post ESF evaluation and the evaluation of the employment subsidy programme (New Posts Programme) conducted by the National Centre for Social Research (EKKE) and the evaluation of all-day school conducted by the Institute of Labour (INE-GSEE). A full-scale evaluation study on the impact of ALMPs conducted by PAEP (OAED s own affiliated research institute), has been completed recently. The main findings of the study on the impact of the three main ALMPs implemented in Greece (the New Posts programme, the Subsidies for selfemployment programme and the STAGE programme), are summarized in the following paragraph. As regards the effectiveness of the New Posts programme (the largest and longer-running of the three ALMPs), results are largely negative. According to the authors, the scheme has not contributed to the creation of new jobs and it is recommended to earmark the employment subsidies for the unemployed persons from the vulnerable categories of the labour force. In contrast, the subsidies given for self-employment appear to achieve better and more time enduring results. Effectiveness could be enhanced through information campaigns, more generous subsidies and by the provision of counselling services. Finally, a reshaping is recommended for the STAGE programme (acquisition of professional experience) towards private sector companies and involving greater control by OAED. The study concludes that existing rules in all three programmes favour the young, the skilled and the short-term unemployed and recommend stricter selection controls. The employment subsidy programme (New Posts Programme) has been the subject of another evaluation study carried out by the National Centre for Social Research (EKKE) and the consultancy firm EEO Group. The study has explored the planning procedures, the implementation and the results of this programme for the period In order to arrive at 61

4 safe conclusions, evaluators conducted surveys, involving 5000 companies, 6000 participants and 117 PES officials, and developed an econometric model to test for impact. The conclusions of the evaluation are mixed. Overall, the employment subsidy programme is said to be effective in restricting unemployment and generating gains, most of them in the form of income support for participating previously unemployed workers. A respectable portion of the latter continues to work today with the same employer (46 per cent of the total). At the same time, the evaluation study revealed a serious problem in the form of deadweight. It is estimated that approximately one out of two of the participating firms would have recruited the same number of employees even without the subsidy. The study concludes with a number of recommendations. The most important of these relate to the scale of the programme (it is recommended that the programme should be severely curtailed) and to the selection of participants (it is proposed that the programme should focus on the long term registered unemployed workers). Training delivered to the unemployed has been the subject of a number of evaluation studies during the last few years. In one of these studies, assessing the impact of the European Employment Strategy (EES), the effects of training were determined on a basis of a sample survey. The survey has been conducted on a sample of 800 unemployed persons, half of which had attended training courses in the recent past and half serving as a control-group (nonexperimental analysis). In designing the control group every effort was taken to select individuals whose characteristics were similar to those of the programme participants, so as to minimize errors from selection biases. According to the findings of the survey, 32,5% of the ex-trainees were found in employment 10 months after the completion of the training programme, as compared to only 17,3% of non participants. This finding gives some support to the conclusion that training can affect employment outcomes. According to another finding however, only 10% of the ex-trainees currently in employment believe that the training they received is relevant with their current job. Based on the findings of the sample survey, the authors conclude that training delivered to the unemployed has positively affected employment levels and has helped to restrain unemployment at lower levels, but that there is also ample room for increasing effectiveness. According to the findings of another study, conducted within the frame of the mid-term evaluation of the Regional Operational Programmes (ROPs) of the current CSF ( ), six months following training only 17 per cent of the participants managed to secure employment. Finally, an evaluation study conducted by the Accreditation Centre (EKEPIS), concluded that out of a total of 17,158 training participants, 2,211 (12.9% of the total) managed to find employment. These results are cited here in order to emphasize that the use of different methodologies is bound to lead to contrasting (and sometimes contradictory) results. 2. Priorities for future evaluations In comparing the evaluative effort in Greece and in Sweden, some important contrasts can be easily noticeable. With respect to the volume of evaluative work, Greece certainly lags behind. The relative scarcity of evaluation studies in Greece can be attributed to a number of factors, including the following: 62

5 First, active labour market measures are relative new in Greece, having developed largely as a result of EU resources. In contrast, Sweden has a long tradition in social policy and in delivering active labour market measures. Second, the structure of the Greek labour market hardy aids the delivery and hence the assessment of the impact of active measures. As noted earlier, large numbers are employed as self-employed in agriculture and in the service sector, while most of the private sector employees, work in numerous very small enterprises, often run by members of the same family. Undeclared employment is also thought to constitute a serious problem. In contrast, a strong industrial base comprising of large enterprises has never developed in Greece. Third, expertise in evaluation is still limited in Greece, especially at the regional level. This situation is of course gradually improving, thanks to EU guidelines on evaluation and current demands for management trough objectives and results and for greater accountability. In spite of the progress achieved however, an evaluation society is yet to be established in Greece. In relation to the type of evaluations being conducted in the two countries, a certain plurality of the work in Sweden is easily noticeable. In this respect, the following evaluations merit high priority in the Greek context: Policy reviews and following up of the EU Recommendations. For a number of years, Greece has received the same recommendations and no serious action was taken to respond to these recommendations. Policy planners need to know more on the policy areas involved in the recommendations and be informed about possible future policy options. Evaluation of the unemployment insurance system. With the emphasis placed heavily on active measures during past years, unemployment benefits have become a muchneglected issue. A policy review is urgently needed with the view to improve adequacy of benefits and restore possible inequalities. Evaluation of the individualised assistance programme (preventative services) delivered by the Centres for Employment Promotion (KPAs). Although personal action plans have already been drafted for the majority of the registered unemployed, very little is known on the impact of the new arrangements. Evaluation of the training for the employed. Most of the studies conducted so far in the field of training involved training for the unemployed. As a result we know very little on the effects of training on productivity, earnings and mobility of workers. But first and foremost, what is needed is a study comparing and ranking the gains (and losses in the form of unintended results, or side effects) of the various measures. Knowledge on the individual measures has increased considerably during recent years. What is still lacking is a common yardstick to judge the effects of the various interventions. Lastly, utilization of evaluation results should become more widespread while new policy measures should be tested prior to implementation and evaluated on an ex-ante basis. 63

6 3. Concluding remarks Evaluation methods and practises differ among evaluators of different national origin and scientific background. This is natural as evaluation methods and practises have been shaped through the years under different institutional, societal and academic settings. Given however the need for comparable results as accurate as possible, the issue of establishing and applying common principles, standards and evaluation criteria is of obvious importance. Existing studies reveal that there is also a need for striking a better balance between accountability for policy making and knowledge production as well as between quantitative and qualitative methods of social research. Although it is unlikely that there will be an agreement on the definitional and methodological issues of evaluation in the near future, there is ample room for establishing a common evaluation practise. References EKKE, 2003, The ex-post evaluation of the ESF operations under objectives 1,3,4 and under the Community Initiatives Employment and Adapt, Athens. EKKE-EEO, 2004, Evaluation of the Employment Subsidy Programme for the years 1998, 1999 and 2000, Athens. INE GSEE/ADEDY, 2003, The all day school: social impact and prospects, Enimerosi, Vol. 95. Kanellopoulos K., 2005, Economic dimensions of adult training, Athens, KEPE. Ministry of Labour and Social Insurance, 2002, Evaluation of the labour market policy and assessment of the EES contribution , Athens. PAEP-University of Piraeus-Catholic University of Luvain, 2005, Development of a pilot evaluation system of employment policy measures at a local level, Athens. 64