A problem with traditional Job Guarantee.

It’s nice to see a new study from IZA, the German institute for the study of labour, confirm what I said a few years ago, namely that what might be called “traditional Job Guarantee”, i.e. subsidised short term jobs in the public sector, aren’t as good as the equivalent PRIVATE sector jobs.

See for example the para starting “Second, the time profile...” in the IZA study.

The problem with “traditional Job Guarantee”, is that that form of employment does not seem to improve the employability of those involved. In contrast, the private sector equivalent DOES IMPROVE employability.

Unfortunately, many of the advocates of traditional JG have for years simply ignored this empirical evidence. That is, they constantly go on about the skill enhancing characteristics of public sector JG. Plus they keep going on about how such employment allegedly maintains work habits for those involved. Well the empirical evidence just doesn’t support that.

That’s not to say, of course, that everything is perfect with the UK’s private sector subsidised employment system, i.e. the Work Programme. But at least one of the basic elements of the Work Programme, namely private sector subsidised employment seems to be right.

Nor am I suggesting A BAN on public sector subsidised employment. I can’t see much harm in those with a preference for public sector work as opposed to private sector work having the option of at least AIMING FOR temporary subsidised public sector work, in as far as they have a choice.


Training.

In contrast to the IZA study’s support for private sector JG, the study did NOT CONFIRM one claim I made a few years ago. That was that private sector subsidised employment produces better results than training. I.e. the IZA study seems to have found that training does produce beneficial results.

However, we need to be careful about what is meant by “training”. Some types of training, e.g. university courses leading to vocational or science degrees certainly pay for themselves. In contrast, some of the training offered as an alternative to JG can be low quality, and not worthwhile.