How strong is the case for targeting active labour market policies?

Abstract The article assembles efficiency and equity arguments for and against targeting the long-term unemployed in active labour market policies (ALMP), and refers to evidence from applications to date. The theory and practices of ALMP differ somewhat between low and high unemployment countries. The approach taken in Sweden in the 1960s to 1980s is used to discuss low unemployment countries, and OECD analysis in the 1990s to represent theory for the high unemployment countries. Targeting the long-term unemployed is specifically a policy for high unemployment countries, and depends particularly on effects on wage pressure. The article concludes by urging that equity arguments be considered as well as efficiency and by drawing attention to the form which targeting takes. Comments are made about Britain's New Deal in relation to the form of targeting. [ABSTRACT FROM AUTHOR]