What question did this study set out to answer?

This research aims to understand how funding instability in Active Labor Market Policies affects unemployment outcomes.

March 17, 2026Global economy journal0 citations

Active Labor Market Policies, Funding Instability, and Labor Market Outcomes

Key Points

This research aims to understand how funding instability in Active Labor Market Policies affects unemployment outcomes.
Applied dynamic panel regression models
Analyzed data from 24 Tunisian regions
Focused on the period from 2005 to 2015
ALMPs significantly reduce unemployment
Policy instability weakens the positive impact of ALMPs
Consistent funding is crucial for effective labor market interventions

Abstract

This study investigates how instability in Active Labor Market Policies (ALMPs) and fluctuations in the corresponding budget allocations affect their overall effectiveness. Using dynamic panel regression models applied to 24 Tunisian regions over the period 2005–2015, the findings show that ALMPs contribute significantly to reducing unemployment. However, when the volatility of ALMP implementation and funding is taken into account, a clear moderating effect emerges: policy instability weakens the beneficial impact of ALMPs on unemployment. These results highlight the importance of consistent and predictable labor market interventions to ensure sustained improvements in employment outcomes.

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