Curbing the Labour Market Divide by Fostering Inclusive Labour Markets Through a Job Guarantee Scheme

Globalization, demographic trends and technological developments pose important challenges to European labor markets: job quality has deteriorated and precariousness has increased.Austerity measures enforced after the financial crisis have aggravated this trend.We argue that there is a case for appropriate active inclusion policies, complemented by stimulating macroeconomic policies.Using descriptive statistics and a systematic review of the literature, we propose to experiment with Job Guarantee (JG) projects.These projects could provide a macroeconomic stimulus to the economy by enabling everybody who is willing to work to take up a JG job at the minimum wage.Job guarantee projects are not a panacea to all evils.But experience shows that they could help to stop the casualization of the labor market by providing quality jobs and sustainable employment opportunities.As such, JG projects could foster inclusive labor markets.The projects should be financed by redirecting social security (administration) funds, by including JG elements in the European Investment Plan and by using part of the €80 billion which the European Central Bank (ECB) is injecting each month in the euro area.Our proposal aims to curb the labor market divide by making labor markets more "inclusive" through a solid Job Guarantee scheme.