Opportunities and limitations of successful labour market integration of the long-term unemployed

Long-term unemployment is a key issue and continues to pose a major challenge for active labor market policy in Austria. Despite a wide range of instruments and forms of support, there has been only limited success in permanently integrating the long-term unemployed into the labor market.

The aim of this study is to explore the possibilities and limitations of successfully integrating the long-term unemployed into the labor market. It is based on extensive structural and longitudinal data analyses as well as multivariate logit regression analyses of AMS-DWH and DV data for the group of long-term unemployed persons in 2022, supplemented by a representative online survey of over 2,200 long-term unemployed persons. Subsequently, a typecasting description of long-term unemployed persons was created. A company survey provides further insights into the possibilities and limitations of the (re)entry of long-term unemployed persons into working life from the perspective of companies.

The study identified four areas that have proven to be central to the labor market integration of the long-term unemployed: health situation, higher age and age discrimination, care responsibilities, and low educational attainment and lack of qualifications.

Of the range of AMS measures examined, integration assistance (German: Eingliederungsbeihilfe) proved to be particularly effective in (re)integrating the long-term unemployed into the labor market. However, course subsidies (German: Kurskostenförderungen), employment opportunities in the secondary labor market (German: Beschäftigungsangebote am zewiten ARbeitsmarkt, SÖB, GBP), and counseling and support services (German: Beratungs- und Betreuungsangebote) also had positive effects. However, the impact of these three measures is particularly high when they are taken up at an early stage—within the first 24 months of unemployment.

Six primary main types and three supplementary secondary types of long-term unemployed persons were identified through typecasting, covering a total of around two-thirds of the target group. The main types range from those with health or financial problems to people with work-life conflicts due to care responsibilities and people with a lack of qualifications or specialist knowledge, to older people that are disadvantaged in their search for work, and people with reduced regional mobility. The secondary types include people with insufficient German language skills or unrecognized foreign qualifications, people with low strain, and people who are difficult to place in employment. Employment opportunities vary significantly depending on the type, ranging from around 13% for those with health problems to 39% for those with low strain (compared to the average employment success rate of 22%).

Long-term unemployment must be seen as a complex problem with overlapping individual and structural influencing factors. A package of targeted measures tailored to the main problems and primary typologies, with a focus on health, work-life balance, qualifications, combating age discrimination, and appropriate counseling, will be necessary to achieve a sustainable reduction in the number of long-term unemployed persons. The key approaches here are prevention, early intervention, and individually differentiated support services.