[2] Many of these programmes grew out of earlier public works projects, in the United States particularly those implemented under the New Deal, designed to combat widespread unemployment in the developed world during the interwar period.
[3][4] ALMPs have traditionally been considered “supply-side measures” because they consisted of different employment programs and job placement policies and were designed to assist the most marginalised groups in the labour market.
Initially, during the 1950s and 1960s, active policies were developed by countries facing labour shortages to ensure a workforce with the necessary skills for expanding industrial economies.
The second period followed the oil crisis of 1973 to 1974 when ALMPs faced a much more challenging environment, marked by persistently high unemployment rates.
To bridge the gap between skill demand and supply, the country introduced an apprenticeship law in 1955, which offered on-the-job training and lower waged for trainees.
However, this proposal faced strong opposition from trade unions who feared increased state intervention in the management of unemployment insurance (UNEDIC).
[6] Active labour market policies are based on the concept of social investment, which rests on the idea of basing decision-making on the welfare of society in quantifiable terms, by increasing the employability, incomes and productivity of economic agents, so this approach interprets state expenditure not as consumption but as an investment that will produce returns on the welfare of individuals.
The adoption of this concept has thus added to the traditional task of social policy to maintain income levels that of promoting labour market integration by removing barriers to entry through state intervention.
[6] In the United States and Great Britain, fragmented and under-resourced ALMPs have been attributed as a factor in the rise of populist backlash politics in the Rust Belt and post-industrial northern England during the mid-2010s.
The main categories of ALMPs in European countries are training programs, private sector incentive schemes, direct employment programs, and Services and Sanctions (a category that includes all measured focuses on enhancing job search effectiveness, such as counselling, monitoring or job search aid).
Numerous active labour market programs in European countries are tailored to address the needs of young job seekers (aged 25 and below) who are unemployed.
While these policies focus on helping job-seekers find employment on their own, they also provide the necessary support and incentives to facilitate their reintegration into the labor market.
This has led to a focus on market-based solutions to labor market problems, including the use of ALMPs to create employment opportunities.