Activation Policies for the Poor in OIC Member States
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3 Prevention of benefit exhaustion as measured by the share of unemployed no longer entitled to
unemployment benefits in the total number of unemployed
4 Prevention of repeated registration for benefit as measured by the share of previous
unemployed who have de-registered but re-apply for unemployment benefits within four
months
Another way of improving PES performance concerns how the government works with external
providers from whom they may already, or could, purchase services. There are a number of reasons
why ministries, the PES or other public agencies contract out employment services to external
providers:
 To complement the PES and utilise specialist skills and/or additional capacity by expanding the
pool of potential providers
 To enable public authorities to expand or reduce service delivery capacity without assuming the
long term commitments involved in public sector employment
 To reduce delivery costs, stimulate innovation in service delivery and give access to skilled staff
and services unavailable in the public sector, through the introduction of competition for
contracts
 To spur improved performance in the PES, both through competitive pressure and ‘best practice’
transfer
1.5 General conclusions on implementing activation strategies
Whilst the net impacts specifically attributed to changes in service delivery or employment
programmes may appear small, they are likely to have significant aggregate and cumulative
employment and budgetary effects. Well designed and well communicated activation strategies may
induce large effects. Most positively, decreases in long term unemployment and dependency in
countries that introduced and sustained coherent and stricter activation policies confirm that many
of those targeted can get into work with the right support and labour market conditions.
Some lessons relate to avoiding mistakes, for example, in allowing cash transfer systems to become
passive. Often, the unintended impact of such policy errors can become entrenched and it may take
up to a decade before effective activation reforms change expectations and reduce benefit caseloads.
More positive lessons concern ways in which unemployment benefits and other cash transfers can
be designed and implemented to encourage and require people who are capable of work to seek and
take jobs.
Where suitable work is available, activation measures should force people to choose between the
options of accepting a job offer and withdrawing from the labour market. Such an approach can
increase total employment and reduce the numbers of people claiming unemployment benefit who
are likely to have other options or who may already be working. There are grounds for closely
monitoring possible negative impacts of stricter conditionality especially on disadvantaged and
‘hard to engage’ clients, but such consequences can be mitigated by ensuring that sanctions are
proportionate and reasonable in duration and employment services and second-chance programmes
are accessible for people who subsequently and genuinely make themselves available for
employment again.
Where a person withdraws from unemployment benefit and labour market activity because they
meet conditions for an inactive benefit, for example, due to poor health or full time caring
responsibilities, entitlement to an appropriate inactive benefit should be facilitated. It is important,
however, that governments closely monitor interactions between unemployment and other working
age benefits. At the outset, policy makers should consider any potential impact of changed activation
requirements on other working age benefits and, where possible, consider coordinating any changes
deemed necessary.