Giving people better opportunities to participate in the labour market is a key policy objective in all OECD and EU countries. More and better employment increases disposable income, strengthens economic growth and improves well-being. Well-tailored labour market and social protection policies are a key factor in promoting the creation of high-quality jobs and increasing activity rates. Such policies need to address pressing structural challenges, such as rapid population ageing and evolving skill needs, driven by digitalisation and the green transition. They should also foster social inclusion and mobilise all of society.

Over the past decade, Finland’s labour market has been characterised by high participation and employment rates (79.3% and 73.8% respectively in 2022) in comparison with other OECD countries and a relatively stronger recovery in employment and participation after the COVID‑19 pandemic. Unemployment has also continued to recover, standing at 6.9% in 2022, though it is still relatively high compared to other OECD countries. Moreover, about one in four unemployed people in 2021 were unemployed for more than one year and 6.8% of the labour force who were not actively looking for work, would be willing to take work if it was offered. There are also large labour market disparities across population groups, with youth, older people, men and those with a low education level facing higher unemployment rates than other groups.

Finland invests heavily in active labour market policies (ALMPs) and is one of the top OECD countries when it comes to spending on training programmes for the unemployed. An evaluation of its two main training programmes for unemployed people (labour market training and self-motivated education or studies while maintaining unemployment benefits) suggests that they have positive effects on employment after an initial long lock-in period and support labour mobility across occupations. Further benefits could be derived by targeting these programmes to the groups who benefit the most from them, notably older jobseekers and women. At the same time, Finland should invest more in evidence‑informed policy making by increasing the capacity of the Ministry of Economic Affairs and Employment to conduct and outsource research and by improving data coverage, quality and availability for analysis and research on ALMPs. Building the evidence base will be even more important in the context of the ongoing reforms of the ALMP system.

This chapter sets out some of the key trends in the labour market in Finland and reviews some of the features of the system of provision of active labour market policies (ALMP). This is important context for how the training provided to jobseekers helps to connect them with jobs. The chapter documents the responsibilities of the key institutional stakeholders in the ALMP system and how they interact to provide services for jobseekers. Upcoming reforms to the ALMP framework of support for jobseekers are also discussed.

With the help of a cross-ministry research instrument, the Ministry of Economic Affairs and Employment has been able to meet most of its needs for research on active labour market policies (ALMPs), despite its somewhat modest and fragmented internal resources. Counterfactual impact evaluations have been conducted for most of the key ALMPs over the past years and the operative needs for policy design have been largely covered, although the evidence has been at times dismissed by policy makers referring to its inconclusiveness. A rich set of data are available to be used remotely and securely for ALMP evaluation via Statistics Finland. Nevertheless, the use of data specific to ALMPs suffers due to outdated IT infrastructure supporting ALMP provision and costly access. Moreover, accessing data beyond what is readily available in Statistics Finland can be cumbersome and delay research projects and policy making significantly.

Finland is among the highest spenders on training programmes for unemployed people in the OECD. These programmes help jobseekers acquire and augment the skills they need to prosper in the labour market. This chapter provides details on the two main training programmes that are available to jobseekers and sets them in context of one other. It then goes on to describe the methods and data used in the following chapters of this report to evaluate the impact of these programmes on individuals’ subsequent outcomes in the labour market. In particular, it describes how an occupational index is constructed to aid insight into how jobseekers move between occupations following training.

This chapter evaluates the impact of self-motivated training on the employment, earnings and occupational mobility of its participants. The impact of SMT participation on changes in occupational quality is also explored. To account for the selection of participants into the programme, the counterfactual impact evaluation deploys a propensity score matching methodology. The estimated effects are examined across sub-groups of unemployed based on their age, gender, education level and urban or rural location. A large lock-in effect is observed, as participants delay job search for education, however, employment levels recover over the longer term. Self-motivated training does not lead, on average, to moves up the occupational ladder. Women and older individuals benefit more on average from self-motivated training relative to their counterparts.

This chapter measures the effect of labour market training (LMT) on the employment, earnings and occupational mobility of participants. The change induced along the distribution of occupational quality is also explored. To account for the selection of participants into the programme, the counterfactual impact evaluation deploys a propensity score matching methodology. The estimated effects are examined across sub-groups of unemployed (age, gender, education level and urban or rural location) and across different durations of the programme. In the long term, employment of LMT participants rises significantly compared to non-participants, whilst earnings are similar. LMT does not lead, on average, to moves up the occupational ladder. Older individuals and women enjoy the largest gains from participation, and longer labour market trainings have larger effects in the long term for employment and earnings.

The broad question when considering training is whether and how it influences skill development and acquisition to connect people better to jobs. Labour market training (LMT) and self-motivated training (SMT) are designed to achieve this objective with very different underlying training offers. With the introduction of SMT in 2010, better financial support became available to acquire degree level education. This raises the question of how its introduction affected jobseekers’ outcomes as a whole. Does SMT replace LMT for some individuals? Does it complement the training that LMT provides? This chapter addresses these questions by evaluating the impact that SMT has had on the mix and availability of training to jobseekers.