Crossroads of active labour market policies and vocational training in times of skills shortage

For the first time since the 1970s, advanced welfare states are experiencing a labour market context characterised by skill and labour shortage. What does it mean for active labour market policies (ALMPs) and for social policies more generally? In their early days, ALMPs ought to tackle skills shortage and thus entailed the training of jobless individuals with the objective to sustainably include them in the active labour force. Over time and over the course of their expansion, ALMPs were more strongly guided at keeping people off unemployment benefits and at re-inserting the unemployed into the labour market as soon as possible. This is because since the 1970s, European welfare states have had to deal with lack of work opportunities and mass unemployment. After the 1970s and 1980s, where ALMPs provided alternatives to market employment, the activation rationale from the 1990s and 2000s led toALMPs targeting mostly low skilled individuals who were incentivized to accept any type of work. As a result, labour market training still remained one component of ALMPs, yet with a different relationship towards skill development. The aim of this study is to uncover if ALMPs experience reorientation from an activation logic to a skills shortage logic and if so, how this reorientation is linked to established systems of skills supply. At the same time, proposals to close the ever-increasing gap between the demands and supplies of vocational mid-level skills, entail mixes of instruments with different policy backgrounds. Even though labor market and skill formation policies are concerned with similar objectives and share many stakeholders, the scholarly knowledge about their complementarities and/or tensions is scarce. With the issue of skill shortage on the political agenda, there is potential for ALMPs to go full circle. However, we can also expect that renewed attention towards the training component of ALMPs bears tensions with policies that have usually been drawn upon to satisfy the demand for skilled workers such as vocational education and training (VET). Consequently, this study is particularly concerned with the crossroads of ALMPs and VET. To investigate the training component of ALMPs and its relationship to VET, the study opts for a comparison between four countries with statist (France, Sweden) and dual (Denmark, Germany) VET systems, while at same having a strong ALMP sector.