The private consequences of public policies: active labor market policies and social ties in Europe

Abstract

Though comparative political economists have examined active labor market policies (ALMPs) by focusing narrowly on how they affect economic outcomes, this paper develops and argues for a broadened conception of how such policies can shape a variety of outcomes beyond the labor market. In particular, I argue that ALMPs have the potential to shape the quality of people’s private lives by enhancing their opportunities and motives to interact with social others. Analyses of data collected in 17 European countries show that individuals in countries with higher spending on ALMPs report more frequent social interactions and a reduced sense of social exclusion. Moreover, I find that the positive influence of labor market policies on social ties is stronger among individuals whose labor market position is more precarious. The results suggest that public policies have important and multifaceted consequences for people’s private lives and countries’ patterns of social cohesion.