Active labour market policy in Scotland: does it make a difference?

Purpose – The paper aims to show that active labour market policies in Scotland over a nine‐year period have failed to meet key policy objectives. Design/methodology/approach – The paper uses the UK national online manpower information system (NOMIS) to conduct a detailed statistical analysis of the spatial differentials in exits from and entry to unemployment across 72 Parliamentary constituencies. The analysis is conducted by reference to the concepts of convergence, NAIRU and hysterisis. Findings – The findings suggest a presence of hysterisis and absence of spatial convergence such that some areas in Scotland have become worse off in terms of the risk of unemployment and despite active labour market intervention. Research limitations/implications – Future research needs to be undertaken at the micro‐spatial level to confirm these findings and to focus on the weaknesses in the design of active labour market policies. Practical implications – Active labour market policies in Scotland do not work in terms of reducing the risk of unemployment. Policy needs to focus on creating demand for labour rather than an almost exclusive reliance on “promoting” the supply‐side. Originality/value – The key contribution of this paper is that it is the first to provide a detailed analysis of the Government's own data on unemployment distribution – it should be of value to both academicians and policy makers in terms of both analytical approach and policy design.