Job guarantee trial ‘eliminates’ long-term unemployment

Oxford University is claiming that the first universal job guarantee experiment in the world has eliminated long-term unemployment while making participants happier, more financially secure and more involved in their community.

The pilot, which has just finished its first phase, was designed and is being evaluated by the University’s economists and is run by the Lower Austrian Public Employment Service. Launched in 2020 in the Austrian town of Marienthal, the voluntary scheme is unique in offering a universal and unconditional guarantee of a well-paid job to every resident who has been unemployed for more than 12 months.

It finds that participants’ incomes rose and they gained greater financial security; that those taking part were happier, more satisfied, and felt more in control of their lives; that they had more meaningful interactions with others, felt more valued, and felt they had more people around them who they could rely on; that long-term unemployment was eliminated; and that these improvements continued across the programme’s first two years.

Programme participants are supported to find work and are guaranteed paid work in either the private or the public sector. They earn at least the minimum wage, bringing their income above their previous social benefits. All participation is voluntary; no sanctions are involved.

Maximilian Kasy, University of Oxford professor and study author, said: “It is striking to see what a difference the programme made. Yes, people had more money, but the positive impacts went well beyond economics: they were happier, more rooted in their community, and felt in the driving seat of their lives again.”

The participants started with two months’ preparation, including one-to-one training, counselling and, for those who need it, support from experienced social workers, doctors and psychologists. They are then helped to find a suitable and subsidised private sector job or supported to create a new job based on their skills and their knowledge of their community’s needs. A year of Austrian unemployment costs approximately €30,000 per person whereas the project costs €29,841 per participant per year.

One of the participants, Werner V., aged 60, said: “After more than 600 job applications, my wish for employment proved hopeless. Too old, too expensive, without long term prospects due to my age, seemingly over-qualified for service jobs… many obstacles seemed to exist. The job guarantee proved extremely valuable and useful for me. In cooperation with the municipality and the local museum, I am archiving and documenting the cultural, scientific and economic value of the historical site of Marienthal.”

Jobs created since the start of the programme include work in carpentry, renovation, gardening, elder care and office administration. Some projects were created by participants and several support communal public services, including the local school and kindergarten.

Mariethal was chosen because structural unemployment in Austria has been rising since the 1980s and was compounded by the COVID-19 pandemic. When this pilot began in August 2020, roughly one in five unemployed people in Lower Austria had been looking for a job for more than a year.

In the 1930s, Marienthal was the site of a ground-breaking social research study on how mass unemployment affected not just incomes but also health, wellbeing, social ties, and community life. Oxford University says the new study examines the opposite: how the economy, the community and people’s lives change with access to guaranteed employment.

*Picture credit: University of Oxford. Two participants are employed with an association providing animal-assisted therapy for children with various conditions. 

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