Social Policies and Employability in Algeria: An Empirical Analysis of Active Labour Market Programmes and Workforce Outcomes (2010-2023)

Abstract

This paper analyzes the role of social policies, and more specifically active labour market policies (ALMPs), on employment and employability in Algeria over 2010-2023. Informed by human capital theory, institutional economics, and the capability approach, the study utilizes a fixed-effects panel regression model with secondary data drawn from the World Bank, the International Labour Organization (ILO), and Algeria’s ONS. The analysis looks at how government expenditure on social protection, education expenditure, vocational training enrolment and unemployment are related with each other in Algeria’s 58 wilayas. The results show that increased social protection spending has a negative and statistically significant association with all unemployment (β = -0.23, p < 0.05), but that with youth unemployment is more muted (β = -0.09, p > 0.10). Funding for education and taking part in vocational training are better indicators for employment particularly for those aged 16-24. According to the research, ALMPs that focus on entrepreneurship and the setting-up of micro-enterprises (for example ANSEJ or CNAC) have a limited effect on employment in the long-run. Most of the beneficiary enterprises stop operating after three years or so. There is a need for a social policy framework that is better integrated. This framework should combine demand-side labour market interventions with skills development to achieve an inclusive economy. It must also lead to the expansion of social security coverage to informal sector workers, as well as address structural gender barriers to women’s workforce participation. These findings add to the empirical literature on social protection and employability across the Middle East and North Africa (MENA) region.