Knowledge on the determinants of Active Labour Market Policy (ALMP)
spending accumulated during the 2000s. Despite these advances, the
current research lacks a systematic approach to the relevant
determinants. This article fills the research gaps by analysing
simultaneously the 14 most frequently used determinants for the first
time. In addition to these variables, this study introduces a new
factor, namely the impact of economic crises. Through the analysis of
the longest data period yet investigated of 20 Western countries and a
comparison of methodological alternatives, this study both challenges
and reinforces previous findings, as well as produces new ones. For
example, it is the first investigation to reveal the positive effect of
government indebtedness and economic crises on ALMP expenditure.
However, the rivalry between the “usual suspects” continues, as the
negative effects of budget deficits, foreign trade, and population
ageing, and the positive effects of trade union density and GDP growth,
were rediscovered in this analysis.