Is Individual Placement and Support an “Active” Labor Market Policy?

Objective: The aim of this study was to propose individual placement and support (IPS) as an important component of modern labor market policies and as a paradigm to be considered while drafting and adopting them. Background: Modern European labor market policies, termed activation policies, aim to support a personal commitment to seek employment by linking welfare benefits to active engagement in job search. Method: In this essay, the authors describe European “activation policies,” outline labor market regulations in Italy in the last 3 decades, and analyze core components of IPS in the light of labor policies. Findings: IPS, which provides individual psychological and practical support, has become a highly successful method for helping people with mental disorders to reach competitive employment in Italy. It has been effective in many countries, regardless of local employment conditions and market regulations. Its effectiveness may be greater in places with weaker employment protection legislation and integration efforts and less generous disability benefits, as is the case in Italy. Conclusions and Implications for Policies: Labor market policies should carefully balance financial benefits, integration efforts, and individual support. They should include IPS for people with mental disorders. Modified versions of IPS may also be beneficial to nonpsychiatric unemployed populations.