The influence of active labour market policies on improving the income conditions of self-employed workers

Abstract

Unemployment and job insecurity are pressing social issues that justify government intervention through active labour market policies (ALMPs). Among these, self-employment promotion has gained traction in Europe due to its dual effect on unemployment reduction: directly by removing individuals from unemployment and indirectly by creating additional jobs. However, the contribution of these policies remains under-researched, particularly regarding their effects on self-employed earnings. This study evaluates the association of eight ALMPs on the earnings of self-employed workers in Andalusia, Spain—a region with the country’s highest unemployment rate (16.1% in Q1 2025). Using an ad hoc questionnaire distributed to over 1200 self-employed individuals, the analysis measures the difference between current earnings and prior salaries as employees. The study employs a partial proportional odds model (PPOM) and highlights that the measures related to free courses and discounts for hiring workers may lead to better earnings for beneficiaries of these policies. The findings aim to guide more effective use of public resources, ensuring future entrepreneurial initiatives foster sustainable self-employment and job creation.