Enhancing employment opportunities for Gozitans : the impact of active labour market policies

Abstract

Gozo is characterised by inherent geographical and connectivity constraints, posing substantial challenges for its residents. These challenges include barriers to employment, such as limited job opportunities on the island and high transportation costs for those working on the main island of Malta. In addition to the introduction of several targeted policies to address such obstacles faced by Gozitans, a significant shift in national labour market policy occurred in 2014 when the government implemented a series of Active Labour Market Policies (ALMPs). This article examines the impact on employment of a national ALMP, specifically the Tapering of Benefits (TOB) scheme, on Gozo. The study investigates the scheme's influence on the job-finding rate amongst Gozitans and assesses its effect on the likelihood of Gozitans maintaining employment after transitioning from benefits to employment. To achieve this, survival analysis and Cox proportional hazard models are used. Results show that the TOB scheme improves the job-finding rate of Gozitan beneficiaries significantly, with the scheme improving employment prospects by 23.4% more than their Maltese counterparts. Furthermore, the scheme is found to significantly contribute to lower job terminations for Gozitans, leading to longer job tenures when compared to individuals residing in Malta.