Conference on Shaping the Future
of the European Social Fund
ESF and Europe 2020
Brussels, 23-24 June, 2010
Michael Wiseman
The George Washington University
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Translates the European Employment Strategy
(EES) into grants-in-aid for Member State (MS)
projects consistent with EU priorities for
employment and social inclusion
Funding priorities reflect this emphasis on
economic mobility and human capital
development
Beyond priorities, ESF projects are targeted at
particular classes of people believed most
vulnerable to unemployment and social exclusion
Some emphasis on development of institutional
capacity
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€75 billion over 7 years is not “chicken feed,”
but it is small compared to total MS spending
on workforce programs
Object must be modest redistribution and
promotion of certain types of activities that
yield external benefits
Benefits include reinforcement of shared
commitment to certain social and economic
objectives
Learning is frequently cited as a benefit
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 How
do we get more of what we
want for the money that we have?
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In looking for pertinent experience, I take my
cue from three ESF features:
(1) the employment/human capital orientation
(2) the strategic rather than comprehensive
character of funding, and
(3) the targeting of specific groups
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In the United States, activities funded under
the Workforce Investment Act (WIA) have
these features
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Created new, more integrated training and
employment assistance system
Co-located wide range of federal government
services in ~ 3,000 “one-stops”
Core is traditional Employment Service
Separate funding streams for adult,
dislocated worker, and youth
Differentiates between core, intensive, and
training services
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WIA is wholly federally funded
◦ Funding is by category, allocated across
states by formula
◦ Accountability promoted with 17 performance
measures
◦ Heavily reliant on common unemployment
insurance system measures
◦ To receive each year’s formula allocation,
states submit a plan and negotiate
performance targets with regional
Department of Labor office
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WIA spends about $4.2 billion per year for a
total population of 310 million
The ESF spends about €10 billion a year—
$12.4 billion (sorry)—for a total population
of 500 million
Last year’s economic stimulus added
another $3 billion to WIA
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Employment
Target groups
Focus on outcomes and institutional
development
Both involve a fiscal and a guiding
relationship between a central government
and diverse member states
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ESF has much broader scope
ESF provides grants for activities that the
member states wouldn’t otherwise undertake;
these efforts come in addition to the core
state-funded employment services
WIA funds the entire service; it is the states’
responsibility to administer the program
Boundaries of WIA activities are better defined
than diverse ESF projects
Subsidiarity less of an issue with WIA
Proportionality issues also of less relevance;
every state program is subject to the same
auditing standards
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It is one thing to spend money in ways that
satisfy the auditors. It is another to spend
funds efficiently and productively
WIA attempts to encourage productivity
with a “High Performance Bonus,” an
increment in funding earned through
achievement
This may offer insights and ideas for ESF
planning
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Fixed pool of money distributed across states
averaging better than 100 percent for target
achievement and meeting minimum
standards on all targets
Total amount approximately $10 million
States earn from $750 thousand- $3 million;
NO variation by size
States have great flexibility in funds use
Political involvement varies
Funding and Department of Labor interest
have declined
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 Amount
of funding
 Target determination procedure
 Counterproductive strategic
behavior
 Lag between achievement and
reward
 No performance feedback
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The bilateral state-federal relationship
Prescription: An Open Method?
Scenarios for ESF funding post-2013 sound
WIA-like in establishing targets and linking
funding to target achievement
Doing this will be more complicated than WIA
It may be productive to offset regulatory
burden with second, “bonus” tier of more
flexible funding
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Small step: Creation of small investment funds
to “support and test promising approaches to
training, breaking down program silos, building
evidence about effective practices, and investing
in what works.”
BIG step: Trialing of regression-adjustment of
state and local workforce board performance
targets for economic and demographic variation
Full roll-out anticipated for 2011, after 7-state
pilots.
This development in target-setting deserves ESF
attention
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