Unemployment has human, social and economic costs.

On an individual basis, unemployment results in a loss of professional income and a loss of skills, which may affect the entire career profile resulting in long-term wage scarring and cause living standards to decline. It can also lead to social isolation and loss of self-confidence and affect psychological and physical well-being.

Collectively, it leads to a decline in production and income and to deskilling. It also results in higher social expenditure and lower revenues from social contributions, income tax and consumption taxes.

Social security institutions play an essential role in reducing these costs and in unleashing the full human, social and economic potential available through the development of appropriate strategies that support an efficient labour market in all its aspects.

These strategies are designed, first of all, to prevent unemployment by supporting efforts to limit the number of new entrants to the unemployment compensation system while ensuring that it remains accessible for those in genuine need. This requires the close cooperation of social security, employment and training institutions, employers’ and workers’ representatives and public authorities. Appropriate analysis of labour market trends and identification of labour market participants facing potential unemployment make it possible to anticipate the needs of companies and workers and to allocate the required resources to meet these needs in a manner that promotes a more sustainable and more inclusive labour market.

They are also designed to support efforts to shorten the period of unemployment. This is done through different programmes and mechanisms, skills development and reinsertion techniques, in partnership with different actors. In particular, the aim is to avoid recurring or long-term periods of unemployment by upgrading skills to match labour market demand and reducing barriers to labour market participation.

These strategies, while clearly similar in terms of economic, social and societal objectives, require a substantially differentiated individual, organizational and systems approach.

The ISSA Guidelines on the Promotion of Sustainable Employment aspire to influence a paradigm shift in the design of unemployment insurance schemes. They seek to break away from the notion of passive unemployment insurance schemes, limited to providing a source of replacement income, in favour of active schemes, the main objectives of which are to support and secure labour market transitions, accelerate the reintegration of recipients of unemployment benefits who are fully or partially capable of working, reduce unemployment and increase labour force and labour market participation.

The final section of the Guidelines also provides some ideas for responding to the main current labour market challenges.