For countries within the Euro, introducing a Job Guarantee (JG) and establishing close to full employment might pose a macroeconomic risk, as higher economic activity in the country with a Job Guarantee would mean a current account deficit, budgets deficit, and possibly financial market pressure. Despite these conceptual problems, how can a form of Job Guarantee still be implemented? I adapt the idea of a job guarantee to focus exclusively on the long-term unemployed. This ensures a lower entry rate into the Job Guarantee due to a minimum unemployment duration requirement for eligibility. While this version of the JG still lifts the worst affected out of unemployment, it keeps costs limited. For countries with an established welfare state that pays adequate unemployment and/or social assistance benefits to long-term unemployed persons, about half of the needed funds for publicly created jobs within the JG are already spent in the forms of transfers. They can be converted to make up a part of the gross wage of a JG job. This way, every long-term unemployed person in Austria can get an offer for a publicly funded, socially meaningful job.
In my research, I conduct cost calculations for Austria and show that an absolute maximum of merely 0.36% of Austrian GDP (in 2017) would be needed to finance up to 150.000 jobs for the long-term unemployed.
Here are the slides and paper:
English title: A job guarantee for the long-term unemployed in Austria