In many countries employment services and labour market programmes, whether delivered by public agencies or contracted providers, are found to be less effective in meeting the needs of more disadvantaged job seekers compared to other unemployed people. This article reviews evidence on how countries that outsource employment programmes design outcome-based payments, contracts and differential prices to ensure more equitable outcomes. It considers the extent to which such mechanisms have mitigated the risks of ‘parking’ and ‘creaming’ which are commonly associated with contracted out employment services.
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