How effective are active employment policies to reduce unemployment in EU countries?

This paper is an empirical analysis of panel data cross-sectional ordinary least squares (OLS) of expenditure on employment policies in the European Union (EU). The data source is EUROSTAT and OECD for general analysis of the EU. The results reveal overall level of European active labor market policies are statistically significant in reducing unemployment. In detail employment agencies and training show significant statistical evidence in reducing unemployment. When classified by geographic areas, Central Europe has a better efficiency in the use of active labor market policies in relation to other geographical area. In the other hand, passive labor market policies as unemployment insurance show out stretch to increase unemployment.