Youth unemployment has risen in Portugal and Spain in recent years and employability has thus gained greater importance among policy-makers. Notwithstanding, policy makers in each country have followed different strategies. This paper analyses all youth oriented active labour market policies (ALMPs) implemented in Portugal and Spain between 2000 and 2017. Our results show that Portugal implemented more ALMPs, invested more in ALMPs, and saw graduates as a top priority. To explain this, the paper argues that in the early 2000s the Portuguese labour law was still much regulated, and reforms were made to increase flexibility. Yet the socialist party never strongly adhered to the labour market liberalization agenda and did not prioritize insiders in their political strategy. Investment in ALMPs (which target all workers) and education seemed a good way to compensate young workers for increasing flexibility. The situation in Spain differed, as the labour market was already more liberalized. Furthermore, the Spanish socialists were less concerned with targeting outsiders.

This work was financed by Portuguese funds through FCT – Foundation for Science and Technology in the framework of the project no. 030016, “BRIGHET – Bringing together Higher Education, Training, and Job Quality”. Reference: PTDC/SOC-SOC/30016/2017.