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The global economic and financial crisis that commenced in 2008 has triggered massive increases in unemployed in almost all Western industrialized nations. Among the OECD nations, about half have reacted – inter alia – by introducing or expanding temporary, public sector jobs in the so-called “second labour market”. This had also been a preferred option in the 1980s, following the oil shocks. Since then, however, these programs have increasingly been seen as ineffective and their use remains highly controversial. What then explains that numerous OECD countries have opted for this type of intervention, while others have not? By applying a mixed-methods approach, we first identify through the application of a discriminant analysis that the financial room for manoeuvre coupled with a rapid rise in youth unemployment are the best predictors for the introduction of direct job-creation measures. Subsequently we carefully trace the political events in three most different systems, including Germany, Sweden and the UK, thus elaborating on the how and why these two factors are crucial explanatory variables.

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