Employment services promote the efficient allocation of labor by, among other things, promoting labor mobility and improving productivity. This paper assesses the cost- effectiveness of services designed to expedite the exchange of labor between job-seekers and employers. The authors find that the benefits of employment services are not uniform. Benefits may be reduced in small countries with a large informal sector, or when the economy is stagnant and the demand for labor is depressed (even though the need for the services may be greater under such conditions). The authors advocate a balance between public and private sector delivery of employment services. They favor opening the private market for what they term support services, which increase productivity and include income support and retraining. Such support services are distinct from what the authors call core services, provision of which they believe is properly left to the public sector. Core services to assist job-seekers include job-placement services, relocation assistance, counseling, and skills assessment. The authors find that core services are cost-effective and that public sector providers can ensure that such services are delivered to unemployed, low-skilled, or semiskilled workers whose needs may not be met by the private sector. The paper reviews the justification for and development of employment services over time and compares various approaches to the provision of such services. It reviews the various types of employment services and examines the differences between public and private sector delivery.