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Costs and benefits of Danish active labour market programmes

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Author Info

  • Jespersen, Svend T.
  • Munch, Jakob R.
  • Skipper, Lars

Abstract

Since 1994, unemployed workers in the Danish labour market have participated in active labour market programmes on a large scale. This paper contributes with an assessment of costs and benefits of these programmes. Long-term treatment effects are estimated on a very detailed administrative dataset by propensity score matching. For the years 1995 - 2005 it is found that private job training programmes have substantial positive employment and earnings effects, but also public job training ends up with positive earnings effects. Classroom training does not significantly improve employment or earnings prospects in the long run. When the cost side is taken into account, private and public job training still come out with surplusses, while classroom training leads to a deficit.

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Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 15 (2008)
Issue (Month): 5 (October)
Pages: 859-884

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Handle: RePEc:eee:labeco:v:15:y:2008:i:5:p:859-884

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Web page: http://www.elsevier.com/locate/labeco

Related research

Keywords: Cost-benefit analysis Active labour market programmes Propensity score matching;

References

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  1. Laura Larsson, 2003. "Evaluation of Swedish Youth Labor Market Programs," Journal of Human Resources, University of Wisconsin Press, vol. 38(4).
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  3. Martin, John P. & Grubb, David, 2001. "What works and for whom: a review of OECD countries' experiences with active labour market policies," Working Paper Series 2001:14, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  4. Barbara Sianesi, 2001. "Differential effects of Swedish active labour market programmes for unemployed adults during the 1990s," IFS Working Papers W01/25, Institute for Fiscal Studies.
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  12. David H. Greenberg, 1997. "The Leisure Bias in Cost-Benefit Analyses of Employment and Training Programs," Journal of Human Resources, University of Wisconsin Press, vol. 32(2), pages 413-439.
  13. V. Joseph Hotz & Guido W. Imbens & Jacob A. Klerman, 2006. "Evaluating the Differential Effects of Alternative Welfare-to-Work Training Components: A Re-Analysis of the California GAIN Program," NBER Working Papers 11939, National Bureau of Economic Research, Inc.
  14. Michael Lechner, 2002. "Some practical issues in the evaluation of heterogeneous labour market programmes by matching methods," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 165(1), pages 59-82.
  15. Jochen Kluve & Christoph M. Schmidt, 2002. "Can training and employment subsidies combat European unemployment?," Economic Policy, CEPR & CES & MSH, vol. 17(35), pages 409-448, October.
  16. Michael Gerfin & Michael Lechner, 2002. "A Microeconometric Evaluation of the Active Labour Market Policy in Switzerland," Economic Journal, Royal Economic Society, vol. 112(482), pages 854-893, October.
  17. Donald O. Parsons & Torben Tranæs & Helene Bie Lilleør, 1999. "Voluntary Public Unemployment Insurance," EPRU Working Paper Series 03-05, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics, revised Jun 2003.
  18. James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998. "Characterizing Selection Bias Using Experimental Data," Econometrica, Econometric Society, vol. 66(5), pages 1017-1098, September.
  19. Heckman, James J & Ichimura, Hidehiko & Todd, Petra E, 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 605-54, October.
  20. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier.
  21. Couch, Kenneth A, 1992. "New Evidence on the Long-Term Effects of Employment Training Programs," Journal of Labor Economics, University of Chicago Press, vol. 10(4), pages 380-88, October.
  22. Jensen, Peter & Rosholm, Michael & Svarer, Michael, 2003. "The response of youth unemployment to benefits, incentives, and sanctions," European Journal of Political Economy, Elsevier, vol. 19(2), pages 301-316, June.
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