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Active labour market programmes and reservation wages: it is a hazard

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  • Kenneth Lykke Sørensen

Abstract

This article uses a randomized controlled trial to show that positive earnings effects of a labour market programme can be caused by either a faster return to employment together with a lowering of reservation wages or a more moderate return to employment together with an increase in reservation wages. I model wages and unemployment duration simultaneously in a hazard framework allowing for unobserved heterogeneity.

Suggested Citation

  • Kenneth Lykke Sørensen, 2017. "Active labour market programmes and reservation wages: it is a hazard," Applied Economics Letters, Taylor & Francis Journals, vol. 24(9), pages 589-593, May.
  • Handle: RePEc:taf:apeclt:v:24:y:2017:i:9:p:589-593
    DOI: 10.1080/13504851.2016.1213358
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