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Heterogeneous Impacts on Earnings from an Early Effort in Labor Market Programs

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  • Kenneth Lykke Sørensen

    (Department of Economics and Business Economics, Aarhus University, Denmark)

Abstract

Labor market programs that are found to shorten unemployment duration might not be societal efficient if participants do not find suitable jobs in terms of stability, wages, occupation, etc. This paper investigates whether a program, that previously has been shown to lower unemployment duration, also had positive effects on jobs with respect to labor market earnings. The contribution of the paper is two-fold: First, we show that the program had positive effects on earnings in the short term for men, and in the medium and long term for men in one county, which we attribute to the mere taxing of leisure time and human capital accumulation/removal of frictions, respectively. Second, we show that the positive effects are heterogenous across earnings distributions. Taxing leisure time primarily affects low earners while human capital accumulation and removing frictions tend to help high earners.

Suggested Citation

  • Kenneth Lykke Sørensen, 2015. "Heterogeneous Impacts on Earnings from an Early Effort in Labor Market Programs," Economics Working Papers 2015-17, Department of Economics and Business Economics, Aarhus University.
    • Handle: RePEc:aah:aarhec:2015-17
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    Cited by:

    1. Sørensen, Kenneth Lykke, 2016. "Heterogeneous impacts on earnings from an early effort in labor market programs," Labour Economics, Elsevier, vol. 41(C), pages 266-279.
    2. Kennethh Lykke Sørensen, 2015. "Active Labor Market Programs and Reservation Wages: Its a Hazard," Economics Working Papers 2015-27, Department of Economics and Business Economics, Aarhus University.

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    More about this item

    Keywords

    Active Labor Market Policies; randomized controlled trial; quantiles; earnings;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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