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Regional Treatment Intensity as an Instrument for the Evaluation of Labour Market Policies

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  • Fröhlich, Markus
  • Lechner, Michael

Abstract

The effects of active labour market policies (ALMP) on individual employment chances and earnings are evaluated by non-parametric instrumental variables based on Swiss administrative data with detailed regional information. Using an exogenous variation in the participation probabilities across fairly autonomous regional units (cantons) generated by the federal government, we identify the effects of ALMP by comparing individuals living in the same local labour market but in different cantons. Taking account of small sample problems occurring in IV estimation, our results suggest that ALMP increases individual employment probabilities by about 10% in the short term for a weighted subpopulation of compliers.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4304.

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Date of creation: Mar 2004
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Handle: RePEc:cpr:ceprdp:4304

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Keywords: active labour market policy; fuller estimator; geographic variation; local average treatment effect; small sample problems of IV; state borders; switzerland; weak instruments;

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Cited by:
  1. Beatrix Brügger & Rafael Lalive & Josef Zweimüller, 2009. "Does Culture Affect Unemployment? Evidence from the Röstigraben," NRN working papers 2009-10, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
  2. Graversen, Brian Krogh & Jensen, Peter, 2006. "A Reappraisal of the Virtues of Private Sector Employment Programmes," IZA Discussion Papers 2230, Institute for the Study of Labor (IZA).
  3. Frijters, Paul & Gregory, Bob, 2006. "From Golden Age to Golden Age: Australia's "Great Leap Forward"?," IZA Discussion Papers 2068, Institute for the Study of Labor (IZA).
  4. Ammermüller, Andreas & Zwick, Thomas & Boockmann, Bernhard & Maier, Michael, 2007. "Do hiring subsidies reduce unemployment among the elderly? Evidence from two natural experiments," ZEW Discussion Papers 07-001, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

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