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What Works Best For Getting The Unemployed Back To Work: Employment Services Or Small-Business Assistance Programmes? Evidence From Romania

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Nuria Rodriguez-Planas†

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Abstract

Recent empirical evidence has found that employment services and small-business assistance programmes are often successful at getting the unemployed back to work. One important concern of policy makers is to decide which of these two programmes is more effective and for whom. Using unusually rich (for transition economies) survey data and matching methods, I evaluate the relative effectiveness of these two programmes in Romania. While I find that employment services (ES) are, on average, more successful than a small-business assistance programme (SBA), estimation of heterogeneity effects reveals that, compared to non-participation, ES are effective for workers with little access to informal search channels, and SBA works for workers with less access to the primary sector. Finally, if the policy decision is whether to offer ES or SBA to unemployed workers, ES is more effective in getting low-skilled individuals and young workers out of unemployment, while SBA works best for more educated workers.

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Paper provided by FEDEA in its series Working Papers with number 2007-32.

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Date of creation: Nov 2007
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Handle: RePEc:fda:fdaddt:2007-32

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