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Differential Effects of Active Labour Market Programmes in the Early Stages of Young People's Unemployment

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  • Kari Hämäläinen
  • Virve Ollikainen
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    Abstract

    This study evaluates the long-run effects of Finnish active labour market programmes in youth labour markets. The effectiveness of programmes is measured by a number of outcomes, including employment, unemployment, programme participation, education, being out of the labour force and annual earnings. A non-parametric propensity score matching approach adapted for the case of multiple programmes is applied to estimate the average programme effects. Our results point out distinct variation in the success of programmes, and indicate that job placement and labour market training are successful not only in promoting employment but also in increasing the earnings of participants. The largest of all programmes, youth practical training, is not found to have any impacts on young persons? labour market careers.

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    Bibliographic Info

    Paper provided by Government Institute for Economic Research Finland (VATT) in its series Research Reports with number 115.

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    Date of creation: 31 Dec 2004
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    Handle: RePEc:fer:resrep:115

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    Related research

    Keywords: active labour market programmes; propensity score; matching; heterogeneous treatment effects JEL classification: C14; J13; J68;

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    1. Dan A. Black & Jeffrey Smith, 2003. "How Robust is the Evidence on the Effects of College Quality? Evidence From Matching," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers, University of Western Ontario, CIBC Centre for Human Capital and Productivity 20033, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
    2. Michael Gerfin & Michael Lechner, 2002. "A Microeconometric Evaluation of the Active Labour Market Policy in Switzerland," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 112(482), pages 854-893, October.
    3. Rajeev H. Dehejia & Sadek Wahba, 1998. "Causal Effects in Non-Experimental Studies: Re-Evaluating the Evaluation of Training Programs," NBER Working Papers 6586, National Bureau of Economic Research, Inc.
    4. 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, Royal Statistical Society, vol. 165(1), pages 59-82.
    5. Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity Score-Matching Methods For Nonexperimental Causal Studies," The Review of Economics and Statistics, MIT Press, MIT Press, vol. 84(1), pages 151-161, February.
    6. LaLonde, Robert J, 1986. "Evaluating the Econometric Evaluations of Training Programs with Experimental Data," American Economic Review, American Economic Association, American Economic Association, vol. 76(4), pages 604-20, September.
    7. Lechner, Michael, 1999. "Earnings and Employment Effects of Continuous Off-the-Job Training in East Germany after Unification," Journal of Business & Economic Statistics, American Statistical Association, American Statistical Association, vol. 17(1), pages 74-90, January.
    8. Dex, Shirley, et al, 1995. "Cross-National Comparisons of the Labour Force Participation of Women Married to Unemployed Men," Oxford Economic Papers, Oxford University Press, Oxford University Press, vol. 47(4), pages 611-35, October.
    9. Markus Froelich, 2002. "Programme Evaluation with Multiple Treatments," University of St. Gallen Department of Economics working paper series 2002, Department of Economics, University of St. Gallen 2002-17, Department of Economics, University of St. Gallen.
    10. Barbara Sianesi, 2002. "An evaluation of the Swedish system of active labour market programmes in the 1990s," IFS Working Papers, Institute for Fiscal Studies W02/01, Institute for Fiscal Studies.
    11. 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, Wiley Blackwell, vol. 64(4), pages 605-54, October.
    12. Jespersen, Svend T. & Munch, Jakob R. & Skipper, Lars, 2008. "Costs and benefits of Danish active labour market programmes," Labour Economics, Elsevier, Elsevier, vol. 15(5), pages 859-884, October.
    13. Lechner, Michael, 1999. "Identification and Estimation of Causal Effects of Multiple Treatments Under the Conditional Independence Assumption," IZA Discussion Papers 91, Institute for the Study of Labor (IZA).
    14. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 65(2), pages 261-94, April.
    15. Raaum, Oddbjørn & Torp, Hege & Zhang, Tao, 2003. "Do individual programme effects exceed the costs? Norwegian evidence on long run effects of labour market training," Memorandum, Oslo University, Department of Economics 15/2002, Oslo University, Department of Economics.
    16. Michael Lechner, 2002. "Program Heterogeneity And Propensity Score Matching: An Application To The Evaluation Of Active Labor Market Policies," The Review of Economics and Statistics, MIT Press, MIT Press, vol. 84(2), pages 205-220, May.
    17. Guido W. Imbens, 1999. "The Role of the Propensity Score in Estimating Dose-Response Functions," NBER Technical Working Papers, National Bureau of Economic Research, Inc 0237, National Bureau of Economic Research, Inc.
    18. James J. Heckman, 1989. "Choosing Among Alternative Nonexperimental Methods for Estimating the Impact of Social Programs: The Case of Manpower Training," NBER Working Papers 2861, National Bureau of Economic Research, Inc.
    19. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, Elsevier, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier.
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    Cited by:
    1. Clément Kouadio Kouakou, 2010. "Politique active d'emploi et employabilité des jeunes dans la ville d'Abidjan," Documents de travail, Groupe d'Economie du Développement de l'Université Montesquieu Bordeaux IV 159, Groupe d'Economie du Développement de l'Université Montesquieu Bordeaux IV.
    2. Quintini, Glenda & Martin, John P. & Martin, Sébastien, 2007. "The Changing Nature of the School-to-Work Transition Process in OECD Countries," IZA Discussion Papers 2582, Institute for the Study of Labor (IZA).
    3. Stavros Rodokanakis & Vasileios A. Vlachos Author-Workplace-Department of European and International Studies, University of Macedonia, 2012. "Measuring the Unemployment Risk in Northern Greece from the LFS Micro-Data during the Period 1994-2006," Review of Economic Analysis, Rimini Centre for Economic Analysis, Rimini Centre for Economic Analysis, vol. 4(2), pages 224-246, December.
    4. Stavros Rodokanakis, 2010. "A Non-Experimental Evaluation of Unemployment Risk in Crete and the Ionian Islands: Regional Evidence for Greece," Acta Oeconomica Pragensia, University of Economics, Prague, University of Economics, Prague, vol. 2010(4), pages 44-63.
    5. RODOKANAKIS, Stavros & VLACHOS, Vasileios, 2010. "A Non-Experimental Evaluation Of Education And Training In Greece: The Cases Of Northern Aegean And Crete," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, Euro-American Association of Economic Development, vol. 10(1).
    6. Kluve, Jochen, 2010. "The effectiveness of European active labor market programs," Labour Economics, Elsevier, Elsevier, vol. 17(6), pages 904-918, December.

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