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An evaluation of the active labour market programmes in Sweden

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  • Sianesi, Barbara

    ()
    (IFAU - Office of Labour Market Policy Evaluation)

Abstract

The low unemployment rates traditionally enjoyed by Sweden have often been attributed to the country’s extensive system of active labour market programmes, which have thus often been regarded as a model for other countries to emulate. The paper investigates the presence of short- and long-term treatment effects on a number of outcomes, including employment and unemployment benefit collection. Special attention is devoted to subsequent outcomes experienced by former participants, in particular to their job attachment and their performance should they fall back into unemployment. Finally, the distinctive feature of the Swedish labour market policy, whereby participation in programmes renews eligibility to generous unemployment compensation, is investigated in relation to the incentives it is likely to create to keep cycling between compensated unemployment spells and programme participation. The approach used is propensity score matching, with some additional analyses trying to account for a partially unobserved outcome variable due to misclassification problems in the data. Joining a programme as opposed to waiting longer in open unemployment appears on average to have a positive dynamic effect on participants’ employment rates. The overall findings indicate however that the human capital-enhancing component of the programmes may not always be strong enough to outcompete the work disincentives provided by the system. Furthermore, even when cycling has been ruled out by focusing on individuals observed to exit their unemployment spell, programmes are found to have no effect on any of the outcomes considered.

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Bibliographic Info

Paper provided by IFAU - Institute for Evaluation of Labour Market and Education Policy in its series Working Paper Series with number 2001:5.

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Length: 98 pages
Date of creation: 14 Jun 2001
Date of revision:
Publication status: Published in The Review of Economics and Statistics, 2004, pages 133-155.
Handle: RePEc:hhs:ifauwp:2001_005

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Postal: IFAU, P O Box 513, SE-751 20 Uppsala, Sweden
Phone: (+46) 18 - 471 70 70
Fax: (+46) 18 - 471 70 71
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Web page: http://www.ifau.se/
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Related research

Keywords: Labour; market; programmes;

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References

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  1. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Wiley Blackwell, vol. 65(2), pages 261-94, April.
  2. James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998. "Characterizing Selection Bias Using Experimental Data," NBER Working Papers 6699, National Bureau of Economic Research, Inc.
  3. Forslund, Anders & Kolm, Ann-Sofie, 2000. "Active labour market policies and real-wage determination - Swedish evidence," Working Paper Series 2000:7, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  4. Michael Lechner, 2000. "An Evaluation of Public-Sector-Sponsored Continuous Vocational Training Programs in East Germany," Journal of Human Resources, University of Wisconsin Press, vol. 35(2), pages 347-375.
  5. 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, vol. 64(4), pages 605-54, October.
  6. Anders Forslund & Alan B. Krueger, 1997. "An Evaluation of the Swedish Active Labor Market Policy: New and Received Wisdom," NBER Chapters, in: The Welfare State in Transition: Reforming the Swedish Model, pages 267-298 National Bureau of Economic Research, Inc.
  7. repec:att:wimass:8909 is not listed on IDEAS
  8. Heckman, James J. & Robb, Richard Jr., 1985. "Alternative methods for evaluating the impact of interventions : An overview," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 239-267.
  9. Gerfin, Michael & Lechner, Michael, 2000. "Microeconometric Evaluation of the Active Labour Market Policy in Switzerland," IZA Discussion Papers 154, Institute for the Study of Labor (IZA).
  10. Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity score matching methods for non-experimental causal studies," Discussion Papers 0102-14, Columbia University, Department of Economics.
  11. repec:fth:coluec:9899-01 is not listed on IDEAS
  12. Agell, J. & Lundborg, P., 1999. "Survey Evidence on Wage Rigidity and Unemployment: Sweden in the 1990s," Papers 1999:12, Uppsala - Working Paper Series.
  13. Edin, P-A. & Holmlund, B., 1990. "Unemployment, Vacancies And Labour Market Programmes: Swedish Evidence," Papers 1990j, Uppsala - Working Paper Series.
  14. Lundin, Martin & Skedinger, Per, 2006. "Decentralisation of active labour market policy: The case of Swedish local employment service committees," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 775-798, May.
  15. Melkersson, Maria, 1999. "Unemployment duration and heterogenous search behavior among Swedish disabled workers," Working Paper Series 1999:5, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  16. 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.
  17. Manski, Charles F, 1990. "Nonparametric Bounds on Treatment Effects," American Economic Review, American Economic Association, vol. 80(2), pages 319-23, May.
  18. Melkersson, Maria, 1999. "Policy programmes only for a few? Participation in labour market programmes among Swedish disabled workers," Working Paper Series 1999:1, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  19. Ham, John C & LaLonde, Robert J, 1996. "The Effect of Sample Selection and Initial Conditions in Duration Models: Evidence from Experimental Data on Training," Econometrica, Econometric Society, vol. 64(1), pages 175-205, January.
  20. 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, vol. 17(1), pages 74-90, January.
  21. repec:fth:iniesr:537 is not listed on IDEAS
  22. Matz Dahlberg & Anders Forslund, 2005. "Direct Displacement Effects of Labour Market Programmes," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(3), pages 475-494, 09.
  23. Larsson, Laura, 2000. "Evaluation of Swedish youth labour market programmes," Working Paper Series 2000:1, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  24. Johansson, Per & Martinson, Sara, 2000. "The effect of increased employer contacts within a labour market training program," Working Paper Series 2000:10, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  25. 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).
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