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Differential effects of Swedish active labour market programmes for unemployed adults during the 1990s

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  • Sianesi, Barbara

    ()
    (IFAU - Insitute for Labour Market Policy Evaluation)

Abstract

The paper evaluates the differential performance of the six main types of Swedish programmes that were available to adult unemployed workers entitled to unemployment benefits in the 1990s: labour market training, workplace introduction, work experience placement, relief work, trainee replacement and employment subsidies. On the basis of a large and particularly rich administrative dataset, propensity score multiple-treatment matching methods are applied to investigate the differential performance of the programmes both relative to one another and vis-à-vis more intense job search in open unemployment. Outcomes being assessed are short- and long-term employment rates as well as the probability of collecting unemployment benefits over time. Compared to waiting longer in open unemployment, all the programmes initially reduce their participants’ employment probability in the short term (lock-in effect). Positive findings on more long term employment prospects are confined to job subsidies alone. Participation in trainee replacement makes no difference to deputies’ subsequent labour market outcomes. Individuals joining any of the remaining programmes later display either the same (workplace introduction) or lower employment rates coupled with a higher benefit collection probability than if they had searched further as openly unemployed. A likely factor behind these disappointing results is the use of such types of programmes simply as a way to re-qualify for unemployment benefits. As to the pair-wise comparison of the six programmes, the central finding is again that the more similar a programme is to a regular job, the higher the programme’s benefits to its participants, with employment subsidies by far the best performer, followed by trainee replacement. Several macroeconomic studies have however documented large and negative displacement and dead-weight effects for exactly these types of programme, which highlights the difficult trade-off faced by labour market policy.

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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 2002:5.

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Length: 52 pages
Date of creation: 15 Feb 2002
Date of revision:
Handle: RePEc:hhs:ifauwp:2002_005

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Keywords: active labour market programmes; evaluation; multiple-treatment matching; treatment effects;

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References

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  1. Lundin, Martin & Skedinger, Per, 2000. "Decentralisation of active labour market policy: The case of Swedish local employment service committees," Working Paper Series 2000:6, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  2. Guido W. Imbens, 1999. "The Role of the Propensity Score in Estimating Dose-Response Functions," NBER Technical Working Papers 0237, National Bureau of Economic Research, Inc.
  3. 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.
  4. Martin, John P. & Grubb, David, 2001. "What works and for whom: a review of OECD countries' experiences with active labour market policies," Working Paper Series 2001:14, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  5. 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.
  6. 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).
  7. Bonnal, Liliane & Fougere, Denis & Serandon, Anne, 1997. "Evaluating the Impact of French Employment Policies on Individual Labour Market Histories," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 683-713, October.
  8. 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.
  9. 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.
  10. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier.
  11. Calmfors, Lars & Forslund, Anders & Hemström, Maria, 2002. "Does Active Labour Market Policy Work? Lessons from the Swedish Experiences," Seminar Papers 700, Stockholm University, Institute for International Economic Studies.
  12. 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.
  13. Larsson, Laura, 2000. "Evaluation of Swedish Youth Labour Market Programmes," Working Paper Series 2000:6, Uppsala University, Department of Economics.
  14. 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.
  15. 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.
  16. Ridder, G, 1986. "An Event History Approach to the Evaluation of Training, Recruitment and Employment Programmes," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(2), pages 109-26, April.
  17. Markus Frölich & Almas Heshmati & Michael Lechner, 2004. "A microeconometric evaluation of rehabilitation of long-term sickness in Sweden," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(3), pages 375-396.
  18. Michael Gerfin & Michael Lechner, 2002. "A Microeconometric Evaluation of the Active Labour Market Policy in Switzerland," Economic Journal, Royal Economic Society, vol. 112(482), pages 854-893, October.
  19. Carling, Kenneth & Gustafson, Lena, 1999. "Self-employment grants vs. subsidized employment: Is there a difference in the re-unemployment risk?," Working Paper Series 1999:6, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  20. repec:fth:iniesr:537 is not listed on IDEAS
  21. 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.
  22. Larsson, L., 2000. "Evaluation of Swedish Youth Labour Market Programmes," Papers 2000:6, Uppsala - Working Paper Series.
  23. 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.
  24. 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.
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Citations

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Cited by:
  1. Calmfors, Lars & Forslund, Anders & Hemström, Maria, 2002. "Does active labour market policy work? Lessons from the Swedish experiences," Working Paper Series 2002:4, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  2. Paolo, NATICHIONI & Silvia LORIGA, 2008. "Short and long term evaluations of Public Employment Services in Italy," Discussion Papers (ECON - Département des Sciences Economiques) 2008030, Université catholique de Louvain, Département des Sciences Economiques.
  3. Carling, Kenneth & Larsson, Laura, 2002. "Does early intervention help the unemployed youth?," Working Paper Series 2002:10, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  4. Thomas Andren & Daniela Andren, 2006. "Assessing the employment effects of vocational training using a one-factor model," Applied Economics, Taylor & Francis Journals, vol. 38(21), pages 2469-2486.
  5. Lindgren, Urban & Westerlund, Olle, 2003. "Labour market programmes and geographical mobility: migration and commuting among programme participants and openly unemployed," Working Paper Series 2003:6, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  6. Conny Wunsch, 2013. "Optimal Use of Labor Market Policies: The Role of Job Search Assistance," The Review of Economics and Statistics, MIT Press, vol. 95(3), pages 1030-1045, July.
  7. Betcherman, Gordon & Olivas, Karina & Dar, Amit, 2004. "Impacts of active labor market programs : new evidence from evaluations with particular attention to developing and transition countries," Social Protection Discussion Papers 29142, The World Bank.
  8. Bernd Fitzenberger & Olga Orlanski & Aderonke Osikominu & Marie Paul, 2013. "Déjà Vu? Short-term training in Germany 1980–1992 and 2000–2003," Empirical Economics, Springer, vol. 44(1), pages 289-328, February.
  9. Forslund, Anders & Johansson, Per & Lindqvist, Linus, 2004. "Employment subsidies - A fast lane from unemployment to work?," Working Paper Series 2004:18, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  10. Jespersen, Svend T. & Munch, Jakob R. & Skipper, Lars, 2008. "Costs and benefits of Danish active labour market programmes," Labour Economics, Elsevier, vol. 15(5), pages 859-884, October.
  11. Bucher, Anne, 2010. "Impacts of hiring subsidies targeted at the long-term unemployed on the low-skilled labor market: The French experience," Economic Modelling, Elsevier, vol. 27(2), pages 553-565, March.
  12. Tito Boeri, 2005. "An Activating Social Security System," De Economist, Springer, vol. 153(4), pages 375-397, December.

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