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Swedish active labour market programmes in the 1990s: overall effectiveness and differential performance

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  • Barbara Sianesi

    ()
    (Institute for Fiscal Studies)

Abstract

The Ñ“wedish model' of active labour market programmes is investigated in relation to some crucial institutional features with two aims: examining how successful it has been in the context of the high unemployment atypically experienced by Sweden in the 1990s and trying to derive some general lessons as to which type of programme works best. The effectiveness of the programmes in improving the labour market prospects of unemployed participants is assessed in terms of their impact on individual employment probability and collection of unemployment benefits over time. The evidence as to the overall effectiveness of the programmes is rather mixed, with individuals joining a programme subsequently enjoying higher employment rates but also a higher probability of drawing unemployment benefits over time than if they had searched longer in open unemployment. The renewed eligibility to unemployment compensation following participation in a programme appears to be a most critical driving force behind these results. In fact, when comparing the programme effects for individuals entitled to unemployment benefits to the programme effects for non-entitled individuals, the positive effect on participants' employment prospects disappears, being instead replaced by a much higher probability of benefit collection. Still, the various programmes may have differential effects, making it interesting to quantify the relative performance of the six main types of Swedish programmes that were available to adult unemployed workers en Titled to unemployment benefits in the 1990s: labour market training, workplace introduction, work experience placement, relief work, trainee replacement and employment subsidies. The best performer is by far employment subsidies, followed by trainee replacement. The main finding that those programmes most similar to regular employment rank unambiguously highest has however to be appraised in the light of the macroeconomic literature, which has documented large and negative displacement and dead-weight effects exactly for these types of programme.

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Bibliographic Info

Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W02/03.

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Length: 48 pp
Date of creation: Feb 2002
Date of revision:
Handle: RePEc:ifs:ifsewp:02/03

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References

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  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. Carl Davidson & Stephen A. Woodbury, . "Optimal Unemployment Insurance," Upjohn Working Papers and Journal Articles cdsaw1997, W.E. Upjohn Institute for Employment Research.
  3. 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.
  4. 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).
  5. Larsson, L., 2000. "Evaluation of Swedish Youth Labour Market Programmes," Papers 2000:6, Uppsala - Working Paper Series.
  6. 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.
  7. 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.
  8. 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.
  9. 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.
  10. 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.
  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, vol. 64(4), pages 605-54, October.
  12. 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.
  13. 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.
  14. 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.
  15. Carling, Kenneth & Edin, Per-Anders & Holmlund, Bertil & Jansson, Fredrik, 1995. "Unemployment Duration, Unemployment Benefits, and Labour Market Programmes in Sweden," CEPR Discussion Papers 1200, C.E.P.R. Discussion Papers.
  16. 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.
  17. Larsson, Laura, 2000. "Evaluation of Swedish Youth Labour Market Programmes," Working Paper Series 2000:6, Uppsala University, Department of Economics.
  18. 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.
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Cited by:
  1. Silvia Loriga & Paolo Naticchioni, 2010. "Short and long term evaluations of Public Employment Services in Italy," Working Papers - Dipartimento di Economia 10-DEISFOL, Dipartimento di Economia, Sapienza University of Rome, revised 2010.
  2. Ianchovichina, Elena & Estache, Antonio & Foucart, Renaud & Garsous, Grégoire & Yepes, Tito, 2013. "Job Creation through Infrastructure Investment in the Middle East and North Africa," World Development, Elsevier, vol. 45(C), pages 209-222.
  3. Anders Forslund & Alan Krueger, 2010. "Did Active Labor Market Policies Help Sweden Rebound from the Depression of the Early 1990s?," NBER Chapters, in: Reforming the Welfare State: Recovery and Beyond in Sweden, pages 159-187 National Bureau of Economic Research, Inc.
  4. Attanasio, Orazio & Kugler, Adriana & Meghir, Costas, 2009. "Subsidizing Vocational Training for Disadvantaged Youth in Developing Countries: Evidence from a Randomized Trial," IZA Discussion Papers 4251, Institute for the Study of Labor (IZA).

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