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Estimating the Threat Effect of Active Labour Market Programmes

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Author Info
Rosholm, Michael () (University of Aarhus and IZA Bonn)
Svarer, Michael (University of Aarhus)

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Abstract

We combine two techniques to consistently estimate the effect of active labour market programmes and, in particular, active labour market policy regimes. Our aim is to explicitly estimate the threat effect of active labour market programmes. Based on Danish data (1998- 2002) from administrative registers we find a strong and significantly positive threat effect. The threat effect is shown to reduce average unemployment duration by approximately three weeks. The implications of this result are discussed.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1300.

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Length: 40 pages
Date of creation: Sep 2004
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Handle: RePEc:iza:izadps:dp1300

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Related research
Keywords: active labour market policy; threat effect; timing-of-events; duration model;

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Find related papers by JEL classification:
C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Lalive, Rafael & van Ours, Jan C. & Zweimüller, Josef, 2002. "The Effect of Benefit Sanctions on the Duration of Unemployment," IZA Discussion Papers 469, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  2. Richardson, Katarina & van den Berg, Gerard J., 2002. "The effect of vocational employment training on the individual transition rate from unemployment to work," Working Paper Series 2002:8, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
  3. Rafael Lalive & Jan C. van Ours & Josef Zweimueller, . "The Impact of Active Labor Market Programs on the Duration of Unemployment," IEW - Working Papers iewwp041, Institute for Empirical Research in Economics - IEW. [Downloadable!]
  4. 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. [Downloadable!] (restricted)
    Other versions:
  5. Michael Rosholm & Michael Svarer & Bo Hammer, 2004. "A Danish Profiling System," Economics Working Papers 2004-13, School of Economics and Management, University of Aarhus. [Downloadable!]
    Other versions:
  6. 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 Labour Market Policy Evaluation. [Downloadable!]
    Other versions:
  7. Jensen, Peter & Rosholm, Michael & Svarer, Michael, 2003. "The response of youth unemployment to benefits, incentives, and sanctions," European Journal of Political Economy, Elsevier, vol. 19(2), pages 301-316, June. [Downloadable!] (restricted)
  8. Bonnal, Liliane & Fougere, Denis & Serandon, Anne, 1997. "Evaluating the Impact of French Employment Policies on Individual Labour Market Histories," Review of Economic Studies, Blackwell Publishing, vol. 64(4), pages 683-713, October. [Downloadable!] (restricted)
  9. van den Berg, Gerard J, 1990. "Nonstationarity in Job Search Theory," Review of Economic Studies, Blackwell Publishing, vol. 57(2), pages 255-77, April. [Downloadable!] (restricted)
  10. Gritz, R. Mark, 1993. "The impact of training on the frequency and duration of employment," Journal of Econometrics, Elsevier, vol. 57(1-3), pages 21-51. [Downloadable!] (restricted)
  11. Bolvig, Iben & Jensen, Peter & Rosholm, Michael, 2003. "The Employment Effects of Active Social Policy," IZA Discussion Papers 736, Institute for the Study of Labor (IZA). [Downloadable!]
  12. Gerard J. van den Berg & Bas van der Klaauw & Jan C. van Ours, 2004. "Punitive Sanctions and the Transition Rate from Welfare to Work," Journal of Labor Economics, University of Chicago Press, vol. 22(1), pages 211-210, January. [Downloadable!]
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  13. Narendranathan, Wiji, 1993. "Job Search in a Dynamic Environment--An Empirical Analysis," Oxford Economic Papers, Oxford University Press, vol. 45(1), pages 1-22, January. [Downloadable!] (restricted)
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  14. 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 Labour Market Policy Evaluation. [Downloadable!]
  15. Dan A. Black & Jeffrey A. Smith & Mark C. Berger & Brett J. Noel, 2003. "Is the Threat of Reemployment Services More Effective Than the Services Themselves? Evidence from Random Assignment in the UI System," American Economic Review, American Economic Association, vol. 93(4), pages 1313-1327, September. [Downloadable!]
  16. Rosholm, Michael & Skipper, Lars, 2003. "Is Labour Market Training a Curse for the Unemployed? Evidence from a Social Experiment," IZA Discussion Papers 716, Institute for the Study of Labor (IZA). [Downloadable!]
  17. Rosholm, Michael & Svarer, Michael, 2001. "Structurally dependent competing risks," Economics Letters, Elsevier, vol. 73(2), pages 169-173, November. [Downloadable!] (restricted)
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  18. Jaap H. Abbring & Gerard J. van den Berg, 2003. "The Nonparametric Identification of Treatment Effects in Duration Models," Econometrica, Econometric Society, vol. 71(5), pages 1491-1517, 09. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Michael Svarer, 2007. "The Effect of Sanctions on the Job Finding Rate: Evidence from Denmark," Economics Working Papers 2007-10, School of Economics and Management, University of Aarhus. [Downloadable!]
    Other versions:
  2. van den Berg, Gerard J. & Bergemann, Annette & Caliendo, Marco, 2008. "The Effect of Active Labor Market Programs on Not-Yet Treated Unemployed Individuals," IZA Discussion Papers 3825, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  3. Bolvig, Iben, 2008. "Low wage after unemployment - the effect of changes in the UI system," Working Papers 08-11, University of Aarhus, Aarhus School of Business, Department of Economics. [Downloadable!]
  4. Büttner, Thomas, 2007. "Ankündigungseffekt oder Maßnahmewirkung? : eine Evaluation von Trainingsmaßnahmen zur Überprüfung der Verfügbarkeit," IAB Discussion Paper 200725, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
  5. Torben M. Andersen & Michael Svarer, 2007. "Flexicurity – labour market performance in Denmark," Economics Working Papers 2007-09, School of Economics and Management, University of Aarhus. [Downloadable!]
    Other versions:
  6. Brian Krogh Graversen & Jan C. van Ours, 2006. "How to Help Unemployed Find Jobs Quickly: Experimental Evidence from a Mandatory Activation Program," IZA Discussion Papers 2504, Institute for the Study of Labor (IZA). [Downloadable!]
  7. Ott Toomet, 2008. "Threat Effect Of The Labour Market Programs In Denmark: Evidence From A Quasi-Experiment," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 62, Faculty of Economics and Business Administration, University of Tartu (Estonia). [Downloadable!]
  8. Krogh Graversen, Brian & van Ours, Jan C, 2007. "How to Help Unemployed Find Jobs Quickly; Experimental Evidence from a Mandatory Activation Program," CEPR Discussion Papers 6057, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  9. Michael Rosholm & Jonas Staghøj & Michael Svarer, 2007. "A Statistical Programme Assignment Model," Economics Working Papers 2007-16, School of Economics and Management, University of Aarhus. [Downloadable!]
    Other versions:
  10. Clausen, Jens & Heinesen, Eskil & Hummelgaard, Hans & Husted, Leif & Rosholm, Michael, 2008. "The Effect of Integration Policies on the Time until Regular Employment of Newly Arrived Immigrants: Evidence from Denmark," IZA Discussion Papers 3849, Institute for the Study of Labor (IZA). [Downloadable!]
  11. Rosholm, Michael, 2008. "Experimental Evidence on the Nature of the Danish Employment Miracle," IZA Discussion Papers 3620, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  12. Jochen Kluve, 2006. "The Effectiveness of European Active Labor Market Policy," IZA Discussion Papers 2018, Institute for the Study of Labor (IZA). [Downloadable!]
  13. Anna Piil Damm, 2005. "Determinants of Recent Immigrants’ Location Choices: Quasi-Experimental Evidence," CAM Working Papers 2005-17, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics. [Downloadable!]
    Other versions:
  14. Mette Ejrnaes & Stefan Hochguertel, 2008. "Entrepreneurial Moral Hazard in Income Insurance," Tinbergen Institute Discussion Papers 08-065/3, Tinbergen Institute. [Downloadable!]
  15. Mette Ejrnæs & Gabriel Stefan Hochguertel, 2008. "Entrepreneurial Moral Hazard in Income Insurance: Empirical Evidence from a Large Administrative Sample," CAM Working Papers 2008-02, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics. [Downloadable!]
  16. Bocean, Claudiu George, 2007. "The Impact of Active Labour Market Policies in Romania," MPRA Paper 10397, University Library of Munich, Germany. [Downloadable!]
  17. Graversen, Brian Krogh & Ours, Jan C. van, 2006. "How to help unemployed find jobs quickly ; experimental evidence from a mandatory activation program," Discussion Paper 126, Tilburg University, Center for Economic Research. [Downloadable!]
  18. Lars Calmfors & Giancarlo Corsetti & Michael P. Devereux & Seppo Honkapohja & Gilles Saint-Paul & Hans-Werner Sinn & Jan-Egbert Sturm & Xavier Vives, 2007. "Chapter 4: Scandinavia today: An economic miracle?," EEAG Report on the European Economy, CESifo Group Munich, vol. 0, pages 82-120, 02. [Downloadable!]
  19. Hägglund, Pathric, 2007. "Are there pre-programme effects of Swedish active labour market policies? Evidence from three randomised experiments," Working Paper Series 2/2007, Swedish Institute for Social Research. [Downloadable!]
  20. Waller, Marie, 2008. "Further training for the unemployed : what can we learn about dropouts from administrative data?," FDZ Methodenreport 200804_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
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