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The Impact of Active Labor Market Programs and Benefit Entitlement Rules on the Duration of Unemployment

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Author Info

  • Lalive, Rafael

    () (University of Lausanne)

  • van Ours, Jan C.

    () (Tilburg University)

  • Zweimüller, Josef

    () (University of Zurich)

Abstract

Swiss policy makers created a unique link between unemployment benefits and Active Labor Market Programs (ALMPs) by making benefit payments conditional on program attendance after 7 months of unemployment duration. We evaluate the effect of Active Labor Market Programs and benefit entitlement on the duration of unemployment in Switzerland. In the evaluation we allow for selectivity affecting the inflow into programs. Our results indicate that (i) After ALMP-participation the transition rate to jobs increases for Swiss women but not for Swiss men. However, the job hazard rate is strongly reduced during participation. Taken together, this leads to the conclusion that programs prolong unemployment duration for men, but tend to shorten durations for women. (ii) Once the unemployment spell approaches the expiration of unconditional benefit entitlement the job-hazard rate increases strongly, both for women and for men. (iii) There are important selectivity effects for Swiss females, but not for Swiss males.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 149.

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Length: 57 pages
Date of creation: May 2000
Date of revision:
Publication status: published in: Economic Journal, 2008, 118 (525), 235–257
Handle: RePEc:iza:izadps:dp149

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Related research

Keywords: bivariate duration model; Active labor market policy; benefit entitlement; treatment effect;

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  1. Berg, Gerard J. van den & Holm, Anders & Ours, Jan C. van, 1999. "Does work experience help to become a medical specialist?," Serie Research Memoranda 0017, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  2. 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).
  3. 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.
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