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Active Labor Market Policies in Poland: Human Capital Enhancement, Stigmatization or Benefit Churning

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Author Info

  • Kluve, Jochen

    ()
    (Humboldt University Berlin, RWI)

  • Lehmann, Hartmut

    ()
    (University of Bologna)

  • Schmidt, Christoph M.

    ()
    (RWI)

Abstract

This paper provides micro-econometric evidence on the effectiveness of Active Labor Market Policies (ALMP) in Poland. We sketch the theoretical framework of matching estimators as a substitute for randomization in labor market programs. Using retrospective data from the 18th wave of the Polish Labor Force Survey we implement a conditional difference-in-differences matching estimator of treatment effects. Treatment and control groups are matched over individual observable characteristics and pre-treatment labor market histories to minimize bias from unobserved heterogeneity. We also require that observations on controls are from the same regional labor market and from an identical phase of the transition cycle. Considering as the outcome a multinomial variable of labor market status, our first important finding suggests that training of men and women has a positive effect on the employment probability. For men public works and intervention works have negative treatment effects, while participation in intervention works does not affect women’s employment probabilities. We attribute the negative treatment effects for men to benefit churning rather than to stigmatization of intervention and public works participants.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 30.

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Length: 53 pages
Date of creation: Jan 1999
Date of revision:
Publication status: published in: Journal of Comparative Economics, 1999, 27 (1), 61-89; see IZA Reprints 20/99
Handle: RePEc:iza:izadps:dp30

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Related research

Keywords: transition cycle; treatment effects; employment probabilities; difference-in-difference matching estimator; labor markets policies;

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References

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  1. Tito Boeri, 1994. ""Transitional" unemployment," The Economics of Transition, The European Bank for Reconstruction and Development, The European Bank for Reconstruction and Development, vol. 2(1), pages 1-25, 03.
  2. Marek Gora and Christoph M. Schmidt & Marek Gora and Christoph M. Schmidt, 1997. "Long-Term Unemployment, Unemployment Benefits and Social Assistance: The Polish Experience," William Davidson Institute Working Papers Series 110, William Davidson Institute at the University of Michigan.
  3. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 65(2), pages 261-94, April.
  4. James J. Heckman, 1995. "Randomization as an Instrumental Variable," NBER Technical Working Papers, National Bureau of Economic Research, Inc 0184, National Bureau of Economic Research, Inc.
  5. Puhani, Patrick A, 1998. "Advantage Through Training? A Microeconometric Evaluation of the Employment Effects of Active Labour Market Programmes in Poland," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2000, C.E.P.R. Discussion Papers.
  6. Heckman, James J, 1996. "Randomization as an Instrumental Variable: Notes," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 336-41, May.
  7. Joshua D. Angrist, 1995. "Estimating the Labor Market Impact of Voluntary Military Service Using Social Security Data on Military Applicants," NBER Working Papers 5192, National Bureau of Economic Research, Inc.
  8. Card, David & Sullivan, Daniel G, 1988. "Measuring the Effect of Subsidized Training Programs on Movements in and out of Employment," Econometrica, Econometric Society, Econometric Society, vol. 56(3), pages 497-530, May.
  9. 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, American Statistical Association, vol. 17(1), pages 74-90, January.
  10. 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, Wiley Blackwell, vol. 64(4), pages 605-54, October.
  11. Patrick Puhani & Viktor Steiner, 1997. "The Effectiveness and Efficiency of Active Labour Market Policies in Poland," Empirica, Springer, Springer, vol. 24(3), pages 209-231, October.
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