The Impact of Active Labour Market Policy on Post-Unemployment Outcomes: Evidence from a Social Experiment in Denmark
AbstractWhile job search theory predicts that active labour market policies (ALMPs) can affect post-unemployment outcomes, empirical evaluations investigating transition rates have mostly focused on the impact of ALMPs on exit rates from the current unemployment spell. We use a social experiment, which was conducted in Denmark in 2005-6, to investigate the effects of a dramatic intensification of ALMPs on reemployment stability. We investigate the nature of this impact. We estimate a duration model with lagged duration dependence to separately identify "indirect" (via shorter unemployment duration) and "direct" (through a more efficient matching process) effects of ALMPs on subsequent employment duration. We find that overall intensive activation significantly reduces unemployment recurrence for men, but not for women. When we control for dynamic selection into employment and lagged duration dependence, the positive impact of the treatment becomes smaller but remains significant. 80% of the global impact of intensification acts through the direct channel for men.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5631.
Length: 37 pages
Date of creation: Apr 2011
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Other versions of this item:
- Blasco, Sylvie & Rosholm, Michael, 2011. "The Impact of Active Labour Market Policy on Post-Unemployment Outcomes: Evidence from a Social Experiment in Denmark," Working Papers 11-6, University of Aarhus, Aarhus School of Business, Department of Economics.
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
- J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-04-23 (All new papers)
- NEP-EUR-2011-04-23 (Microeconomic European Issues)
- NEP-LAB-2011-04-23 (Labour Economics)
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- Vikström, Johan & Rosholm, Michael & Svarer, Michael, 2013. "The effectiveness of active labor market policies: Evidence from a social experiment using non-parametric bounds," Labour Economics, Elsevier, vol. 24(C), pages 58-67.
- Kenneth L. Sørensen, 2012. "Effects of Intensifying Labor Market Programs on Post-Unemployment Wages: Evidence From a Controlled Experiment," Economics Working Papers 2012-20, School of Economics and Management, University of Aarhus.
- Blasco, Sylvie & Pertold-Gebicka, Barbara, 2012.
"Employment Policies, Hiring Practices and Firm Performance,"
IZA Discussion Papers
7013, Institute for the Study of Labor (IZA).
- Blasco, Sylvie & Pertold-Gebicka, Barbara, 2013. "Employment policies, hiring practices and firm performance," Labour Economics, Elsevier, vol. 25(C), pages 12-24.
- Sylvie Blasco & Barbara Pertold-Gebicka, 2012. "Employment Policies, Hiring Practices and Firm Performance," Working Papers 2012-27, Centre de Recherche en Economie et Statistique.
- Maibom Pedersen, Jonas & Rosholm, Michael & Svarer, Michael, 2012.
"Experimental Evidence on the Effects of Early Meetings and Activation,"
IZA Discussion Papers
6970, Institute for the Study of Labor (IZA).
- Jonas Maibom Pedersen & Michael Rosholm & Michael Svarer, 2012. "Experimental Evidence on the Effects of Early Meetings and Activation," Economics Working Papers 2012-26, School of Economics and Management, University of Aarhus.
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