Job-search Incentives From Labour Market Programs - an Empirical Analysis
AbstractIn this paper we examine whether the prospect of compulsory programme participation motivates individuals to leave the unemployment insurance (UI) system prior to participation. We analyze data from the Danish labour market. Here a series of reforms have enforced program participation and gradually restricted the duration of unemployment before individuals must enroll into programmes. However, there is substantial heterogeneity in enrollment probabilities. If individuals want to avoid participation and observe the heterogeneity in participation, this will also affect their search behaviour. We estimate a model for anticipatory effects of participation, allowing for heterogeneity, on search behaviour and find large significant effects from anticipation of enrollment on the exit probability out of unemployment.
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Bibliographic InfoPaper provided by University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics in its series CAM Working Papers with number 2004-03.
Length: 25 pages
Date of creation: Mar 2004
Date of revision:
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active labour market measures; hazard rates; unobserved heterogeneity;
Find related papers by JEL classification:
- C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
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- 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.
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