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Estimating the Threat Effect of Active Labour Market Programmes

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  • Michael Rosholm

    (Department of Economics, University of Aarhus)

  • Michael Svarer

    (Department of Economics, University of Aarhus)

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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File URL: http://www.econ.ku.dk/cam/wp0910/wp0203/2004-14.pdf/
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Bibliographic Info

Paper provided by University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics in its series CAM Working Papers with number 2004-14.

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Length: 35 pages
Date of creation: Aug 2004
Date of revision:
Handle: RePEc:kud:kuieca:2004_14

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Web page: http://www.econ.ku.dk/CAM/
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Keywords: active labour market policy; threat effect; timing-of-events; duration model;

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References

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  1. Lillard, Lee A., 1993. "Simultaneous equations for hazards : Marriage duration and fertility timing," Journal of Econometrics, Elsevier, Elsevier, vol. 56(1-2), pages 189-217, March.
  2. Lalive, R. & Ours, J.C. van & Zweimüller, J., 2002. "The Effect of Benefit Sanctions on the Duration of Unemployment," Discussion Paper, Tilburg University, Center for Economic Research 2002-19, Tilburg University, Center for Economic Research.
  3. Michael Rosholm & Michael Svarer & Bo Hammer, 2004. "A Danish Profiling System," CAM Working Papers, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics 2004-22, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
  4. Rafael Lalive & Jan C. van Ours & Josef Zweimueller, . "The Impact of Active Labor Market Programs on the Duration of Unemployment," IEW - Working Papers, Institute for Empirical Research in Economics - University of Zurich 041, Institute for Empirical Research in Economics - University of Zurich.
  5. Bonnal, Liliane & Fougere, Denis & Serandon, Anne, 1997. "Evaluating the Impact of French Employment Policies on Individual Labour Market Histories," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 64(4), pages 683-713, October.
  6. Jensen, Peter & Rosholm, Michael & Svarer, Michael, 2003. "The response of youth unemployment to benefits, incentives, and sanctions," European Journal of Political Economy, Elsevier, Elsevier, vol. 19(2), pages 301-316, June.
  7. 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, University of Chicago Press, vol. 22(1), pages 211-241, January.
  8. 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).
  9. Michael Gerfin & Michael Lechner, 2002. "A Microeconometric Evaluation of the Active Labour Market Policy in Switzerland," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 112(482), pages 854-893, October.
  10. Rosholm, Michael & Svarer, Michael, 2001. "Structurally Dependent Competing Risks," IZA Discussion Papers 265, Institute for the Study of Labor (IZA).
  11. 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, IFAU - Institute for Evaluation of Labour Market and Education Policy 2002:8, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  12. Berg, G.J. van den, 1987. "Nonstationarity in job search theory," Research Memorandum, Tilburg University, Faculty of Economics and Business Administration 242, Tilburg University, Faculty of Economics and Business Administration.
  13. 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).
  14. Calmfors, Lars & Forslund, Anders & Hemström, Maria, 2002. "Does Active Labour Market Policy Work? Lessons from the Swedish Experiences," Seminar Papers, Stockholm University, Institute for International Economic Studies 700, Stockholm University, Institute for International Economic Studies.
  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, American Economic Association, vol. 93(4), pages 1313-1327, September.
  16. 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.
  17. Jaap H. Abbring & Gerard J. van den Berg, 2003. "The Nonparametric Identification of Treatment Effects in Duration Models," Econometrica, Econometric Society, Econometric Society, vol. 71(5), pages 1491-1517, 09.
  18. Gritz, R. Mark, 1993. "The impact of training on the frequency and duration of employment," Journal of Econometrics, Elsevier, Elsevier, vol. 57(1-3), pages 21-51.
  19. 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, IFAU - Institute for Evaluation of Labour Market and Education Policy 2001:14, IFAU - Institute for Evaluation of Labour Market and Education Policy.
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