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An Impact Analysis of Labor Market Programs in Hungary

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  • Christopher J. O'Leary

    ()
    (W.E. Upjohn Institute for Employment Research)

Abstract

This paper presents estimates of the impact of retraining and public service employment (PSE) on reemployment and earnings in the Republic of Hungary during the early phase of post-Socialist economic restructuring. Since assignment to programs resulted in groups with vastly dissimilar characteristics, impact estimates were computed using a variety of methods. Controlling for observable characteristics, retraining may have slightly improved the chances for reemployment in a non-subsidized job, but the gain in reemployment was probably not sufficient to justify the cost of retraining. However, since the durability of jobs appears to be better for those who were retrained, the long term earnings impacts may be significant. Net societal benefits from retraining could be improved by targeting services to more males, older persons, those with fewer years of formal education, and those with no non-manual specialization. PSE was a successful strategy to keep people out of unemployment, but it did not appear to be a cost effective means of getting people reemployed in non-subsidized jobs. PSE is probably best viewed as an income transfer program that has the side effect of preventing deterioration of basic work habits. In terms of reemployment, the net societal impact of PSE could be improved if it involved more older persons and females.

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Bibliographic Info

Paper provided by W.E. Upjohn Institute for Employment Research in its series Upjohn Working Papers and Journal Articles with number 95-30.

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Date of creation: 1995
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Handle: RePEc:upj:weupjo:95-30

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Keywords: labor; market; programs; Hungary; O'Leary;

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References

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  1. Thomas Fraker & Rebecca Maynard, 1987. "The Adequacy of Comparison Group Designs for Evaluations of Employment-Related Programs," Journal of Human Resources, University of Wisconsin Press, vol. 22(2), pages 194-227.
  2. James J. Heckman, 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 475-492 National Bureau of Economic Research, Inc.
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Cited by:
  1. Núria Rodríguez-Planas, 2007. "What Works Best For Getting the Unemployed Back to Work: Employment Services or Small-Business Assistance Programs? Evidence from Romania," UFAE and IAE Working Papers 712.07, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  2. Núria Rodríguez-Planas & Jacob Benus, 2007. "Evaluating Active Labor Markets in Romania," UFAE and IAE Working Papers 699.07, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  3. Patrick Puhani & Viktor Steiner, 1997. "The Effectiveness and Efficiency of Active Labour Market Policies in Poland," Empirica, Springer, vol. 24(3), pages 209-231, October.
  4. Nuria Rodriguez-Planas† & Jacob Benus, 2007. "Evaluative Active Labor Market Programmes in Romania," Working Papers 2007-31, FEDEA.
  5. Dar, Amit & Gill, Indermit S, 1998. "Evaluating Retraining Programs in OECD Countries: Lessons Learned," World Bank Research Observer, World Bank Group, vol. 13(1), pages 79-101, February.

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