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Does subsidised temporary employment get the unemployed back to work? An econometric analysis of two different schemes

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Author Info
Michael Gerfin ()
Michael Lechner ()
Heidi Steiger ()

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Abstract

Subsidised employment is an important tool of active labour market policies to improve the chances of the unemployed to find permanent employment. Using informative individual administrative data we investigate the effects of two different schemes of subsidised temporary employment implemented in Switzerland. One scheme operates as a non-profit employment programme (EP), whereas the other one is a subsidy for temporary jobs (TEMP) in firms operating in competitive markets. Using econometric matching methods we find that TEMP is considerably more successful in getting the unemployed back into work than EP. We also find that compared to nonparticipation both programmes are ineffective for unemployed who find job easily anyway as well as for those with short unemployment duration. For unemployed with potentially long unemployment duration and for actual long term unemployed, both programmes may have positive effects, but the effect of TEMP is much larger.

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Publisher Info
Paper provided by Department of Economics, University of St. Gallen in its series University of St. Gallen Department of Economics working paper series 2002 with number 2002-22.

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Length: 50 pages
Date of creation: Oct 2002
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Handle: RePEc:usg:dp2002:2002-22

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Related research
Keywords: Subsidised temporary job; employment programme; temporary work contracts; active labour market policies; matching on the propensity score; Switzerland;

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Find related papers by JEL classification:
J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
J68 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Public Policy

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Michael Lechner, 2005. "Some practical issues in the evaluation of heterogeneous labour market programmes by matching methods," Labor and Demography 0505006, EconWPA. [Downloadable!]
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  2. Rafael Lalive & Jan C. van Ours & Josef Zweimueller, . "The Impact of Active Labor Market Programs on the Duration of Unemployment," IEW - Working Papers iewwp041, Institute for Empirical Research in Economics - IEW. [Downloadable!]
  3. Michael Gerfin & Michael Lechner, 2002. "A Microeconometric Evaluation of the Active Labour Market Policy in Switzerland," Economic Journal, Royal Economic Society, vol. 112(482), pages 854-893, October. [Downloadable!] (restricted)
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  4. Carling, Kenneth & Richardson, Katarina, 2001. "The relative efficiency of labor market programs: Swedish experience from the 1990's," Working Paper Series 2001:2, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
  5. Gary Burtless, 1985. "Are targeted wage subsidies harmful? Evidence from a wage voucher experiment," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 39(1), pages 105-114, October.
  6. Michael Lechner, 2000. "Programme Heterogeneity and Propensity Score Matching: An Application to the Evaluation of Active Labour Market Policies," Econometric Society World Congress 2000 Contributed Papers 0647, Econometric Society. [Downloadable!]
  7. Albert Ma, C.T. & Weiss, A.M., 1991. "A Signaling Theory of Unemployment," Papers 7, Boston University - Department of Economics.
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  8. Geweke, John & Keane, Michael P & Runkle, David, 1994. "Alternative Computational Approaches to Inference in the Multinomial Probit Model," The Review of Economics and Statistics, MIT Press, vol. 76(4), pages 609-32, November. [Downloadable!] (restricted)
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  9. Lawrence F. Katz, 1996. "Wage Subsidies for the Disadvantaged," NBER Working Papers 5679, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. Brian Bell & Richard Blundell & John Van Reenen, 1999. "Getting the unemployed back to work: the role of targeted wage subsidies," IFS Working Papers W99/12, Institute for Fiscal Studies. [Downloadable!]
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  11. Michael Lechner, 1999. "Identification and Estimation of Causal Effects of Multiple Treatments Under the Conditional Independence Assumption," IZA Discussion Papers 91, Institute for the Study of Labor (IZA). [Downloadable!]
  12. Borsch-Supan, Axel & Hajivassiliou, Vassilis A., 1993. "Smooth unbiased multivariate probability simulators for maximum likelihood estimation of limited dependent variable models," Journal of Econometrics, Elsevier, vol. 58(3), pages 347-368, August. [Downloadable!] (restricted)
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