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Regional treatment intensity as an instrument for the evaluation of labour market policies

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  • Markus Frölich

    ()

  • Michael Lechner

    ()

Abstract

The effects of active labour market policies (ALMP) on individual employment chances and earnings are evaluated by nonparametric instrumental variables based on Swiss administrative data with detailed re-gional information. Using an exogenous variation in the participation probabilities across fairly autonomous regional units (cantons) generated by the federal government, we identify the effects of ALMP by comparing individuals living in the same local labour market but in different cantons. Taking account of small sample problems occurring in IV estimation, our results suggest that ALMP increases individual employment probabilities by about 15% in the short term for a weighted subpopulation of compliers.

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File URL: http://www1.vwa.unisg.ch/RePEc/usg/dp2004/dp08_froelich_ganz.pdf
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Bibliographic Info

Paper provided by Department of Economics, University of St. Gallen in its series University of St. Gallen Department of Economics working paper series 2004 with number 2004-08.

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Length: 67 pages
Date of creation: Aug 2004
Date of revision:
Handle: RePEc:usg:dp2004:2004-08

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Keywords: Local average treatment effect; active labour market policy; state borders; geographic variation; weak instruments; small sample problems of IV; Switzerland; Fuller estimator;

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Cited by:
  1. Beatrix Brügger & Rafael Lalive & Josef Zweimüller, 2009. "Does Culture Affect Unemployment? Evidence from the Röstigraben," CESifo Working Paper Series 2714, CESifo Group Munich.
  2. Graversen, Brian Krogh & Jensen, Peter, 2006. "A Reappraisal of the Virtues of Private Sector Employment Programmes," IZA Discussion Papers 2230, Institute for the Study of Labor (IZA).
  3. Paul Frijters & Robert Gregory, 2006. "From Golden Age to Golden Age: Australia's 'Great Leap Forward'?," The Economic Record, The Economic Society of Australia, vol. 82(257), pages 207-224, 06.
  4. Ammermüller, Andreas & Zwick, Thomas & Boockmann, Bernhard & Maier, Michael, 2007. "Do hiring subsidies reduce unemployment among the elderly? Evidence from two natural experiments," ZEW Discussion Papers 07-001, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

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