The Relationship between Active Labor Market Programs and Employability of the Long‐Term Unemployed

It can be difficult to document whether active labor market programs are effective for the long‐term unemployed because their transitions to employment are rare. This study examines whether eight measures of employability are useful intermediate outcome measures for the long‐term unemployed. We use a repeated survey linked to administrative register data and estimate three‐way fixed‐effect models. The results show that self‐reported health is a useful outcome measure for the given population of long‐term unemployed in the following sense: Only this measure both predicts subsequent employment and is positively associated with prior participation in an active labor market program compared with non‐participation.