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Is there a Threat Effect of Labour Market Programmes? A Study of ALMP in the Danish UI System

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  • Lars Pico Geerdsen

Abstract

This article focuses on unemployed individuals' reaction to compulsory labour market programmes prior to participation. In Denmark, after having received UI benefits for a given period of time, continued benefits are made conditional on participation in a labour market programme. I estimate individuals' reaction to compulsory programmes using legislative changes in the duration of benefits period as identification. I find that compulsory programmes do indeed motivate individuals to find employment prior to participation. The effect is large and is even comparable in size to the effect of benefits exhaustion found in studies of American UI systems. Copyright 2006 The Author. Journal compilation Royal Economic Society 2006.

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  • Lars Pico Geerdsen, 2006. "Is there a Threat Effect of Labour Market Programmes? A Study of ALMP in the Danish UI System," Economic Journal, Royal Economic Society, vol. 116(513), pages 738-750, July.
  • Handle: RePEc:ecj:econjl:v:116:y:2006:i:513:p:738-750
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