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Active Labor Market Policies in Poland: Human Capital Enhancement, Stigmatization, or Benefit Churning?

  • Kluve, Jochen
  • Lehmann, Hartmut
  • Schmidt, Christoph M.

This paper provides micro-econometric evidence on the effectiveness of Active Labor Market Policies (ALMP) in Poland. We sketch the theoretical framework of matching estimators as a substitute for randomization in labor market programs. Using retrospective data from the 18th wave of the Polish Labor Force Survey we implement a conditional difference-in-differences matching estimator of treatment effects. Treatment and control groups are matched over individual observable characteristics and pre-treatment labor market histories to minimize bias from unobserved heterogeneity. We also require that observations on controls are from the same regional labor market and from an identical phase of the transition cycle. Considering as the outcome a multinomial variable of labor market status, our first important finding suggests that training of men and women has a positive effect on the employment probability. For men public works and intervention works have negative treatment effects, while participation in intervention works does not affect women's employment probabilities. We attribute the negative treatment effects for men to benefit churning rather than to stigmatization of intervention and public works participants

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Article provided by Elsevier in its journal Journal of Comparative Economics.

Volume (Year): 27 (1999)
Issue (Month): 1 (March)
Pages: 61-89

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Handle: RePEc:eee:jcecon:v:27:y:1999:i:1:p:61-89
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622864

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  1. Marek Gora and Christoph M. Schmidt & Marek Gora and Christoph M. Schmidt, 1997. "Long-Term Unemployment, Unemployment Benefits and Social Assistance: The Polish Experience," William Davidson Institute Working Papers Series 110, William Davidson Institute at the University of Michigan.
  2. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Wiley Blackwell, vol. 65(2), pages 261-94, April.
  3. Joshua D. Angrist, 1998. "Estimating the Labor Market Impact of Voluntary Military Service Using Social Security Data on Military Applicants," Econometrica, Econometric Society, vol. 66(2), pages 249-288, March.
  4. 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.
  5. Card, David & Sullivan, Daniel G, 1988. "Measuring the Effect of Subsidized Training Programs on Movements in and out of Employment," Econometrica, Econometric Society, vol. 56(3), pages 497-530, May.
  6. Puhani, Patrick A, 1998. "Advantage Through Training? A Microeconometric Evaluation of the Employment Effects of Active Labour Market Programmes in Poland," CEPR Discussion Papers 2000, C.E.P.R. Discussion Papers.
  7. James J. Heckman, 1995. "Randomization as an Instrumental Variable," NBER Technical Working Papers 0184, National Bureau of Economic Research, Inc.
  8. Heckman, James J & Ichimura, Hidehiko & Todd, Petra E, 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 605-54, October.
  9. Tito Boeri, 1994. ""Transitional" unemployment," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 2(1), pages 1-25, 03.
  10. Lechner, Michael, 1999. "Earnings and Employment Effects of Continuous Off-the-Job Training in East Germany after Unification," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(1), pages 74-90, January.
  11. Heckman, James J, 1996. "Randomization as an Instrumental Variable: Notes," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 336-41, May.
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