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Workfare for the old and long-term unemployed

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  • Bennmarker, Helge
  • Skans, Oskar Nordström
  • Vikman, Ulrika

Abstract

We estimate the effects of conditioning benefits on program participation among older long-term unemployed workers. We exploit a Swedish reform which reduced UI duration from 90 to 60weeks for a group of older unemployed workers in a setting where workers who exhausted their benefits received unchanged transfers if they agreed to participate in a work practice program. Our results show that job finding increased as a result of the shorter duration of passive benefits. The time profile of the job-finding effects suggests that the results are due to deterrence during the program-entry phase. We find no impact on ensuing job durations or wages, suggesting that the increased job-finding rate was driven by increased search intensity rather than lower reservation wages. A crude cost–benefit analysis suggests that the reform reduced the combined cost of programs and transfers.

Suggested Citation

  • Bennmarker, Helge & Skans, Oskar Nordström & Vikman, Ulrika, 2013. "Workfare for the old and long-term unemployed," Labour Economics, Elsevier, vol. 25(C), pages 25-34.
    • Handle: RePEc:eee:labeco:v:25:y:2013:i:c:p:25-34
    DOI: 10.1016/j.labeco.2013.04.008
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    Cited by:

    1. Pierre Koning & Max Raterink, 2013. "Re-employment Rates of Older Unemployed Workers: Decomposing the Effect of Birth Cohorts and Policy Changes," De Economist, Springer, vol. 161(3), pages 331-348, September.
    2. Bernhard Boockmann & Tobias Brändle, 2015. "Coaching, Counseling, Case-Working: Do They Help the Older Unemployed out of Benefit Receipt and back into the Labor Market?," IAW Discussion Papers 115, Institut für Angewandte Wirtschaftsforschung (IAW).
    3. Anne Sonnet & Hilde Olsen & Thomas Manfredi, 2014. "Towards More Inclusive Ageing and Employment Policies: The Lessons from France, The Netherlands, Norway and Switzerland," De Economist, Springer, vol. 162(4), pages 315-339, December.
    4. Anders Gustafsson & Andreas Stephan & Alice Hallman & Nils Karlsson, 2016. "The “sugar rush” from innovation subsidies: a robust political economy perspective," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 43(4), pages 729-756, November.
    5. Barth, Erling & Moene, Karl O. & Willumsen, Fredrik, 2015. "Reprint of "The Scandinavian model—An interpretation"," Journal of Public Economics, Elsevier, vol. 127(C), pages 17-29.
    6. Lukas Fervers, 2016. "Fast track to the labour market or highway to hell? The effect of activation policies on quantity and quality of labour market integration," IAW Discussion Papers 125, Institut für Angewandte Wirtschaftsforschung (IAW).
    7. Barth, Erling & Moene, Karl O. & Willumsen, Fredrik, 2014. "The Scandinavian model—An interpretation," Journal of Public Economics, Elsevier, vol. 117(C), pages 60-72.

    More about this item

    Keywords

    Activation; Program evaluation; UI; Duration;

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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