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Heterogeneous impacts on earnings from an early effort in labor market programs

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  • Sørensen, Kenneth Lykke

Abstract

We study whether a labor market program, previously shown to lower unemployment duration, affects job quality. The empirical analysis is based on a randomized controlled trial, conducted in two different counties. We find no effects on women but positive effects for men. In one county, the program increased men's earnings in the short term by 9%, possibly by taxing leisure. In the second county, earnings also increased in the longer run, by about 9%, possibly because of a removal of labor market frictions. The positive effects of the program are heterogeneous, with taxing of leisure time primarily affecting low income earners while removing labor market frictions affecting high income earners.

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  • Sørensen, Kenneth Lykke, 2016. "Heterogeneous impacts on earnings from an early effort in labor market programs," Labour Economics, Elsevier, vol. 41(C), pages 266-279.
    • Handle: RePEc:eee:labeco:v:41:y:2016:i:c:p:266-279
    DOI: 10.1016/j.labeco.2016.05.005
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    1. Sørensen, Kenneth Lykke, 2016. "Heterogeneous impacts on earnings from an early effort in labor market programs," Labour Economics, Elsevier, vol. 41(C), pages 266-279.
    2. Kennethh Lykke Sørensen, 2015. "Active Labor Market Programs and Reservation Wages: Its a Hazard," Economics Working Papers 2015-27, Department of Economics and Business Economics, Aarhus University.

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    More about this item

    Keywords

    Active labor market programs; Randomized controlled trial; Quantile treatment effects; Earnings; Taxing leisure time; Removing labor market frictions;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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