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Incentive-based active labor market programs: Insights from policy experimentation in Italy

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  • Zanella, Giulio
  • Salomone, Riccardo

Abstract

Two programs providing financial incentives for reemployment of workers at risk of long-term unemployment are evaluated vis-à-vis intensive job-search assistance through policy experimentation involving about 10,000 job seekers in Italy: (i) a reemployment voucher that incentivizes specialized providers; (ii) a reemployment bonus that incentivizes job seekers directly. Results indicate that: the voucher is effective for men while the bonus works for women; each policy is no less effective than job-search assistance, but only the voucher is clearly cost effective; there are no side effects on post-treatment earnings or job duration. A one-sided job search model with endogenous search effort rationalizes these empirical findings.

Suggested Citation

  • Zanella, Giulio & Salomone, Riccardo, 2025. "Incentive-based active labor market programs: Insights from policy experimentation in Italy," Labour Economics, Elsevier, vol. 93(C).
    • Handle: RePEc:eee:labeco:v:93:y:2025:i:c:s0927537125000144
    DOI: 10.1016/j.labeco.2025.102687
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    More about this item

    Keywords

    Reemployment voucher; Reemployment bonus; Job search assistance; Active labor market policy;
    All these keywords.

    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

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