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Estimating the macroeconomic effects of active labour market policies using spatial econometric methods

Author

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  • Reinhard Hujer
  • Paulo J.M. Rodrigues
  • Katja Wolf

Abstract

Purpose - The paper aims to present an analysis of the indirect and direct effects of active labour market policy measures at the regional level for Western Germany. Design/methodology/approach - Most evaluation studies of active labour market policy focus on the microeconometric treatment effect using individual data and do not account for possible indirect effects like deadweight and substitution effects. The present study uses a dynamic specification of the augmented matching function at the regional level. A dynamic panel data model is estimated using monthly and regional variation of different labour market programmes as explanatory variables. Furthermore, spatial interactions are taken into account by adding a spatially correlated error term. Findings - Almost no significant negative effects are found of the stock of participants in programmes of labour market policy on the number of outflows from unemployment into regular jobs. Thus, contrary to findings at the individual level, no lock‐in effect is found. The number of programme participants does not reduce the number of outflows from unemployment. On the other hand when looking not at the stocks but on the outflows from programmes, no positive effects on outflows from unemployment at the regional level are found. Research limitations/implications - Because of data limitations only a period up to six months after completing a programme is used. Originality/value - The authors distinguish between the effects of the stock of programme participants and of the outflows from programmes. Furthermore, the authors account for spatially correlated error terms by using a GM estimator proposed by Mutl in 2006.

Suggested Citation

  • Reinhard Hujer & Paulo J.M. Rodrigues & Katja Wolf, 2009. "Estimating the macroeconomic effects of active labour market policies using spatial econometric methods," International Journal of Manpower, Emerald Group Publishing Limited, vol. 30(7), pages 648-671, November.
    • Handle: RePEc:eme:ijmpps:v:30:y:2009:i:7:p:648-671
    DOI: 10.1108/01437720910997335
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    Citations

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    Cited by:

    1. Verónica Escudero, 2018. "Are active labour market policies effective in activating and integrating low-skilled individuals? An international comparison," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-26, December.
    2. repec:ilo:ilowps:487304 is not listed on IDEAS
    3. Carsten Ochsen, 2021. "Age cohort effects on unemployment in the USA: Evidence from the regional level," Papers in Regional Science, Wiley Blackwell, vol. 100(4), pages 1025-1053, August.
    4. Pignatti Clemente & Van Belle Eva, 2021. "Better together: Active and passive labor market policies in developed and developing economies," IZA Journal of Development and Migration, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 12(1), pages 1-27, January.
    5. Matthias Arnold & Dominik Wied, 2014. "Improved GMM estimation of random effects panel data models with spatially correlated error components," Papers in Regional Science, Wiley Blackwell, vol. 93(1), pages 77-99, March.
    6. Fervers, Lukas & Brändle, Tobias & Webel, Carina, 2014. "Decomposing a Matching Estimation - Correlated Unobserved non-random Selection, Substitution, and Causal Effects in a Large Scale ALMP Program in Germany," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100500, Verein für Socialpolitik / German Economic Association.
    7. Reinhard Hujer, 2011. "Mikroökonometrie und Kausalität: Zur Bedeutung arbeitsmarktpolitischer Evaluationsstudien," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer;Deutsche Statistische Gesellschaft - German Statistical Society, vol. 5(1), pages 5-18, March.
    8. Joachim Wolff & Gesine Stephan, 2013. "Subsidized work before and after the German Hartz reforms: design of major schemes, evaluation results and lessons learnt," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-24, December.
    9. Lottmann, Franziska, 2012. "Spatial dependencies in German matching functions," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 27-41.
    10. Goulas, Eleftherios & Zervoyianni, Athina, 2018. "Active labour-market policies and output growth: Is there a causal relationship?," Economic Modelling, Elsevier, vol. 73(C), pages 1-14.
    11. Caliendo, Marco & Künn, Steffen & Mahlstedt, Robert, 2017. "The return to labor market mobility: An evaluation of relocation assistance for the unemployed," Journal of Public Economics, Elsevier, vol. 148(C), pages 136-151.
    12. Marwa Sahnoun & Chokri Abdennadher, 2018. "The assessment of active labor market policies: evidence from OECD countries," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 35(2), pages 257-283, August.
    13. Elzbieta Antczak & Ewa Galecka-Burdziak & Robert Pater, 2016. "Spatial Labour Market Matching," CERGE-EI Working Papers wp578, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    14. Wapler, Rüdiger & Wolf, Katja & Wolff, Joachim, 2022. "Do active labor market policies for welfare recipients in Germany raise their regional outflow into work?," Journal of Policy Modeling, Elsevier, vol. 44(3), pages 550-563.
    15. Lalinsky, Tibor & Pál, Rozália, 2022. "Distribution of COVID-19 government support and its consequences for firm liquidity and solvency," Structural Change and Economic Dynamics, Elsevier, vol. 61(C), pages 305-335.
    16. Wolfgang Dauth & Reinhard Hujer & Katja Wolf, 2016. "Do Regions Benefit from Active Labour Market Policies? A Macroeconometric Evaluation Using Spatial Panel Methods," Regional Studies, Taylor & Francis Journals, vol. 50(4), pages 692-708, April.
    17. Caliendo, Marco & Künn, Steffen & Mahlstedt, Robert, 2017. "Mobility Assistance Programmes for Unemployed Workers, Job Search Behaviour and Labour Market Outcomes," IZA Discussion Papers 11169, Institute of Labor Economics (IZA).
    18. Demidova, Olga, 2021. "Methods of spatial econometrics and evaluation of government programs effectiveness," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 64, pages 107-134.
    19. Ovidiu BUZOIANU & Amelia DIACONU & Marcela Antoaneta NICULESCU & Silviu DIACONU, 2020. "Analysis Of The Economic And Social Effects Of Unemployment In Romania," Proceedings of the INTERNATIONAL MANAGEMENT CONFERENCE, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 14(1), pages 705-711, November.
    20. Sabine Klinger & Thomas Rothe, 2012. "The Impact of Labour Market Reforms and Economic Performance on the Matching of the Short‐term and the Long‐term Unemployed," Scottish Journal of Political Economy, Scottish Economic Society, vol. 59(1), pages 90-114, February.
    21. Rüdiger Wapler & Daniel Werner & Katja Wolf, 2018. "Active labour market policies in Germany: do regional labour markets benefit?," Applied Economics, Taylor & Francis Journals, vol. 50(51), pages 5561-5578, November.
    22. Wapler, Rüdiger & Wolf, Katja & Wolff, Joachim, 2018. "Do active labour market policies for welfare recipients in Germany raise their regional outflow into work? : A matching function approach," IAB-Discussion Paper 201808, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    23. Marcin Wozniak, 2021. "Spatial matching on the urban labor market: estimates with unique micro data," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 55(1), pages 1-17, December.
    24. Moczall, Andreas, 2015. "The effect of hiring subsidies on regular wages," IAB-Discussion Paper 201501, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    25. Moczall, Andreas, 2015. "The effect of hiring subsidies on regular wages," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113225, Verein für Socialpolitik / German Economic Association.

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