Labor Policies to Raise Employment
Using panel data for 15 industrial countries, active labor market policies (ALMPs) are shown to have a positive effect on employment rates, after controlling for institutional variables and country-specific effects. Among such policies, direct subsidies for job creation were the most effective. This paper shows that ALMPs raise employment by improving labor market functioning: higher expenditure on ALMPs is associated with lower wages for given levels of the unemployment rate. Whether ALMPs are cost-effective from a budgetary perspective remain to be determined, but they are certainly not substitutes for comprehensive institutional reforms. In particular, if higher expenditures on ALMPs are financed through increased labor income taxation, it could have deleterious effects on labor utilization. IMF Staff Papers (2007) 54, 113–138. doi:10.1057/palgrave.imfsp.9450004
Volume (Year): 54 (2007)
Issue (Month): 1 (May)
|Contact details of provider:|| Web page: http://www.palgrave-journals.com/ |
|Order Information:|| Postal: Palgrave Macmillan Journals, Subscription Department, Houndmills, Basingstoke, Hampshire RG21 6XS, UK|
Web: http://www.palgrave-journals.com/pal/subscribe/index.html Email:
When requesting a correction, please mention this item's handle: RePEc:pal:imfstp:v:54:y:2007:i:1:p:113-138. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Daniel Foley)
If references are entirely missing, you can add them using this form.