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Compulsion in active labour market programmes

  • Jan C. van Ours

    (Department of Economics and CentER, Tilberg University, Departement of Economics, University of Melbourne, IZA and CEPR)

This paper examines compulsion in active labour market programmes (ALMP). When an unemplyed worker has to participate in a programme in order to remain eligible for benefits there are two seperate effects. First, there is the treatment effect, i.e. the programme makes the worker more attractive for a potential employer or makes search more efficient, thus helping the unemployed worker to find a job more quickly. Second, there is the compulsion effect, i.e. because the worker has to attend the programme his value of being unemployed drops and h is stimulated and a job more quickly. So, both effects induce the worker to find a job more quickly. The difference between the treatment effect and the compulsion effect concerns the quality of the post-unemployment job. The treatment effect improves the quality; the compulsion effect lowers the quality of post-unemplooyment jobs.

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Article provided by National Institute of Economic and Social Research in its journal National Institute Economic Review.

Volume (Year): 202 (2007)
Issue (Month): 1 (October)
Pages: 67-78

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Handle: RePEc:sae:niesru:v:202:y:2007:i:1:p:67-78
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  17. van Ours, Jan C & Vodopivec, Milan, 2006. "Shortening the Potential Duration of Unemployment Benefits Does Not Affect the Quality of Post-Unemployment Jobs: Evidence from a Natural Experiment," CEPR Discussion Papers 5741, C.E.P.R. Discussion Papers.
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