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The Effect of Active Labor Market Programs on Not-Yet Treated Unemployed Individuals


  • Gerard J. van den Berg
  • Annette H. Bergemann
  • Marco Caliendo


Labor market programs may affect unemployed individuals' behavior before they enroll. Such ex ante effects are hard to identify without model assumptions. We develop a novel method that relates self-reported perceived treatment rates and job-search behavioral outcomes, like the reservation wage, to each other, among newly unemployed workers. Job search theory is used to derive theoretical predictions. To deal with effect heterogeneity and selectivity, the effects of interest are estimated by propensity score matching. We apply the method to the German active labor market program system, using a novel data set including self-reported assessments of the variables of interest as well as unusually detailed information on behavior, attitudes, and past outcomes. We find that the system generates a negative ex ante effect on the reservation wage and a positive effect on search effort. (JEL: J64, C21, D83, D84) (c) 2009 by the European Economic Association.

Suggested Citation

  • Gerard J. van den Berg & Annette H. Bergemann & Marco Caliendo, 2009. "The Effect of Active Labor Market Programs on Not-Yet Treated Unemployed Individuals," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 606-616, 04-05.
  • Handle: RePEc:tpr:jeurec:v:7:y:2009:i:2-3:p:606-616

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    References listed on IDEAS

    1. van den Berg, Gerard J & Gorter, Cees, 1997. "Job Search and Commuting Time," Journal of Business & Economic Statistics, American Statistical Association, vol. 15(2), pages 269-281, April.
    2. Gerard J. van den Berg & Bas van der Klaauw, 2006. "Counseling And Monitoring Of Unemployed Workers: Theory And Evidence From A Controlled Social Experiment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(3), pages 895-936, August.
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    5. Rafael Lalive & Jan C. van Ours & Josef Zweimüller, 2005. "The Effect Of Benefit Sanctions On The Duration Of Unemployment," Journal of the European Economic Association, MIT Press, vol. 3(6), pages 1386-1417, December.
    6. Bernhard, Sarah & Hohmeyer, Katrin & Jozwiak, Eva & Koch, Susanne & Kruppe, Thomas & Stephan, Gesine & Wolff, Joachim, 2008. "Aktive Arbeitsmarktpolitik in Deutschland und ihre Wirkungen," IAB-Forschungsbericht 200802, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    7. Lancaster, Tony & Chesher, Andrew, 1983. "An Econometric Analysis of Reservation Wages," Econometrica, Econometric Society, vol. 51(6), pages 1661-1676, November.
    8. Marco Caliendo & Sabine Kopeinig, 2008. "Some Practical Guidance For The Implementation Of Propensity Score Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 31-72, February.
    9. Gerard J. van den Berg, 1990. "Nonstationarity in Job Search Theory," Review of Economic Studies, Oxford University Press, vol. 57(2), pages 255-277.
    10. Abbring, Jaap H & van den Berg, Gerard J, 2005. "Social experiments and intrumental variables with duration outcomes," Working Paper Series 2005:11, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    11. Lancaster, Tony, 1985. "Simultaneous equations models in applied search theory," Journal of Econometrics, Elsevier, vol. 28(1), pages 113-126, April.
    12. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    13. Edwin Leuven & Barbara Sianesi, 2003. "PSMATCH2: Stata module to perform full Mahalanobis and propensity score matching, common support graphing, and covariate imbalance testing," Statistical Software Components S432001, Boston College Department of Economics, revised 01 Feb 2018.
    14. Barbara Sianesi, 2001. "Propensity score matching," United Kingdom Stata Users' Group Meetings 2001 12, Stata Users Group, revised 23 Aug 2001.
    15. Gerard van den Berg & Bas van der Klaauw, 2000. "Counseling and Monitoring of Unemployed Workers: Theory and Evidence from a Social Experiment," Econometric Society World Congress 2000 Contributed Papers 0972, Econometric Society.
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    Cited by:

    1. Michael Lechner & Patrycja Scioch & Conny Wunsch, 2013. "Do Firms Benefit from Active Labour Market Policies?," Working papers 2013/11, Faculty of Business and Economics - University of Basel.
    2. Hullegie, P.G.J., 2012. "Essays on health and labor economics," Other publications TiSEM dcc68fc9-7af1-4ba9-8f90-6, Tilburg University, School of Economics and Management.
    3. Torben M. Andersen & Michael Svarer, 2014. "The Role of Workfare in Striking a Balance between Incentives and Insurance in the Labour Market," Economica, London School of Economics and Political Science, vol. 81(321), pages 86-116, January.
    4. Marco Caliendo & Armin Falk & Lutz C. Kaiser & Hilmar Schneider & Arne Uhlendorff & Gerard van den Berg & Klaus F. Zimmermann, 2011. "The IZA Evaluation Dataset: towards evidence-based labor policy making," International Journal of Manpower, Emerald Group Publishing, vol. 32(7), pages 731-752, October.
    5. Annette Bergemann & Marco Caliendo & Gerard J. van den Berg & Klaus F. Zimmermann, 2011. "The threat effect of participation in active labor market programs on job search behavior of migrants in Germany," International Journal of Manpower, Emerald Group Publishing, vol. 32(7), pages 777-795, October.
    6. Patrick Arni & Marco Caliendo & Steffen Künn & Klaus Zimmermann, 2014. "The IZA evaluation dataset survey: a scientific use file," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-20, December.
    7. Brian Graversen & Brian Larsen, 2013. "Is there a threat effect of mandatory activation programmes for the long-term unemployed?," Empirical Economics, Springer, vol. 44(2), pages 1031-1051, April.
    8. repec:spr:izalpo:v:6:y:2017:i:1:d:10.1186_s40173-017-0094-0 is not listed on IDEAS
    9. Arni, Patrick, 2015. "Opening the Blackbox: How Does Labor Market Policy Affect the Job Seekers' Behavior? A Field Experiment," IZA Discussion Papers 9617, Institute for the Study of Labor (IZA).
    10. Schmidl, Ricarda, 2015. "The Effectiveness of Early Vacancy Information in the Presence of Monitoring and ALMP," IZA Discussion Papers 9575, Institute for the Study of Labor (IZA).
    11. Caliendo, Marco & Uhlendorff, Arne, 2010. "Determinanten des Suchverhaltens von Arbeitslosen: Ausgewählte Erkenntnisse basierend auf dem IZA Evaluationsdatensatz," IZA Discussion Papers 5379, Institute for the Study of Labor (IZA).
    12. Holm, Anders & Høgelund, Jan & Gørtz, Mette & Rasmussen, Kristin Storck & Houlberg, Helle Sofie Bøje, 2017. "Employment effects of active labor market programs for sick-listed workers," Journal of Health Economics, Elsevier, vol. 52(C), pages 33-44.
    13. Wapler, Rüdiger & Werner, Daniel & Wolf, Katja, 2014. "Active labour-market policies in Germany : do regional labour markets benefit?," IAB Discussion Paper 201428, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    14. Escudero, Verónica. & López Mourelo, Elva., 2015. "The Youth Guarantee programme in Europe features, implementation and challenges," ILO Working Papers 994888913402676, International Labour Organization.
    15. Caliendo, Marco & Cobb-Clark, Deborah A. & Hennecke, Juliane & Uhlendorff, Arne, 2015. "Job Search, Locus of Control, and Internal Migration," IZA Discussion Papers 9600, Institute for the Study of Labor (IZA).
    16. Tuomala, Juha & Hämäläinen, Kari & Hämäläinen, Ulla, 2014. "The labour market impacts of a youth guarantee: lessons for Europe?," Working Papers 60, VATT Institute for Economic Research.
    17. Rafael Lalive & Michael Morlok & Josef Zweimüller, 2011. "Applying for jobs: Does ALMP participation help?," ECON - Working Papers 019, Department of Economics - University of Zurich.
    18. Jonas Maibom & Michael Rosholm & Michael Svarer, 2017. "Experimental Evidence on the Effects of Early Meetings and Activation," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(3), pages 541-570, July.
    19. Emil Mihaylov, 2011. "Evaluation of Subsidized Employment Programs for Long-Term Unemployed in Bulgaria," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 136-167.
    20. Crépon, Bruno & Ferracci, Marc & Jolivet, Grégory & van den Berg, Gerard J., 2010. "Analyzing the Anticipation of Treatments Using Data on Notification Dates," IZA Discussion Papers 5265, Institute for the Study of Labor (IZA).
    21. repec:eee:labeco:v:46:y:2017:i:c:p:14-25 is not listed on IDEAS
    22. Caliendo, Marco & Uhlendorff, Arne, 2011. "Determinanten des Suchverhaltens von Arbeitslosen : ausgewählte Erkenntnisse basierend auf dem IZA Evaluationsdatensatz (Determinants of the search behavior of the unemployed : selected results based ," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 44(1/2), pages 119-125.
    23. Paolo Lucchino & Dr Richard Dorsett, 2013. "Young people's labour market transitions: the role of early experiences," National Institute of Economic and Social Research (NIESR) Discussion Papers 419, National Institute of Economic and Social Research.
    24. repec:ilo:ilowps:488891 is not listed on IDEAS
    25. Pedro H. C. Sant'Anna, 2016. "Program Evaluation with Right-Censored Data," Papers 1604.02642,

    More about this item

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations


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