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Estimating the Threat Effect of Active Labour Market Programmes

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  • Michael Rosholm
  • Michael Svarer

    (Department of Economics, University of Aarhus, Denmark)

Abstract

We combine two techniques to consistently estimate the effect of active labour market programmes and, in particular, active labour market policy regimes. Our aim is to explicitly estimate the threat effect of active labour market programmes. Based on Danish data (1998-2002) from administrative registers we find a strong and significantly positive threat effect. The threat effect is shown to reduce average unemployment duration by approximately three weeks. The implications of this result are discussed.

Suggested Citation

  • Michael Rosholm & Michael Svarer, 2004. "Estimating the Threat Effect of Active Labour Market Programmes," Economics Working Papers 2004-6, Department of Economics and Business Economics, Aarhus University.
    • Handle: RePEc:aah:aarhec:2004-6
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    References listed on IDEAS

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    More about this item

    Keywords

    Active labour market policy; Threat effect; Timing-of-events; Duration model;
    All these keywords.

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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