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Do Firms Benefit from Active Labour Market Policies?

  • Michael Lechner
  • Conny Wunsch
  • Patrycja Scioch

This paper investigates the link between variation in the supply of workers who participate in specific types of active labour market policies (ALMPs) and firm performance using a new exceptionally informative German employer-employee data base. For identification we exploit that German local employment agencies (LEAs) have a high degree of autonomy in determining their own mix of ALMPs and that firms' hiring regions overlap only imperfectly with the areas of responsibility of the LEAs. Our results indicate that in general firms do not benefit from ALMPs and in some cases may even be harmed by certain programs, in particular by subsidized employment and longer training programs. These findings complement the negative assessment of the cost-effectiveness of ALMPs from the empirical literature on the effects for participants.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2013/wp-cesifo-2013-09/cesifo1_wp4392.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 4392.

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Date of creation: 2013
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Handle: RePEc:ces:ceswps:_4392
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  1. van den Berg, Gerard J. & Bergemann, Annette & Caliendo, Marco, 2008. "The effect of active labor market programs on not-yet treated unemployed individuals," Working Paper Series 2008:26, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  2. Blasco, Sylvie & Pertold-Gebicka, Barbara, 2012. "Employment Policies, Hiring Practices and Firm Performance," IZA Discussion Papers 7013, Institute for the Study of Labor (IZA).
  3. Geerdsen, Lars Pico & Holm, Anders, 2007. "Duration of UI periods and the perceived threat effect from labour market programmes," Labour Economics, Elsevier, vol. 14(3), pages 639-652, June.
  4. Lars Pico Geerdsen, 2006. "Is there a Threat Effect of Labour Market Programmes? A Study of ALMP in the Danish UI System," Economic Journal, Royal Economic Society, vol. 116(513), pages 738-750, 07.
  5. Wooldridge, Jeffrey M. & Imbens, Guido, 2009. "Recent Developments in the Econometrics of Program Evaluation," Scholarly Articles 3043416, Harvard University Department of Economics.
  6. Dan A. Black & Jeffrey A. Smith & Mark C. Berger & Brett J. Noel, 2003. "Is the Threat of Reemployment Services More Effective Than the Services Themselves? Evidence from Random Assignment in the UI System," American Economic Review, American Economic Association, vol. 93(4), pages 1313-1327, September.
  7. Lechner, Michael & Miquel, Ruth & Wunsch, Conny, 2005. "Long-run effects of public sector sponsored training in West Germany," IAB Discussion Paper 200503, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  8. Snower, Dennis J., 1994. "Converting Unemployment Benefits into Employment Subsidies," CEPR Discussion Papers 930, C.E.P.R. Discussion Papers.
  9. Bernhard, Sarah & Gartner, Hermann & Stephan, Gesine, 2008. "Wage subsidies for needy job-seekers and their effect on individual labour market outcomes after the German reforms," IAB Discussion Paper 200821, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  10. Michael Lechner & Ruth Miquel & Conny Wunsch, 2007. "The Curse and Blessing of Training the Unemployed in a Changing Economy: The Case of East Germany After Unification," German Economic Review, Verein für Socialpolitik, vol. 8, pages 468-509, November.
  11. Huber, Martin & Lechner, Michael & Wunsch, Conny, 2013. "The performance of estimators based on the propensity score," Journal of Econometrics, Elsevier, vol. 175(1), pages 1-21.
  12. David E. Card & Jochen Kluve & Andrea Weber, 2009. "Active Labor Market Policy Evaluations: A Meta-analysis," NRN working papers 2009-02, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
  13. Markus Frölich & Michael Lechner, 2006. "Exploiting regional treatment intensity for the evaluation of labour market policies," University of St. Gallen Department of Economics working paper series 2006 2006-12, Department of Economics, University of St. Gallen.
  14. Graversen, Brian Krogh & van Ours, Jan C., 2008. "How to help unemployed find jobs quickly: Experimental evidence from a mandatory activation program," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 2020-2035, October.
  15. Sianesi, Barbara, 2008. "Differential effects of active labour market programs for the unemployed," Labour Economics, Elsevier, vol. 15(3), pages 370-399, June.
  16. Matz Dahlberg & Anders Forslund, 2005. "Direct Displacement Effects of Labour Market Programmes," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(3), pages 475-494, 09.
  17. Michael Lechner & Benjamin Schünemann & Conny Wunsch, 2013. "Do Long-term Unemployed Workers Benefit from Targeted Wage Subsidies?," Working papers 2013/14, Faculty of Business and Economics - University of Basel.
  18. Michael Rosholm & Michael Svarer, 2008. "The Threat Effect of Active Labour Market Programmes," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(2), pages 385-401, 06.
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