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Reemployment effects from increased activation: Evidence from times of crisis

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  • Pedro S. Martins
  • Sofia Pessoa e Costa

Abstract

Although activation services such as monitoring, training, job subsidies or workfare have been shown to increase exits from unemployment, there is no evidence about their effects during recessions. We address this policy-relevant question by evaluating a large activation programme introduced in Portugal in early 2012, a time of very high and still increasing unemployment. The programme was based on requiring specific unemployment benefit recipients to meet caseworkers in jobcentres and then participate in active labour market policies. Our analysis draws on rich longitudinal data, the targeted nature of the programme (namely of its component focused on those unemployed for at least six months), and fuzzy regression discontinuity methods. We find that, despite the weak labour market, the programme is very succesful as it doubles the monthly reemployment probability. Moreover, we find no effects in terms of income or transitions to non-employment. The results are robust to a number of checks, including a falsification exercise based on pre-programme data.

Suggested Citation

  • Pedro S. Martins & Sofia Pessoa e Costa, 2014. "Reemployment effects from increased activation: Evidence from times of crisis," Working Papers 52, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    • Handle: RePEc:cgs:wpaper:52
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    References listed on IDEAS

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    4. Michael Lechner & Conny Wunsch, 2009. "Are Training Programs More Effective When Unemployment Is High?," Journal of Labor Economics, University of Chicago Press, vol. 27(4), pages 653-692, October.
    5. Jeff Borland & Yi-Ping Tseng, 2007. "Does a Minimum Job Search Requirement Reduce Time on Unemployment Payments? Evidence from the Jobseeker Diary in Australia," ILR Review, Cornell University, ILR School, vol. 60(3), pages 357-378, April.
    6. van den Berg, Gerard J. & Kjaersgaard, Lene & Rosholm, Michael, 2012. "To Meet or Not to Meet (Your Case Worker) – That is the Question," IZA Discussion Papers 6476, Institute for the Study of Labor (IZA).
    7. Cockx, Bart & Ghirelli, Corinna & Van der Linden, Bruno, 2014. "Is it socially efficient to impose job search requirements on unemployed benefit claimants with hyperbolic preferences?," Journal of Public Economics, Elsevier, vol. 113(C), pages 80-95.
    8. Cockx, Bart & Dejemeppe, Muriel, 2012. "Monitoring job search effort: An evaluation based on a regression discontinuity design," Labour Economics, Elsevier, vol. 19(5), pages 729-737.
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    10. Addison, John T. & Portugal, Pedro, 2008. "How do different entitlements to unemployment benefits affect the transitions from unemployment into employment?," Economics Letters, Elsevier, vol. 101(3), pages 206-209, December.
    11. McVicar, Duncan, 2008. "Job search monitoring intensity, unemployment exit and job entry: Quasi-experimental evidence from the UK," Labour Economics, Elsevier, vol. 15(6), pages 1451-1468, December.
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    Cited by:

    1. Peter Mueser & Marios Michaelides, 2017. "The Labor Market Effects of U.S. Reemployment Policy: Lessons from an Analysis of Four Programs during the Great Recession," Working Papers 18-05, Department of Economics, University of Missouri.
    2. Pedro S. Martins, 2016. "Can overtime premium flexibility promote employment? Firm-and worker-level evidence from a labour law reform," FEUNL Working Paper Series wp607, Universidade Nova de Lisboa, Faculdade de Economia.
    3. Pedro S. Martins, 2015. "Working to get fired? Regression discontinuity effects of unemployment benefit eligibility on prior employment duration," Working Papers 61, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    4. Martins, Pedro S., 2016. "Should the Maximum Duration of Fixed-Term Contracts Increase in Recessions? Evidence from a Law Reform," IZA Discussion Papers 10206, Institute for the Study of Labor (IZA).
    5. Kluve, Jochen., 2016. "A review of the effectiveness of active labour market programmes with a focus on Latin America and the Caribbean," ILO Working Papers 994901193402676, International Labour Organization.

    More about this item

    Keywords

    Public employment services; job search; public policy evaluation;

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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