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The Effects of Benefits, Incentives, and Sanctions on Youth Employment


  • Jensen, P.
  • Nielsen, M.S.
  • Rosholm, M.


The youth unemployment rate in Denmark has recently been declining dramatically, which is unique among the OECD countries. In 1996, a radical labour market reform was implemented, the Youth Unemployment Programme (YUP), directed towards unemployed, low-educated youth. This paper analyses the effects of the implementation of the YUP. We investigate the effects on the duration of unemployment spells and on the transition rates from unemployment to schooling and employment. We find that the YUP has been successful through a combination of three effects: an announcement effect, a direct programme effect, and a sanction effect.

Suggested Citation

  • Jensen, P. & Nielsen, M.S. & Rosholm, M., 1999. "The Effects of Benefits, Incentives, and Sanctions on Youth Employment," Papers 99-05, Centre for Labour Market and Social Research, Danmark-.
  • Handle: RePEc:fth:clmsre:99-05

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    References listed on IDEAS

    1. Mark Yuying An & Roberto Ayala, 1996. "Nonparametric Estimation of a Survivor Function with Across- Interval-Censored Data," Econometrics 9611003, EconWPA.
    2. Mark Yuying An, 1996. "Semiparametric Estimation of Willingness to Pay Distributions," Econometrics 9611001, EconWPA.
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    Cited by:

    1. James Banks & Richard Disney & Alan Duncan & John Van Reenen, 2005. "The Internationalisation of Public Welfare Policy," Economic Journal, Royal Economic Society, vol. 115(502), pages 62-81, March.
    2. Müller, Kai-Uwe, 2007. "Observed and unobserved determinants of unemployment insurance benefit sanctions in Germany: Evidence from matched individual and regional administrative data," Discussion Papers, Research Unit: Labor Market Policy and Employment SP I 2007-107, Social Science Research Center Berlin (WZB).
    3. Wolfgang Ochel, 2002. "International Comparisons and Transfer of Labour Market Institutions," CESifo Working Paper Series 788, CESifo Group Munich.
    4. Kai-Uwe Müller, 2007. "Individual and regional determinants of receiving unemployment benefit sanctions in Germany," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer;Deutsche Statistische Gesellschaft - German Statistical Society, vol. 1(3), pages 275-286, December.
    5. Ortega, Jaime, 2000. "Job Rotation as a Mechanism for Learning," CLS Working Papers 00-4, University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research.
    6. Viktor Steiner & Tobias Hagen, 2002. "Was kann die Aktive Arbeitsmarktpolitik in Deutschland aus der Evaluationsforschung in anderen europäischen Ländern lernen?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 3(2), pages 189-206, May.
    7. Wolfgang Ochel, 2004. "Lernen von anderen Ländern: Zum internationalen Vergleich und Transfer von Arbeitsmarktinstitutionen," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 5(2), pages 139-158, May.
    8. Westergaard-Nielsen, Niels, 2001. "Danish Labour Market Policy: Is it worth it?," CLS Working Papers 01-10, University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research.
    9. Trine Filges & Birthe Larsen, 2005. "Stick, Carrot and Skill Acquisition," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(3), pages 495-519, September.
    10. Roed,K. & Zhang,T., 2000. "Labour market transitions and economic incentives," Memorandum 15/2000, Oslo University, Department of Economics.
    11. Hakola, Tuulia, 2002. "Alternative Approaches to Model Withdrawals from the Labour Market – A Literature Review," Working Paper Series 2003:4, Uppsala University, Department of Economics.
    12. Konle-Seidl, Regina, 2005. "Lessons learned: Internationale Evaluierungsergebnisse zu Wirkungen aktiver und aktivierender Arbeitsmarktpolitik," IAB-Forschungsbericht 200509, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    13. Emmanuel Duguet & Florent Frémigacci & Yannick L’Horty, 2008. "Indemnisation du chômage et retour à l’emploi : un examen économétrique," Documents de recherche 08-07, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
    14. Jochen Kluve & Christoph M. Schmidt, 2002. "Can training and employment subsidies combat European unemployment?," Economic Policy, CEPR;CES;MSH, vol. 17(35), pages 409-448, October.
    15. Pedersen, Peder J. & Smith, Nina, 2001. "International Migration and Migration policy in Denmark," CLS Working Papers 01-5, University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research.
    16. Hakola Tuulia, 2000. "Navigating through the Finnish Pension System," Discussion Papers 224, VATT Institute for Economic Research.
    17. Rabe, Birgitta, 2000. "Wirkungen aktiver Arbeitsmarktpolitik: Evaluierungsergebnisse für Deutschland, Schweden, Dänemark und die Niederlande," Discussion Papers, Research Unit: Labor Market Policy and Employment FS I 00-208, Social Science Research Center Berlin (WZB).

    More about this item



    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings


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