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Direct Displacement Effects of Labour Market Programmes: the Case of Sweden

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  • Dahlberg, M.
  • Forslund, A.

Abstract

Using a panel of 260 Swedish municipalities over the period 1987-1996, this paper investigates the direct displacement effects of active labour market programmes (ALMPs). Compared to earlier studies on this topic, we have more and better data. From our GMM estimations, we find that (i) there are direct displacement effects from those ALMPs that generate subsidised labour (in the order of approximately 65 percent), but there seems to be no (significant) displacement effects from training, (ii) most ALMPs seem to increase labour force participation, and (iii) the adjustment to the optimal level of employment seems to be sluggish. A consequence of (ii) is that the earlier studies have overstated the displacement effects (since they normalised with the labour force).

Suggested Citation

  • Dahlberg, M. & Forslund, A., 1999. "Direct Displacement Effects of Labour Market Programmes: the Case of Sweden," Papers 1999:22, Uppsala - Working Paper Series.
  • Handle: RePEc:fth:uppaal:1999:22
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    6. Bergström, Pål & Dahlberg, Matz & Johansson, Eva, 1997. "GMM Bootstrapping and Testing in Dynamic Panels," Working Paper Series 1997:10, Uppsala University, Department of Economics.
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    11. repec:fth:prinin:401 is not listed on IDEAS
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    Cited by:

    1. Johansson, Kerstin, 2006. "Do labor market flows affect labor-force participation?," Working Paper Series 2006:17, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    2. Johansson, Kerstin, 2002. "Labor Market Programs, the Discouraged-Worker Effect, and Labor Force Participation," Working Paper Series 2002:16, Uppsala University, Department of Economics.
    3. Skans, Oskar Nordstrom, 2005. "Age effects in Swedish local labor markets," Economics Letters, Elsevier, vol. 86(3), pages 419-426, March.
    4. Assar Lindbeck, 2006. "Sustainable social spending," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 13(4), pages 303-324, August.
    5. Carling, Kenneth & Richardson, Katarina, 2004. "The relative efficiency of labor market programs: Swedish experience from the 1990s," Labour Economics, Elsevier, vol. 11(3), pages 335-354, June.
    6. Michael White and Genevieve Knight, 2003. "Benchmarking the effectiveness of NDYP: A review of European and US literature on the microeconomic effects of labour market programmes for young people," PSI Research Discussion Series 10, Policy Studies Institute, UK.
    7. Lundin, Martin & Skedinger, Per, 2006. "Decentralisation of active labour market policy: The case of Swedish local employment service committees," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 775-798, May.
    8. Schröder, Lena, 2004. "The role of youth programmes in the transition from school to work," Working Paper Series 2004:5, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    9. Johansson, Kerstin, 2002. "Labor market programs, the discouraged-worker effect, and labor force participation," Working Paper Series 2002:9, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    10. Carling, Kenneth & Richardson, Katarina, 2001. "The relative efficiency of labor market programs: Swedish experience from the 1990's," Working Paper Series 2001:2, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    11. Mörk, Eva, 2003. "The impact of active labor market programs on municipal services," Working Paper Series 2003:2, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    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. Matz Dahlberg & Anders Forslund, 2005. "Direct Displacement Effects of Labour Market Programmes," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(3), pages 475-494, September.
    14. Frolich, Markus, 2007. "Nonparametric IV estimation of local average treatment effects with covariates," Journal of Econometrics, Elsevier, pages 35-75.
    15. Nilsson, Anna & Agell, Jonas, 2003. "Crime, unemployment and labor market programs in turbulent times," Working Paper Series 2003:14, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    16. Sacklén, Hans, 2002. "An evaluation of the Swedish trainee replacement schemes," Working Paper Series 2002:7, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    17. Michael Lechner, 2002. "Eine wirkungsorientierte aktive Arbeitsmarktpolitik in Deutschland und der Schweiz: Eine Vision - zwei Realitäten," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 3(2), pages 159-174, May.
    18. Forslund, Anders & Kolm, Ann-Sofie, 2000. "Active labour market policies and real-wage determination - Swedish evidence," Working Paper Series 2000:7, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    19. Johansson, Kerstin, 2002. "Do labor market programs affect labor force participation?," Working Paper Series 2002:3, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    20. 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

    Keywords

    LABOUR MARKET ; SWEDEN;

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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