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The Impact of Active Labour Market Policy on Post-Unemployment Outcomes: Evidence from a Social Experiment in Denmark

  • Blasco, Sylvie

    ()

    (Department of Economics, Aarhus School of Business)

  • Rosholm, Michael

    ()

    (Department of Economics, Aarhus School of Business)

While job search theory predicts that active labour market policies (ALMPs) can a ect post-unemployment outcomes, empirical evaluations investigating transition rates have mostly focused on the impact of ALMPs on exit rates from the current unemployment spell. We use a social experiment, which was conducted in Denmark in 2005-6, to investigate the e ects of a dramatic intensi cation of ALMPs on reemployment stability. We investigate the nature of this impact. We estimate a duration model with lagged duration dependence to separately identify \indirect" (via shorter unemployment duration) and \direct" (through a more ecient matching process) e ects of ALMPs on subsequent employment duration. We nd that overall intensive activation signi cantly reduces unemployment recurrence for men, but not for women. When we control for dynamic selection into employment and lagged duration dependence, the positive impact of the treatment becomes smaller but remains signi cant. 80% of the global impact of intensi cation acts through the direct channel for men.

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File URL: http://www.hha.dk/nat/wper/11-06_sylviebrom.pdf
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Paper provided by University of Aarhus, Aarhus School of Business, Department of Economics in its series Working Papers with number 11-6.

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Length: 39 pages
Date of creation: 01 Mar 2011
Date of revision:
Handle: RePEc:hhs:aareco:2011_006
Contact details of provider: Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark
Phone: +45 89 486396
Fax: +45 8615 5175
Web page: http://www.asb.dk/departments/nat.aspx

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