Does Active Labour Market Policy Reduce Unemployment When Search Is Endogenous?
We analyse the effects active labour market programmes (ALMPs) have on unemployment in a union wage-setting framework when search is endogenous. We assume that a union president, elected by majority voting determines the wage. We analyse the case where ALMPs increase match efficiency of the marginalized workers, and show that ALMPs may increase unemployment.
|Date of creation:||01 Sep 2000|
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