Do labor market programs affect labor force participation?
This paper estimates the macroeconomic effect of labor market programs on labor force participation. Labor market programs could counteract businesscycle variation in the participation rate that is due to the discouraged-worker effect, and they could prevent labor force outflow. An equation that determines the participation rate is estimated using panel data (1986-1998) for Sweden’s municipalities. The results indicate that labor market programs have relatively large and positive effects on labor force participation. If the number of participants in labor market programs increases temporarily by 100, the labor force increases by around 63 persons. The effect is temporary so the number of participants in the labor force returns to the old level in the next period. If the number of participants in programs is permanently increased, the labor force increases by around 70 persons. The results indicate that programs prevent labor force outflow because participants who would have left the labor force in the absence of programs are now participating because of the programs. Income and vacancies have positive long- and short-run effects on participation rate. Open unemployment, job destruction rate, and proportion of persons be-tween ages 18-24 and 55-65 have negative long-run effects on the participation rate.
|Date of creation:||30 Jan 2002|
|Date of revision:|
|Publication status:||Published in Swedish Economic Policy Review, 2001, pages 215-234.|
|Contact details of provider:|| Postal: IFAU, P O Box 513, SE-751 20 Uppsala, Sweden|
Phone: (+46) 18 - 471 70 70
Fax: (+46) 18 - 471 70 71
Web page: http://www.ifau.se/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Richard Blundell & Steve Bond, 1995.
"Initial conditions and moment restrictions in dynamic panel data models,"
IFS Working Papers
W95/17, Institute for Fiscal Studies.
- Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
- Blundell, R. & Bond, S., 1995. "Initial Conditions and Moment Restrictions in Dynamic Panel Data Models," Economics Papers 104, Economics Group, Nuffield College, University of Oxford.
- R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
- Dahlberg, M. & Forslund, A., 1999.
"Direct Displacement Effects of Labour Market Programmes: the Case of Sweden,"
1999:22, Uppsala - Working Paper Series.
- Dahlberg, Matz & Forslund, Anders, 1999. "Direct displacement effects of labour market programmes: the case of Sweden," Working Paper Series 1999:7, IFAU - Institute for Evaluation of Labour Market and Education Policy.
- Dahlberg, Matz & Forslund, Anders, 1999. "Direct Displacement Effects of Labour Market Programmes: The Case of Sweden," Working Paper Series 1999:22, Uppsala University, Department of Economics.
- Holmlund, B. & Linden, J., 1991.
"Job Matching, Temporary Public Employment, and Equilibrium Unemployment,"
1991l, Uppsala - Working Paper Series.
- Holmlund, Bertil & Linden, Johan, 1993. "Job matching, temporary public employment, and equilibrium unemployment," Journal of Public Economics, Elsevier, vol. 51(3), pages 329-343, July.
- Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
When requesting a correction, please mention this item's handle: RePEc:hhs:ifauwp:2002_003. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Monica Fällgren)
If references are entirely missing, you can add them using this form.