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Differential effects of Swedish active labour market programmes for unemployed adults during the 1990s

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Abstract

The paper evaluates the differential performance of the six main types of Swedish programmes that were available to adult unemployed workers entitled to unemployment benefits in the 1990s: labour market training, workplace introduction, work experience placement, relief work, trainee replacement and employment subsidies. On the basis of a large and particularly rich administrative dataset, propensity score multiple-treatment matching methods are applied to investigate the differential performance of the programmes both relative to one another and vis-à-vis more intense job search in open unemployment. Outcomes being assessed are short- and long-term employment rates as well as the probability of collecting unemployment benefits over time. Compared to waiting longer in open unemployment, all the programmes initially reduce their participants’ employment probability in the short term (lock-in effect). Positive findings on more long term employment prospects are confined to job subsidies alone. Participation in trainee replacement makes no difference to deputies’ subsequent labour market outcomes. Individuals joining any of the remaining programmes later display either the same (workplace introduction) or lower employment rates coupled with a higher benefit collection probability than if they had searched further as openly unemployed. A likely factor behind these disappointing results is the use of such types of programmes simply as a way to re-qualify for unemployment benefits. As to the pair-wise comparison of the six programmes, the central finding is again that the more similar a programme is to a regular job, the higher the programme’s benefits to its participants, with employment subsidies by far the best performer, followed by trainee replacement. Several macroeconomic studies have however documented large and negative displacement and dead-weight effects for exactly these types of programme, which highlights the difficult trade-off faced by labour market policy.

Suggested Citation

  • Sianesi, Barbara, 2002. "Differential effects of Swedish active labour market programmes for unemployed adults during the 1990s," Working Paper Series 2002:5, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  • Handle: RePEc:hhs:ifauwp:2002_005
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    References listed on IDEAS

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    Cited by:

    1. Paolo Naticchioni & Silvia Loriga, 2011. "Short and Long Term Evaluations of Public Employment Services in Italy," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 57(3), pages 201-229.
    2. Jespersen, Svend T. & Munch, Jakob R. & Skipper, Lars, 2008. "Costs and benefits of Danish active labour market programmes," Labour Economics, Elsevier, vol. 15(5), pages 859-884, October.
    3. Forslund, Anders & Johansson, Per & Lindqvist, Linus, 2004. "Employment subsidies - A fast lane from unemployment to work?," Working Paper Series 2004:18, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    4. Calmfors, Lars & Forslund, Anders & Hemström, Maria, 2002. "Does active labour market policy work? Lessons from the Swedish experiences," Working Paper Series 2002:4, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    5. Kluve, Jochen & Fertig, Michael & Jacobi, Lena & Nima, Leonhard & Schaffner, Sandra & Schmidt, Christoph M. & Card, David & Góra, Marek & Jensen, Peter & Leetmaa, Reelika & Patacchini, Eleonora & van , 2005. "Study on the effectiveness of ALMPs: Research project for the European Commission, DG Employment, Social Affairs and Equal Opportunities. Final report," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 69929.
    6. Betcherman, Gordon & Olivas, Karina & Dar, Amit, 2004. "Impacts of active labor market programs : new evidence from evaluations with particular attention to developing and transition countries," Social Protection and Labor Policy and Technical Notes 29142, The World Bank.
    7. Bernd Fitzenberger & Olga Orlanski & Aderonke Osikominu & Marie Paul, 2013. "Déjà Vu? Short-term training in Germany 1980–1992 and 2000–2003," Empirical Economics, Springer, vol. 44(1), pages 289-328, February.
    8. Thomas Andren & Daniela Andren, 2006. "Assessing the employment effects of vocational training using a one-factor model," Applied Economics, Taylor & Francis Journals, vol. 38(21), pages 2469-2486.
    9. Lindgren, Urban & Westerlund, Olle, 2003. "Labour market programmes and geographical mobility: migration and commuting among programme participants and openly unemployed," Working Paper Series 2003:6, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    10. Conny Wunsch, 2013. "Optimal Use of Labor Market Policies: The Role of Job Search Assistance," The Review of Economics and Statistics, MIT Press, vol. 95(3), pages 1030-1045, July.
    11. Bucher, Anne, 2010. "Impacts of hiring subsidies targeted at the long-term unemployed on the low-skilled labor market: The French experience," Economic Modelling, Elsevier, vol. 27(2), pages 553-565, March.
    12. Tito Boeri, 2005. "An Activating Social Security System," De Economist, Springer, vol. 153(4), pages 375-397, December.
    13. Carling, Kenneth & Larsson, Laura, 2002. "Does early intervention help the unemployed youth?," Working Paper Series 2002:10, IFAU - Institute for Evaluation of Labour Market and Education Policy.

    More about this item

    Keywords

    active labour market programmes; evaluation; multiple-treatment matching; treatment effects;

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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