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Active Labour Market Programmes, Education and Unemployment

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    The paper formalises the interaction between active labour market programmes and ordinary higher education in a general equilibrium framework. Both education in prorgammes and ordinary higher education serve to increase the supply of high-skilled labour. The model features a dual labour market where wages and employment are determined by labour-demand and wage-setting schedules. Programmes are shown to have crowding-out effects on both regular employment and the number of students in ordinary higher education. Numerical calibrations of the model show that social welfare is lower in an economy with educational programmes than in an economy without such programmes.

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    Paper provided by Stockholm University, Department of Economics in its series Research Papers in Economics with number 2001:11.

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    Length: 26 pages
    Date of creation: 12 Jun 2001
    Handle: RePEc:hhs:sunrpe:2001_0011
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    Department of Economics, Stockholm, S-106 91 Stockholm, Sweden

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