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Are Active Labour Market Programmes Least Effective Where They Are Most Needed? The Case of the British New Deal for Young People

Author

Listed:
  • Duncan McVicar

    () (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Jan M. Podivinsky

    (Economics Division, The University of Southampton)

Abstract

One view of Active Labour Market Programmes (ALMPs) is that they are 'most needed in slack labour markets, where more unemployed workers require help finding jobs. But ALMPs might be less effective in such labour markets because there are fewer vacancies with which programme participants can match. In this paper we use data over a nine year period, across 300 local labour markets, to show that the unemployment exit and job entry impacts of participating in a mandatory ALMP for unemployed young people – the British New Deal for Young People (NDYP) – were negatively correlated with unemployment rates.

Suggested Citation

  • Duncan McVicar & Jan M. Podivinsky, 2010. "Are Active Labour Market Programmes Least Effective Where They Are Most Needed? The Case of the British New Deal for Young People," Melbourne Institute Working Paper Series wp2010n16, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  • Handle: RePEc:iae:iaewps:wp2010n16
    as

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    File URL: http://melbourneinstitute.unimelb.edu.au/downloads/working_paper_series/wp2010n16.pdf
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    References listed on IDEAS

    as
    1. Michael Lechner & Conny Wunsch, 2009. "Are Training Programs More Effective When Unemployment Is High?," Journal of Labor Economics, University of Chicago Press, vol. 27(4), pages 653-692, October.
    2. Dorsett, Richard, 2006. "The new deal for young people: effect on the labour market status of young men," Labour Economics, Elsevier, vol. 13(3), pages 405-422, June.
    3. Richard Blundell & Monica Costa Dias & Costas Meghir & John Van Reenen, 2004. "Evaluating the Employment Impact of a Mandatory Job Search Program," Journal of the European Economic Association, MIT Press, vol. 2(4), pages 569-606, June.
    4. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier.
    5. John P Martin, 1998. "What Works Among Active Labour Market Policies: Evidence from OECD Countries' Experiences," RBA Annual Conference Volume,in: Guy Debelle & Jeff Borland (ed.), Unemployment and the Australian Labour Market Reserve Bank of Australia.
    6. Jensen, Peter & Rosholm, Michael & Svarer, Michael, 2003. "The response of youth unemployment to benefits, incentives, and sanctions," European Journal of Political Economy, Elsevier, vol. 19(2), pages 301-316, June.
    7. Rebecca M. Blank, 2002. "Evaluating Welfare Reform in the United States," Journal of Economic Literature, American Economic Association, vol. 40(4), pages 1105-1166, December.
    8. repec:nsr:niesrd:183 is not listed on IDEAS
    9. Giacomi De Giorgi, 2005. "Long-term effects of a mandatory multistage program: the New Deal for young people in the UK," IFS Working Papers W05/08, Institute for Fiscal Studies.
    10. Aakvik, Arild & Heckman, James J. & Vytlacil, Edward J., 2005. "Estimating treatment effects for discrete outcomes when responses to treatment vary: an application to Norwegian vocational rehabilitation programs," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 15-51.
    11. Dan A. Black & Jeffrey A. Smith & Mark C. Berger & Brett J. Noel, 2003. "Is the Threat of Reemployment Services More Effective Than the Services Themselves? Evidence from Random Assignment in the UI System," American Economic Review, American Economic Association, vol. 93(4), pages 1313-1327, September.
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    Citations

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    Cited by:

    1. Carlo Altavilla & Floro Ernesto Caroleo, 2013. "Asymmetric Effects of National-based Active Labour Market Policies," Regional Studies, Taylor & Francis Journals, vol. 47(9), pages 1482-1506, October.
    2. Yin Fok & Duncan McVicar, 2013. "Did the 2007 welfare reforms for low income parents in Australia increase welfare exits?," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-21, December.
    3. Marco Caliendo & Steffen Künn, 2014. "Regional Effect Heterogeneity of Start-up Subsidies for the Unemployed," Regional Studies, Taylor & Francis Journals, vol. 48(6), pages 1108-1134, June.

    More about this item

    Keywords

    Active Labour Market Programmes; New Deal for Young People; unemployment; evaluation; heterogeneous effects;

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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