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The Impact of Active Labor Market Programs and Benefit Entitlement Rules on the Duration of Unemployment

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  • Lalive, Rafael

    () (University of Lausanne)

  • van Ours, Jan C.

    () (Erasmus University Rotterdam)

  • Zweimüller, Josef

    () (University of Zurich)

Abstract

Swiss policy makers created a unique link between unemployment benefits and Active Labor Market Programs (ALMPs) by making benefit payments conditional on program attendance after 7 months of unemployment duration. We evaluate the effect of Active Labor Market Programs and benefit entitlement on the duration of unemployment in Switzerland. In the evaluation we allow for selectivity affecting the inflow into programs. Our results indicate that (i) After ALMP-participation the transition rate to jobs increases for Swiss women but not for Swiss men. However, the job hazard rate is strongly reduced during participation. Taken together, this leads to the conclusion that programs prolong unemployment duration for men, but tend to shorten durations for women. (ii) Once the unemployment spell approaches the expiration of unconditional benefit entitlement the job-hazard rate increases strongly, both for women and for men. (iii) There are important selectivity effects for Swiss females, but not for Swiss males.

Suggested Citation

  • Lalive, Rafael & van Ours, Jan C. & Zweimüller, Josef, 2000. "The Impact of Active Labor Market Programs and Benefit Entitlement Rules on the Duration of Unemployment," IZA Discussion Papers 149, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp149
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    References listed on IDEAS

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    Cited by:

    1. Schenk-Hoppe, Klaus Reiner & Schmalfu[ss], Bjorn, 2001. "Random fixed points in a stochastic Solow growth model," Journal of Mathematical Economics, Elsevier, vol. 36(1), pages 19-30, September.
    2. van Ours, Jan C., 2003. "Is cannabis a stepping-stone for cocaine?," Journal of Health Economics, Elsevier, vol. 22(4), pages 539-554, July.
    3. repec:iab:iabzaf:v:38:i:2/3:p:396-418 is not listed on IDEAS
    4. Cavaco, Sandra & Fougère, Denis & Pouget, Julien, 2005. "Estimating the Effect of a Retraining Program for Displaced Workers on Their Transition to Permanent Jobs," IZA Discussion Papers 1513, Institute for the Study of Labor (IZA).
    5. Michael Gerfin & Michael Lechner, 2002. "A Microeconometric Evaluation of the Active Labour Market Policy in Switzerland," Economic Journal, Royal Economic Society, vol. 112(482), pages 854-893, October.
    6. Reinhard Hujer & Stephan Thomsen & Christopher Zeiss, 2006. "The effects of vocational training programmes on the duration of unemployment in Eastern Germany," AStA Advances in Statistical Analysis, Springer;German Statistical Society, vol. 90(2), pages 299-321, June.
    7. Werner Eichhorst & Klaus F. Zimmermann, 2007. "And Then There Were Four...How Many (and Which) Measures of Active Labor Market Policy Do We Still Need?," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 53(3), pages 243-272.
    8. 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.
    9. Bruno Crépon & Marc Ferracci & Denis Fougere, 2012. "Training the Unemployed in France: How Does it Affect Unemployment Duration and Recurrence?," Annals of Economics and Statistics, GENES, issue 107-108, pages 175-199.
    10. Bocean, Claudiu George, 2007. "The Impact of Active Labour Market Policies in Romania," MPRA Paper 10397, University Library of Munich, Germany.
    11. van Ours, Jan C., 2004. "The locking-in effect of subsidized jobs," Journal of Comparative Economics, Elsevier, pages 37-55.
    12. Werner Eichhorst & Klaus F. Zimmermann, 2007. "And Then There Were Four ...: How Many (and Which) Measures of Active Labor Market Policy Do We Still Need? ; Finding a Balance after the Evaluation of the Hartz Reforms in Germany," Discussion Papers of DIW Berlin 685, DIW Berlin, German Institute for Economic Research.
    13. Jochen Kluve & Christoph M. Schmidt, 2002. "Can training and employment subsidies combat European unemployment?," Economic Policy, CEPR;CES;MSH, vol. 17(35), pages 409-448, October.
    14. Michael Lechner, 2002. "Eine wirkungsorientierte aktive Arbeitsmarktpolitik in Deutschland und der Schweiz: Eine Vision - zwei Realitäten," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 3(2), pages 159-174, May.
    15. Michael White and Genevieve Knight, 2003. "Benchmarking the effectiveness of NDYP: A review of European and US literature on the microeconomic effects of labour market programmes for young people," PSI Research Discussion Series 10, Policy Studies Institute, UK.
    16. Konle-Seidl, Regina, 2005. "Lessons learned: Internationale Evaluierungsergebnisse zu Wirkungen aktiver und aktivierender Arbeitsmarktpolitik," IAB-Forschungsbericht 200509, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    17. Sandra Cavaco & Denis Fougère & Julien Pouget, 2013. "Estimating the effect of a retraining program on the re-employment rate of displaced workers," Empirical Economics, Springer, pages 261-287.
    18. Eichhorst, Werner & Zimmermann, Klaus F., 2007. "Dann waren's nur noch vier… Wie viele (und welche) Maßnahmen der aktiven Arbeitsmarktpolitik brauchen wir noch? Eine Bilanz nach der Evaluation der Hartz-Reformen," IZA Discussion Papers 2605, Institute for the Study of Labor (IZA).
    19. Lalive, Rafael & Zweimuller, Josef, 2004. "Benefit entitlement and unemployment duration: The role of policy endogeneity," Journal of Public Economics, Elsevier, vol. 88(12), pages 2587-2616, December.
    20. Michael Lechner, 2002. "Mikroökonometrische Evaluation arbeitsmarktpolitischer Massnahmen," University of St. Gallen Department of Economics working paper series 2002 2002-20, Department of Economics, University of St. Gallen.
    21. Caliendo, Marco & Steiner, Viktor, 2005. "Aktive Arbeitsmarktpolitik in Deutschland : Bestandsaufnahme und Bewertung der mikroökonomischen Evaluationsergebnisse (Active labour market policy in Germany * review ans assessment of the microecono," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 38(2/3), pages 396-418.
    22. Gerfin, Michael & Lechner, Michael, 2001. "A Microeconometric Evaluation of Active Labour Market Policy in Switzerland," CEPR Discussion Papers 2993, C.E.P.R. Discussion Papers.
    23. Viktor Steiner & Tobias Hagen, 2002. "Was kann die Aktive Arbeitsmarktpolitik in Deutschland aus der Evaluationsforschung in anderen europäischen Ländern lernen?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 3(2), pages 189-206, May.
    24. Hägglund, Pathric, 2007. "Are there pre-programme effects of Swedish active labour market policies? Evidence from three randomised experiments," Working Paper Series 2/2007, Stockholm University, Swedish Institute for Social Research.

    More about this item

    Keywords

    bivariate duration model; Active labor market policy; benefit entitlement; treatment effect;

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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