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A Reappraisal of the Virtues of Private Sector Employment Programmes

  • Graversen, Brian Krogh

    ()

    (Danish National Centre for Social Research (SFI))

  • Jensen, Peter

    ()

    (Aarhus University)

In this paper, we evaluate the employment effects of Danish active labour market programmes aimed at welfare benefit recipients. We estimate an econometric model with treatment effects and discrete outcomes and we allow the responses to treatment to vary among observationally identical persons. The empirical analysis is based on a register-based dataset that gives information on participation in labour market programmes and subsequent employment. Using a latent variable model, we estimate commonly defined treatment effects, and in particular, the distribution of treatment effects. We do not find any significant mean effects of participation in private sector employment programmes compared to participation in other programmes, but we find evidence of heterogeneity in the treatment effects.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2230.

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Length: 48 pages
Date of creation: Jul 2006
Date of revision:
Publication status: published in: Scandinavian Journal of Economics, 2010, 112 (3), 546-569
Handle: RePEc:iza:izadps:dp2230
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  1. Joshua D. Angrist & Guido W. Imbens, 1995. "Identification and Estimation of Local Average Treatment Effects," NBER Technical Working Papers 0118, National Bureau of Economic Research, Inc.
  2. Martin, John P. & Grubb, David, 2001. "What works and for whom: a review of OECD countries' experiences with active labour market policies," Working Paper Series 2001:14, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  3. Lechner, Michael & Smith, Jeffrey A., 2003. "What is the Value Added by Caseworkers?," IZA Discussion Papers 728, Institute for the Study of Labor (IZA).
  4. 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.
  5. Gerfin, Michael & Lechner, Michael, 2000. "Microeconometric Evaluation of the Active Labour Market Policy in Switzerland," IZA Discussion Papers 154, Institute for the Study of Labor (IZA).
  6. Markus Frölich & Michael Lechner, 2004. "Regional treatment intensity as an instrument for the evaluation of labour market policies," University of St. Gallen Department of Economics working paper series 2004 2004-08, Department of Economics, University of St. Gallen.
  7. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
  8. Jaap H. Abbring & Gerard J. van den Berg, 2003. "The Nonparametric Identification of Treatment Effects in Duration Models," Econometrica, Econometric Society, vol. 71(5), pages 1491-1517, 09.
  9. Andrén , Daniela & Andrén, Thomas, 2002. "Assessing the Employment Effects of Labor Market Training Programs in Sweden," Working Papers in Economics 70, University of Gothenburg, Department of Economics.
  10. Butler, J S & Moffitt, Robert, 1982. "A Computationally Efficient Quadrature Procedure for the One-Factor Multinomial Probit Model," Econometrica, Econometric Society, vol. 50(3), pages 761-64, May.
  11. Heckman, James J. & Vytlacil, Edward J., 2000. "The relationship between treatment parameters within a latent variable framework," Economics Letters, Elsevier, vol. 66(1), pages 33-39, January.
  12. Bolvig, Iben & Jensen, Peter & Rosholm, Michael, 2003. "The Employment Effects of Active Social Policy," IZA Discussion Papers 736, Institute for the Study of Labor (IZA).
  13. James J. Heckman, 2001. "Micro Data, Heterogeneity, and the Evaluation of Public Policy: Nobel Lecture," Journal of Political Economy, University of Chicago Press, vol. 109(4), pages 673-748, August.
  14. 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.
  15. Aakvik, Arild & Holmas, Tor Helge & Kjerstad, Egil, 2003. "A low-key social insurance reform--effects of multidisciplinary outpatient treatment for back pain patients in Norway," Journal of Health Economics, Elsevier, vol. 22(5), pages 747-762, September.
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