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Evaluating Job Search Programs for Old and Young Individuals: Heterogeneous Impact on Unemployment Duration

  • Luis Centeno
  • Mário Centeno
  • Álvaro A. Novo

This paper exploits an area-based pilot experiment to identify average treatment effects on unemployment duration of treated individuals of two active labor market programs implemented in Portugal. We focus on the short-term heterogeneous impact on two subpopulations of unemployed individuals: young (targeted by the Inserjovem program) and old (targeted by the Reage program). We show that the latter program has a small and positive impact (reduction) on unemployment duration of workers finding a job upon participation, whereas the impact of Inserjovem is generally negative (extended durations). These results are robust to a wide variety of constructions of quasi-experimental settings and estimators. The identification of heterogeneous effects showed that the program results were less satisfactory for young workers, for those over 40 and for the less educated. Women also benefited less from the programs. The results seem to improve slightly for young workers in the 2nd semester of implementation, but they deteriorate in the medium term. The lack of wage subsidies in the Portuguese programs may explain the minor impacts obtained, when compared to similar programs

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Paper provided by Banco de Portugal, Economics and Research Department in its series Working Papers with number w200806.

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Date of creation: 2008
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Handle: RePEc:ptu:wpaper:w200806
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  1. John T. Addison & Mário Centeno & Pedro Portugal, 2004. "Reservation Wages, Search Duration, and Accepted Wages in Europe," Working Papers w200413, Banco de Portugal, Economics and Research Department.
  2. Heckman, J.J. & Hotz, V.J., 1988. "Choosing Among Alternative Nonexperimental Methods For Estimating The Impact Of Social Programs: The Case Of Manpower Training," University of Chicago - Economics Research Center 88-12, Chicago - Economics Research Center.
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  4. Heckman, James J. & Robb, Richard Jr., 1985. "Alternative methods for evaluating the impact of interventions : An overview," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 239-267.
  5. LaLonde, Robert J, 1986. "Evaluating the Econometric Evaluations of Training Programs with Experimental Data," American Economic Review, American Economic Association, vol. 76(4), pages 604-20, September.
  6. van den Bergh, Gerhard & van deer Klaauw, Bas, 2001. "Counseling and monitoring of unemployed workers: theory and evidence from a controlled social experiment," Working Paper Series 2001:12, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  7. 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).
  8. Eberwein, Curtis & Ham, John C. & LaLonde, Robert J., 2002. "Alternative methods of estimating program effects in event history models," Labour Economics, Elsevier, vol. 9(2), pages 249-278, April.
  9. Laura Larsson, 2003. "Evaluation of Swedish Youth Labor Market Programs," Journal of Human Resources, University of Wisconsin Press, vol. 38(4).
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  11. James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998. "Characterizing Selection Bias Using Experimental Data," Econometrica, Econometric Society, vol. 66(5), pages 1017-1098, September.
  12. 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.
  13. Barbara Sianesi, 2004. "An Evaluation of the Swedish System of Active Labor Market Programs in the 1990s," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 133-155, February.
  14. A. Smith, Jeffrey & E. Todd, Petra, 2005. "Does matching overcome LaLonde's critique of nonexperimental estimators?," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 305-353.
  15. repec:cup:cbooks:9780521437899 is not listed on IDEAS
  16. Bonnal, Liliane & Fougere, Denis & Serandon, Anne, 1997. "Evaluating the Impact of French Employment Policies on Individual Labour Market Histories," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 683-713, October.
  17. Alex Bryson & Richard Dorsett & Susan Purdon, 2002. "The use of propensity score matching in the evaluation of active labour market policies," LSE Research Online Documents on Economics 4993, London School of Economics and Political Science, LSE Library.
  18. Richard Blundell & Monica Costa Dias, 2000. "Evaluation methods for non-experimental data," Fiscal Studies, Institute for Fiscal Studies, vol. 21(4), pages 427-468, January.
  19. Mário Centeno & Álvaro A. Novo, 2007. "Identifying Unemployment Insurance Income Effects with a Quasi-Natural Experiment," Working Papers w200710, Banco de Portugal, Economics and Research Department.
  20. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November.
  21. Charles Michalopoulos & Howard S. Bloom & Carolyn J. Hill, 2004. "Can Propensity-Score Methods Match the Findings from a Random Assignment Evaluation of Mandatory Welfare-to-Work Programs?," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 156-179, February.
  22. Augurzky, Boris & Schmidt, Christoph M., 2001. "The Propensity Score: A Means to An End," IZA Discussion Papers 271, Institute for the Study of Labor (IZA).
  23. Heckman, James J & Ichimura, Hidehiko & Todd, Petra E, 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 605-54, October.
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