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Asymmetric Effects of National-based Active Labour Market Policies

  • Carlo Altavilla

    ()

    (University of Naples Parthenope, CESifo and CSEF)

  • Floro Ernesto Caroleo

    ()

    (University of Naples Parthenope)

Labour market policies settled at national level imply a “one-size-fits-all” labour market strategy. This strategy might not sufficiently take into account region-specific economic structures. We employ a panel factor-augmented vector autoregression (FAVAR) to evaluate whether active labour market programmes (ALMPs) might asymmetrically affect labour markets at regional level in a data-rich environment. The paper focuses on Italian regions. Our results suggest that while in the South employment is mainly driven by social and economic context variables, in the North the employment dynamics is significantly explained by policy interventions. Finally, we suggest two main policy implications. First, the success of active policies depends on the regional labour market conditions. Second, policymakers should adjust labour policy strategy to the regional economic structure

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Paper provided by Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy in its series CSEF Working Papers with number 293.

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Date of creation: 25 Oct 2011
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Publication status: Published in Regional Studies, 2013, 47(9), 1482-150
Handle: RePEc:sef:csefwp:293
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