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Active and passive labour-market policies: the outlook from the Beveridge curve

Author

Listed:
  • Sergio Destefanis

    (Dipartimento di Scienze Economiche e Statistiche, Università degli Studi di Salerno)

  • Matteo Fragetta

    (Dipartimento di Scienze Economiche e Statistiche, Università degli Studi di Salerno)

  • Nazzareno Ruggiero

    (Dipartimento di Scienze Economiche e Statistiche, Università degli Studi di Salerno)

Abstract

We appraise the impact of various indicators of active and passive labour-market policies within the framework of the Beveridge curve across 14 OECD countries from 1985 to 2013, controlling for a wide spectrum of other factors, both institutional (tax wedge, employment protection legislation) and structural (technological progress, globalisation). We embed the role of all these variables within the specification of the Beveridge curve, avoiding the potential pitfalls of two-step approaches. We find that the generosity of unemployment benefits has a detrimental impact on labour-market matching, with the duration of benefits taking a key role in driving this result. Among active labour-market policies, employment incentives and especially training have a favourable effect on matching. There is also some evidence of a virtuous interaction between active and passive policies. A significantly detrimental role emerges for the tax wedge. These results are consistent across various specifications, and structural relationships are stable throughout the 2008–2013 period.

Suggested Citation

  • Sergio Destefanis & Matteo Fragetta & Nazzareno Ruggiero, 2020. "Active and passive labour-market policies: the outlook from the Beveridge curve," Working Papers 3_239, Dipartimento di Scienze Economiche e Statistiche, Università degli Studi di Salerno, revised Jun 2020.
    • Handle: RePEc:sep:wpaper:3_239
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    More about this item

    Keywords

    Unemployment; vacancies; training; unemployment benefits;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • F60 - International Economics - - Economic Impacts of Globalization - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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