Optimal Use of Labour Market Policies
Labour market policies for the unemployed combine passive income support with active measures that aim at improving jobseekers' employment prospects. This paper extends the theoretical framework developed by Pavoni and Violante (2005a) for the optimal choice between different active and passive policies for the unemployed to a setting which allows for the use of a job search assistance programme that affects the exit rate to employment by raising search effectiveness but not productivity in the job. These programmes are one of the most widely used activation measures in OECD countries and should, therefore, be taken into account when considering the optimal design of labour market policies. The enriched model allows to answer a wide range of interesting policy questions. It is used to assess the optimality of the West German policy in the period 2000-2002 as well as the benefits from introducing tight monitoring. It is shown that sizeable budget savings could have been realised by switching to the optimal scheme, but that the net gains from monitoring are only small. In addition, some interesting results on the optimal use of job search assistance and training are derived. It is shown that existing policies already share some but not all features of the optimal scheme.
|Date of creation:||Jul 2007|
|Date of revision:|
|Contact details of provider:|| Postal: Dufourstrasse 50, CH - 9000 St.Gallen|
Phone: +41 71 224 23 25
Fax: +41 71 224 31 35
Web page: http://www.seps.unisg.ch/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Markus Frölich & Michael Lechner & Heidi Steiger, 2003.
"Statistically Assisted Programme Selection - International Experiences and Potential Benefits for Switzerland,"
Swiss Journal of Economics and Statistics (SJES),
Swiss Society of Economics and Statistics (SSES), vol. 139(III), pages 311-331, September.
- Frölich, Markus & Lechner, Michael & Steiger, Heidi, 2003. "Statistically assisted programme selection - International experiences and potential benefits for Switzerland," Working Paper Series 2004:1, IFAU - Institute for Evaluation of Labour Market and Education Policy.
- Rajeev H. Dehejia & Sadek Wahba, 1998.
"Propensity Score Matching Methods for Non-experimental Causal Studies,"
NBER Working Papers
6829, National Bureau of Economic Research, Inc.
- Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity Score-Matching Methods For Nonexperimental Causal Studies," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 151-161, February.
- Lechner, Michael & Smith, Jeffrey A., 2003.
"What is the Value Added by Caseworkers?,"
IZA Discussion Papers
728, Institute for the Study of Labor (IZA).
- Lechner, Michael & Smith, Jeffrey, 2003. "What is the Value Added by Caseworkers?," CEPR Discussion Papers 3825, C.E.P.R. Discussion Papers.
- Michael Lechner & Jeffrey Smith, 2003. "What is the Value Added by Caseworkers?," University of St. Gallen Department of Economics working paper series 2003 2003-05, Department of Economics, University of St. Gallen.
- Michael Lechner & Jeffrey Smith, 2003. "What is the Value Added by Caseworkers?," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 20031, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
- Dehejia, Rajeev H., 2005.
"Program evaluation as a decision problem,"
Journal of Econometrics,
Elsevier, vol. 125(1-2), pages 141-173.
- Michael Gerfin & Michael Lechner, 2002.
"A Microeconometric Evaluation of the Active Labour Market Policy in Switzerland,"
Royal Economic Society, vol. 112(482), pages 854-893, October.
- 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).
- Lechner, Michael, 2004.
"Sequential Matching Estimation of Dynamic Causal Models,"
IZA Discussion Papers
1042, Institute for the Study of Labor (IZA).
- Michael Lechner, 2004. "Sequential Matching Estimation of Dynamic Causal Models," University of St. Gallen Department of Economics working paper series 2004 2004-06, Department of Economics, University of St. Gallen.
- Hirano, Keisuke & Porter, Jack, 2006.
"Asymptotics for statistical treatment rules,"
1173, University Library of Munich, Germany.
- Christopher Phelan & Ennio Stacchetti, 2001.
"Sequential Equilibria in a Ramsey Tax Model,"
Econometric Society, vol. 69(6), pages 1491-1518, November.
- Alberto Abadie & Guido W. Imbens, 2006. "Large Sample Properties of Matching Estimators for Average Treatment Effects," Econometrica, Econometric Society, vol. 74(1), pages 235-267, 01.
When requesting a correction, please mention this item's handle: RePEc:usg:dp2007:2007-26. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joerg Baumberger)
If references are entirely missing, you can add them using this form.