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Do Firms Benefit from Active Labour Market Policies?

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  • Lechner, Michael

    ()

  • Wunsch, Conny

    ()

  • Scioch, Patrycja

Abstract

This paper investigates the link between variation in the supply of workers who participate in specific types of active labour market policies (ALMPs) and firm performance using a new exceptionally informative German employer-employee data base. For identification we exploit that German local employment agencies (LEAs) have a high degree of autonomy in determining their own mix of ALMPs and that firms' hiring regions overlap only imperfectly with the areas of responsibility of the LEAs. Our results indicate that in general firms do not benefit from ALMPs and in some cases may even be harmed by certain programs, in particular by sub¬sidized employment and longer training programs. These findings complement the negative assessment of the cost-effectiveness of ALMPs from the empirical literature on the effects for participants.

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File URL: http://ux-tauri.unisg.ch/RePEc/usg/econwp/EWP-1318.pdf
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Paper provided by University of St. Gallen, School of Economics and Political Science in its series Economics Working Paper Series with number 1318.

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Length: 43 pages
Date of creation: Sep 2013
Date of revision:
Handle: RePEc:usg:econwp:2013:18
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Keywords: Subsidized employment programs; training programs; regional variation; program evaluation;

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Find related papers by JEL classification:
  • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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  1. van den Berg, Gerard J. & Bergemann, Annette & Caliendo, Marco, 2008. "The effect of active labor market programs on not-yet treated unemployed individuals," Working Paper Series 2008:26, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  2. David Card & Jochen Kluve & Andrea Weber, 2009. "Active Labor Market Policy Evaluations: A Meta-analysis," CESifo Working Paper Series 2570, CESifo Group Munich.
  3. Michael Rosholm & Michael Svarer, 2008. "The Threat Effect of Active Labour Market Programmes," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(2), pages 385-401, 06.
  4. Lechner, Michael & Miquel, Ruth & Wunsch, Conny, 2005. "The Curse and Blessing of Training the Unemployed in a Changing Economy: The Case of East Germany After Unification," IZA Discussion Papers 1684, Institute for the Study of Labor (IZA).
  5. Snower, Dennis J, 1994. "Converting Unemployment Benefits into Employment Subsidies," American Economic Review, American Economic Association, vol. 84(2), pages 65-70, May.
  6. Schuenemann, Benjamin & Lechner, Michael & Wunsch, Conny, 2011. "Do Long-term Unemployed Workers Benefit from Targeted Wage Subsidies," Economics Working Paper Series 1126, University of St. Gallen, School of Economics and Political Science.
  7. Markus Frölich & Michael Lechner, 2006. "Exploiting regional treatment intensity for the evaluation of labour market policies," CeMMAP working papers CWP11/06, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  8. Miquel, Ruth & Lechner, Michael & Wunsch, Conny, 2005. "Long-Run Effects of Public Sector Sponsored Training in West Germany," ZEW Discussion Papers 05-02, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  9. Graversen, Brian Krogh & van Ours, Jan C., 2008. "How to help unemployed find jobs quickly: Experimental evidence from a mandatory activation program," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 2020-2035, October.
  10. Sylvie Blasco & Barbara Pertold-Gebicka, 2012. "Employment Policies, Hiring Practices and Firm Performance," Working Papers 2012-27, Centre de Recherche en Economie et Statistique.
  11. Dan A. Black & Jeffrey A. Smith & Mark C. Berger & Brett J. Noel, 2003. "Is the Threat of Reemployment Services More Effective Than the Services Themselves? Evidence from Random Assignment in the UI System," American Economic Review, American Economic Association, vol. 93(4), pages 1313-1327, September.
  12. Matz Dahlberg & Anders Forslund, 2005. "Direct Displacement Effects of Labour Market Programmes," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(3), pages 475-494, 09.
  13. Geerdsen, Lars Pico & Holm, Anders, 2007. "Duration of UI periods and the perceived threat effect from labour market programmes," Labour Economics, Elsevier, vol. 14(3), pages 639-652, June.
  14. Bernhard, Sarah & Gartner, Hermann & Stephan, Gesine, 2008. "Wage subsidies for needy job-seekers and their effect on individual labour market outcomes after the German reforms," IAB Discussion Paper 200821, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  15. Huber, Martin & Lechner, Michael & Wunsch, Conny, 2013. "The performance of estimators based on the propensity score," Journal of Econometrics, Elsevier, vol. 175(1), pages 1-21.
  16. Imbens, Guido W. & Wooldridge, Jeffrey M., 2008. "Recent Developments in the Econometrics of Program Evaluation," IZA Discussion Papers 3640, Institute for the Study of Labor (IZA).
  17. Lars Pico Geerdsen, 2006. "Is there a Threat Effect of Labour Market Programmes? A Study of ALMP in the Danish UI System," Economic Journal, Royal Economic Society, vol. 116(513), pages 738-750, 07.
  18. Sianesi, Barbara, 2008. "Differential effects of active labour market programs for the unemployed," Labour Economics, Elsevier, vol. 15(3), pages 370-399, June.
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Cited by:

  1. Sylvie Blasco & Barbara Pertold-Gebicka, 2012. "Employment Policies, Hiring Practices and Firm Performance," Working Papers 2012-27, Centre de Recherche en Economie et Statistique.

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