Some Econometric Evidence on the Effectiveness of Active Labour Market Programmes in East Germany

In this paper we summarise our previous results on the effectiveness of different kinds of labour market training programmes as well as employment programmes in East Germany after unification. All the studies use the microeconometric evaluation approach and are based on different types of matching estimators. We find some positive earnings effect for on-the-job training and also some positive employment effects for employment programmes. No such effects appear for public sector sponsored (off-the-job) training programmes. Generally, the scope of such analysis is very much hampered by the insufficient quality and quantity of the data available for East Germany. Although in particular the results for public sector sponsored training programmes raise serious doubts about the effectiveness of these programmes, any definite policy conclusion from this and other studies about active labour market policy in East Germany would probably be premature.http://deepblue.lib.umich.edu/bitstream/2027.42/39702/3/wp318.pd

Heterogeneous Employment Effects of Job Search Programmes: A Machine Learning Approach

We systematically investigate the effect heterogeneity of job search programmes for unemployed workers. To investigate possibly heterogeneous employment effects, we combine non-experimental causal empirical models with Lasso-type estimators. The empirical analyses are based on rich administrative data from Swiss social security records. We find considerable heterogeneities only during the first six months after the start of training. Consistent with previous results of the literature, unemployed persons with fewer employment opportunities profit more from participating in these programmes. Furthermore, we also document heterogeneous employment effects by residence status. Finally, we show the potential of easy-to-implement programme participation rules for improving average employment effects of these active labour market programmes

The Effects of Active Labour Market Policies for Immigrants Receiving Social Assistance in Denmark

We estimate the effect of active labour market programmes on the exit rate to regular employment for non-western immigrants in Denmark who receive social assistance. We use the timing-of-events duration model and rich administrative data. We find large positive post-programme effects, and, surprisingly, even most in-programme effects are positive. The effects are largest for subsidized employment programmes, but effects are also large and significant for direct employment programmes and other programmes. The effects are larger if programmes begin after six months of unemployment. Implications of our estimates are illustrated by calculating effects on the duration to regular employment over a five-year period.programme evaluation, duration analysis, timing-of-events model

Swedish active labour market programmes in the 1990s: overall effectiveness and differential performance

The 'Swedish model' of active labour market programmes is investigated in relation to some crucial institutional features with two aims: examining how successful it has been in the context of the high unemployment atypically experienced by Sweden in the 1990s and trying to derive some general lessons as to which type of programme works best. The effectiveness of the programmes in improving the labour market prospects of unemployed participants is assessed in terms of their impact on individual employment probability and collection of unemployment benefits over time. The evidence as to the overall effectiveness of the programmes is rather mixed, with individuals joining a programme subsequently enjoying higher employment rates but also a higher probability of drawing unemployment benefits over time than if they had searched longer in open unemployment. The renewed eligibility to unemployment compensation following participation in a programme appears to be a most critical driving force behind these results. In fact, when comparing the programme effects for individuals entitled to unemployment benefits to the programme effects for non-entitled individuals, the positive effect on participants' employment prospects disappears, being instead replaced by a much higher probability of benefit collection. Still, the various programmes may have differential effects, making it interesting to quantify the relative performance of the six main types of Swedish programmes that were available to adult unemployed workers entitled to unemployment benefits in the 1990s: labour market training, workplace introduction, work experience placement, relief work, trainee replacement and employment subsidies. The best performer is by far employment subsidies, followed by trainee replacement. The main finding that those programmes most similar to regular employment rank unambiguously highest has however to be appraised in the light of the macroeconomic literature, which has documented large and negative displacement and dead-weight effects exactly for these types of programme

Do Labour Market Programmes Necessarily Crowd out Regular Employment? A Matching Model Analysis

It is often claimed that the usage of labour market programmes will necessarily crowd out regular employment (see, for example, Holmlund & Lindén (1993)). As a result, it could be argued that, despite their probable negative impact on unemployment, the overall benefits of using labour market programmes may in fact be dubious. In this paper, we show that the usage of labour market programmes need not necessarily crowd out regular employment. On the contrary; we find that there is the possibility of crowding in regular employment, thereby reducing total unemployment. This can be strengthened by using labour market programmes in conjunction with a strict unemployment benefit policy.matching;labour market;labour policy;employment

Does Active Labour Market Policy Work? Lessons from the Swedish Experiences

The Swedish experiences of the 1990s provide a unique example of how large-scale active labour market programmes (ALMPs) have been used as a means to fight high unemployment. This paper discusses the mechanisms through which ALMPs affect (un)employment and surveys the empirical studies of the effects of ALMPs in Sweden. The main conclusions are: (i) there is hardly any evidence for a positive effect on matching efficiency; (ii) there are some indications of positive effects on labour force participation; (iii) subsidised employment seems to cause displacement of regular employment, whereas this appears not to be the case for labour market training; (iv) it is unclear whether or not ALMPs raise aggregate wage pressure in the economy; (v) in the 1990s, training programmes seem not to have enhanced the employment probabilities of participants, whereas some forms of subsidised employment seem to have had such effects; and (vi) youth programmes seem to have caused substantial displacement effects at the same time as the gains for participants appear uncertain. On the whole, ALMPs have probably reduced open unemployment, but also reduced regular employment. The overall policy conclusion is that ALMPs of the scale used in Sweden in the 1990s are not an efficient means of employment policy. To be effective, ALMPs should be used on a smaller scale. There should be a greater emphasis on holding down long-term unemployment in general and a smaller emphasis on youth programmes. ALMPs should not be used as a means to renew unemployment benefit eligibility.Active; Labour; Market; Policy

Employment and the labour market

Since 1997, there have been changes in rates of employment, unemployment and inactivity. These changes have coincided with the Labour government's "Making Work Pay" agenda, which has seen the introduction of in-work tax credits, the national minimum wage and various New Deal programmes. Section 2 gives details of how the rates of employment, unemployment and economic inactivity have changed under the Labour government. Section 3 begins by detailing the national minimum wage and presents evidence on its impact, and continues in a somewhat similar vein, analysing the New Deal programmes and in-work tax credits. In Section 4, we show how financial work incentives have changed since 1997, and we briefly analyse the employment proposals of the main parties in Section 5. Finally, Section 6 concludes

Rethinking Public Employment Programmes: Moving Beyond Safety Nets?

Public works and public employment programmes (PEPs) have long been considered a staple of social assistance. For the most part, though, they have been designed as ?safety nets? in the context of counter-cyclical programme interventions and responses to shocks. In some cases they have also focused on reducing poverty or addressing structural unemployment challenges over the longer term, but they have seldom been implemented on a scale that would make a dent in structural poverty. Recent advances in conceptualising and implementing scalable PEPs suggest that these programmes also have a broader development role to play. (...)Rethinking Public Employment Programmes: Moving Beyond Safety Nets?

Entering and leaving employment in deprived neighbourhoods undergoing area regeneration

Concentrations of worklessness have been persistent in the UK for several decades but have not been tackled effectively by policy. An individualised approach to unemployment has existed, alongside employment policies without a strong geographical component. A reliance on area-based regeneration programmes has shifted from a property-led to a holistic approach, with the potential to address a range of factors associated with employment. To gauge the effectiveness and appropriateness of holistic area regeneration, this paper uses longitudinal survey data to examine movements into and out of employment for people living in deprived areas of Glasgow with concentrated worklessness and subject to area regeneration. There were modest net gains to employment over time in the study areas, and such gains were positively associated with traditional elements of regeneration such as housing improvements and community empowerment. However, other components of regeneration assumed to aid employment, such as social networks and participation in training, were found to have no effect. Other factors that were associated both with entering or leaving employment feature less frequently within regeneration programmes and require more integration into future approaches, particularly increasing physical activity among populations, helping people cope with physical and mental health issues, and improving transport and mobility