Blache, Guillaume (2008): Active Labour Market Policies in Denmark: A Comparative Analysis of Post-Program Effects.
Download (330Kb) | Preview
The scope of the paper is to estimate post-program effects in fostering good transitions from unemployment to work. Such an issue implies that besides job finding rates, qualitative variables related to work have to be included as well. The evaluation is based on a comprehensive transversal dataset of Danes who ended an activation program in the year 2002, merged with individuals’ profile and retrospective yearly information related to their socioeconomic status, extent of working time and wage level. The control of unobserved heterogeneity and post-program effects are investigated through treatment-effects models. As regards transitions to work and full-time job, main results show fairly large positive effects for private sector employment programs. Smaller positive impacts are found for labour market training and services/sanctions, whereas negative coefficients are assigned to public sector employment programs. All things being equal, the large positive coefficient of the private sector employment programs’ category is the result of its closer link with the “ordinary” labour market which provides “contact effects”. It is worthwhile that job opportunities for private sector employment participants are highly dependent on the business cycle. Besides, this type of programss are submitted to “creaming effects” as unemployed with longer work experience benefit the most from the private sector. The best way to cope with labour shortage is education and training whereas the reduction of public expenditure can be achieved through sanctions programs. The “work first” strategy of this last category of programs is more profitable for the unemployed who benefit from social network. Such a situation leads to “dead-weight effects” thus making public intervention unnecessary. Long-term effects on wages are the most positive for those who where involved into labour market training programs because off the higher return to education in line with human capital theory. Services/sanctions also get fairly positive coefficients for the wage level. Coefficients are not statistically significant for private sector employment programs and are negative for public sector employment. As suggested by previous studies, subsidised programs can indeed be perceived by employers as to be a signal of lower-than-average productivity.
|Item Type:||MPRA Paper|
|Original Title:||Active Labour Market Policies in Denmark: A Comparative Analysis of Post-Program Effects|
|Keywords:||Active labour market policies, treatment-effects models, individual trajectories.|
|Subjects:||C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C52 - Model Evaluation, Validation, and Selection
J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J60 - General
C - Mathematical and Quantitative Methods > C2 - Single Equation Models; Single Variables > C21 - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions
|Depositing User:||Guillaume Blache|
|Date Deposited:||10. Jun 2010 05:36|
|Last Modified:||14. Feb 2013 12:26|
Abbring, J.H., & van den Berg,G.J., (2003), “The non-parametric identification of treatment effects in duration models”. Econometrica, 71: 1491-1571. Albæk, K., Browning, M. & van Audenrode, M., (2002), “Employment protection and the consequences for displaced workers”. In Kuhn.P.J., (eds.), Losing work, moving on - international perspectives on worker displacement. Upjohn Institute for Employment Research. Anderson, K., Burkhauser, R. & Raymond, J., (1993), “The effect of creaming on placement rates under the job training partnership act.” Industrial and Labor Relations Review, 46 (4): 613- 624. Arbejdsministeriet (2000), Effekter af aktiveringsindsatsen. Ministry of Labour, Copenhagen. Ashenfelter, O., (1978), “Estimating the effect of training programs on earnings”. Review of Economics and Statistics, 6:47-57. Atkinson, J., (1984), “Manpower strategies for flexible organizations”. Personnel Management, 16(8): 28-31. Azariadis, C., (1975), “Implicit contracts and underemployment equilibria”. Journal of Political Economy, 83: 1183-1202. Becker, G.S., (1964), Human capital. McGraw-Hill, NY. Bell, H., S. & Orr, L., L (2002), “Screening (and Creaming?) applicants to job training programs”. Labour Economics, 9:279-301. Blache, G., Klindt, M.P. & Møberg, R.J., (2008), “Flexicurity or segmentation on the Danish labour market? an analysis of schooling’s impact upon the flexible patterns of work at the firm level. Aalborg University, research paper. Blache, G., (2007) (1), “Active labour market policies in Denmark: a likelihood-based evaluation of individual trajectories”. CARMA (Centre for Labour Market Research) seminar. Aalborg University, 19 june 2007. Blache, G., (2007) (2), “The Flexibility-Security nexus in Transitional European Labour Market: an empirical analysis”. In Jørgensen, H. & Madsen, P.K, (eds.), Flexicurity and beyond- Finding a new agenda for the European social model. Djøf Publishing, Copenhagen. 277- 306. Black.D, Smith.J, Berger.M. & Noel.B., (2003), “Is the threat of reemployment services more effective than the services themselves? Evidence from random assignment in the UI system”. American Economic Review, 93(4): 1313-1327. Bonnal, L., Fougère, D. & Sérandon, A., (1997), Evaluating the impact of French employment policies on individual labour market histories. Review of Economic Studies, 64: 683-713. Bourguignon, F., Fournier, M. & Gurgand, M., (2007), “Selection bias corrections based on the multinomial logit model: Monte Carlo comparisons”. Journal of Economic Survey, 21 (1): 174-205. Bredgaard, T., Larsen, F. & Madsen, P., (2007) (1), “The challenges of identifying flexicurity in action - A case study on Denmark”. In Jørgensen, H. & Madsen, P.K., (eds.), op.cit. 365- 390. Bredgaard, T., Larsen, F. & Madsen, P., (2007) (2), “Flexicurity: clarifying a moving target”. Tidsskrift for arbejdsliv n°4. Cahuc, P. & Zylberberg, A., (2006), The natural survival of work: job creation and job destruction in a growing economy, The MIT Press. Calmfors, L & Skedinger, P., (1995), “Does Active Labour Market Policy increase employment? Theoretical considerations and some empirical evidence from Sweden”. Oxford Review of Economic Policy, 11(1): 91-109. Causa, O. & Jean, S., (2007), “Integration of immigrants in OECD countries - Do policies matter?”, OECD Economics Department Working Papers, N° 564. Deerden, R. & Van Reenen, J.M, (2006), “The impact of training on productivity and wages: evidence from British panel data”. Oxford Bulletin of Economics and Statistics, 68 (4): 397- 421. Eberwein, C., Ham, J.C. & Lalonde, R.J., (1997), “The impact of being offered and receiving classroom training on the employment histories of disadvantaged women: evidence from experimental data”. Review of Economic Studies, 64: 655-682. Edin, P.A. & Holmlund, B., (1991), “Unemployment, vacancies and labour market Programs: Swedish evidence”. In Padoa Schioppa, F., (ed.) Mismatch and labour mobility. Cambridge University Press. Gerfin, M., Lechner, M. & Steiger, H., (2005), “Does subsidised temporary employment get the unemployed back to work?. An econometric analysis of two different schemes”. Labour Economics, 12:807-835. Geerdsen, L.P., (2002), “Does labour market training motivate job search? A study of incentive effects of compulsory ALMP in the Danish unemployment insurance system”. Socialforskningsinstituttet (SFI). Working Paper, 23:2002. Geerdsen, L.P., (2006), “Is there a threat effect of labour market programs? A study of ALMP in the Danish UI system”. The Economic Journal, 116: 738-750. Greene, W., (2003), Econometric analysis (5th Edition), Prentice Hall Graversen, B.K. & van Ours, J.C., (2005), “How to help unemployed find a jobs quickly: experimental evidence from a mandatory activation program”. Institute for the Study of Labor (IZA), Discussion Paper No 2504. Gimeno, D. & al., (2004), “Psychosocial factors and work related sickness absence among permanent and non-permanent employees”. Journal of Epidemiology and Community Health, 58:870-876. Fabbri, D., Monfardini, C. & Radice, R., (2004), ”Testing exogeneity in the bivariate probit model: Monte Carlo evidence and an application to health economics”. Università di Bologna. Dipartimento di Scienze Economiche, Working Paper No 514. Forslund, A. & Krueger, A., (1993), An evaluation of the Swedish active labor market policy: new and received wisdom. Paper presented at the NBER-SNS Conference in Stockholm, December 2-4, 1993. Hansen, L.L., (2007), “From Flexicurity to FlexicArity? Gendered Perspectives on the Danish Model”. Journal of Social Sciences, 3 (2): 88-93. Heckman, J., (2008), “Econometric causality”. Institute for the Study of Labor (IZA), Discussion Paper No 3425. Heckman, J. & Smith,J., (2004), “The determinants of participation in a social program: evidence from a prototypical job training program”. Journal of Labor Economics, 22(4): 243-298. Heckman, J., Lalonde, R.J. & Smith, J.A., (1999), “The economics and econometrics of active labor market policies”. In Ashenfelter, O. & Card, D. (eds.) Handbook of labor economics. Elsevier Science, 3 (31): 1865-2097. Heckman, J., (1979), “Sample selection bias as a specification error”. Econometrica, 47: 153-161 Heckman, J. & Robb, R., (1985), “Alternative methods for evaluating the impact of interventions”. In Heckman, J. & Singer, B., (eds.), Longitudinal Analysis of Labor Market Data. Cambridge University Press, 156-245. Jensen, P., (2007), “Employment and labour market policies for an ageing workforce and initiatives at the workplace - National overview report: Denmark”. Eurofound ef070520. Jensen, P., Pederson, P., Smith, N. & Westcrgard-Nielson, N., (1993), “The effects of labor market training on wages and unemployment: some Danish results”. In Bunze.H, Jensen.P & Westergard-Nielson.H., (eds.), Panel data and labour market dynamics, contributions to economic analysis no. 222 (North Holland, Amsterdam), 311-331. Jørgensen, C., (2000), “Atypical employment grows among highly-qualified”.European Industrial Relations Observatory (EIRO). Korpi, T., (1994), “Escaping unemployment - studies in the individual consequences of unemployment and labor market policy”. Swedish Institute for Social Research, Dissertation Series, n° 24. Kluve, J., (2006), “The effectiveness of European active labor market policy”. Institute for the Study of Labor (IZA), Discussion Paper No 2018. Kluve, J. & Schmidt, C.M., (2002), “Can training and employment subsidies combat European unemployment?”. Economic Policy, 35: 409-448. Kvist, J., (2003), “Scandinavian activation strategies in the 1990s: recasting social citizenship and the Scandinavian welfare model”. Revue Française des Affaires Sociales, (4): 193-222. Lalive, R., van Ours, J.C. & Zweimüller. J., (2008), “The impact of active labour market programs on the duration of unemployment in Switzerland”. The Economic Journal, 118 (525): 235-257. Lalive, R., van Ours, J.C. & Zweimüller. J., (2002), “The effect of benefit sanctions on the duration of unemployment”. IEW Working Paper No. 110, University of Zurich. Langager,K., (1997), Indsatsen for de forsikrede ledige – evaluering af arbejdsmarkedsreformen. Copenhagen: National Institute of Social Research. Layard, R., Jackman, R. & Nickell, S., (1991), Unemployment. Oxford: Oxford University Press. Lechner, M., Miquel, R., & Wunsch, C., (2004), “Long-run effects of public sector sponsored training in west Germany”. Discussion Paper 2004-19. Department of Economics, University of St. Gallen. Maddala,G.,(1983), “Limited-dependent and qualitative variables in econometrics”. Econometric Society Monographs No 3. Cambridge: Cambridge University Press. McFadden, D., (1973), “Conditional logit analysis of quantitative choice behaviour”. In Zarambka, P. (eds.) Frontiers in econometrics. New York: Academic Press. Madsen, P.K., (2005), “The Danish Road to ‘Flexicurity’: Where are we and how did we get there?”. In Bredgaard, T. & Larsen, F., (eds.), Employment policy from different angles. Djøf Publishing, Copenhagen. Martin, J.P. & Grubb, D., (2001), “What works and for whom: a review of OECD countries’ experiences with active labour market policies”. Swedish Economic Policy Review, 8:9-56. Martin, J.C., (2004), “Corporatism from the firm perspective: employers and social policy in Denmark and Britain”. British Journal Political Science, 35:127-148. Martin, J.C. & Swank, D., (2004), “Does the organization of capital matter? Employers and active labor market policy at the national and firm level”. American Political Science Review, 98 (4) : 593-611. Mortensen, D. T., (1977), “Unemployment insurance and job search decisions”. Industrial and Labor Relations Review, 30: 505–517. Munch, J.R & Skipper, L., (2008), “Program participation, labor force dynamics, and accepted wage rates”. Advances in Econometrics, 21: 197-262. Raaum, O., Torp,H. & T. Zhang (2002), “Business cycles and the impact of labour market programs”. University of Oslo. Memorandum. N°14/2002. Richardson, K. & van den Berg, G., (2001), “The effect of vocational employment training on the individual transition rate from unemployment to work”. Swedish Economic Policy Review, 8(2):175-214. Rosholm, M. & Svarer, M., (2004), “Estimating the threat effect of active labour market programs”. Centre for Applied Microeconometrics (CAM), Working paper 2004-14. Rueda, D., (2006), “Social democracy and active labour-market policies: insiders, outsiders and the politics of employment promotion”. British Journal of Political Science, 36: 385-406, Cambridge: Cambridge University Press. Scheele, A., (2002), “Non-permanent employment, quality of work and industrial relations”. European Industrial Relations Observatory (EIRO). Slotz, P., (1997), “Single mothers and the dilemmas of universal social policies”. Journal of Social Policies, 26 (4): 425-433. Schmid, G. and Gazier, B. (2002), The Dynamics of Full Employment. Social Integration Through Transitional Labour Markets. Cheltenham: Edward Elgar. Soidre, T., (2004), “Unemployment risks and demands on labour-market flexibility: an analysis of attitudinal patterns in Sweden”. International Journal of Social Welfare, 13 (2): 124- 133. Spence, A.M., (1973), “Job market signaling”. Quarterly Journal of Economics, 87 (3): 355-374. Van Ours, J.C., (2004), “The locking-in effect of subsidized jobs”. Journal of Comparative Economics, 32 (1):37-52. Virtanen, P., (2006), “The working conditions and health of non-permanent employees: are there differences between private and public labour markets”. Economic and Industrial Democracy, 27 (1): 39-65. Westergaard-Nielsen, N., (2001), “Danish labour market policy: is it worth it?”. Centre for Labour Market and Social Research, Working paper 01-10. Westergard-Nielsen, N., (1993), “The effects of training: a fixed effect model”. In Jensen, K. & P.K. Madsen, P.K, (eds) Measuring labour market measures (Ministry of Labour, Copenhagen, Denmark):167-200.