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Competence Centre on Microeconomic Evaluation - Tools

Identifying effect heterogeneity to improve the efficiency of job creation schemes in Germany

Previous empirical studies of job creation schemes (JCS) in Germany have shown that the average effects for the participating individuals are negative. However, we find that this is not true for all strata of the population. Identifying individual characteristics that are responsible for the effect heterogeneity and using this information for a better allocation of individuals therefore bears some scope for improving programme efficiency. We present several stratification strategies and discuss the occurring effect heterogeneity.

Evaluation of Swedish Youth Labor Market Programs

A nonparametric matching approach is applied to estimate the average effects of two active labor market programs for youth in Sweden: youth practice and labor market training. The results of the evaluation indicate either zero or negative effects of both programs on earnings, employment probability, and the probability of entering education in the short run, whereas the long-run effects are mainly zero or slightly positive. The results also suggest that youth practice was more effective - or less harmful - than labor market training.

Disentangling Treatment Effects of Active Labor Market Policies: The Role of Labor Force Status Sequences

This paper estimates treatment effects of two active labor market policies - a training program and a wage subsidy scheme - on participants' employment probabilities. The analysis is based on unique data from the 18th wave of the Polish Labor Force Survey containing detailed and extensive individual labor force status histories. We discuss two variants of an exact covariate matching procedure adapted to the specific nature of the data. Our study confirms and reinforces a point raised in recent research [Heckman, J.J., Smith, J.A.

Employment subsidies. A fast lane from unemployment to work?

The treatment effect of a Swedish employment subsidy is estimated using exact covariate-matching and instrumental variables methods. Our estimates suggest that the programme had a positive treatment effect for the participants.We also show how non-parametric methods can be used to estimate the time profile of treatment effects as well as how to estimate the effect of entering the programme at different points in time in the unemployment spell. Our main results are derived using matching methods.

Can Training Programs or Rather Wage Subsidies Bring the Unemployed Back to Work? A Theoretical and Empirical Investigation for Germany

Our paper investigates the relative effects of wage subsidies and further vocational training on the subsequent employment prospects of previously unemployed program participants. First, we outline a theoretical approach based on a firm's hiring decision. For the relative effectiveness of both labor market programs the assumption concerning the formation of human capital is crucial and leads to competing hypotheses for the medium and long term. On the assumption that wage subsidies have no effect on human capital they improve individuals employment prospects less than training programs.

Do Long-Term Unemployed Workers Benefit from Targeted Wage Subsidies?

We evaluate a wage subsidy program that is targeted at long-term unemployed workers in Germany. We use an alternative identification procedure compared to empirical studies conducted so far. Exploiting the particular program regulations and large administrative data we estimate the impact of program availability using a regression discontinuity framework. Our results suggest no significant impact of the availability of the subsidy on labor market outcomes of the target group.

Direct job creation revisited: Is it effective for welfare recipients and does it matter whether participants receive a wage?

Bringing welfare recipients into jobs is a major goal of German labour market policy since a reform of the year 2005. Direct job creation providing participants with tem-porary subsidized jobs mainly in the non-profit sector plays an important role for achieving this goal. There are three schemes that differ only with respect to a few features: traditional job creation schemes, One-Euro-Jobs and work opportunities subsidising contributory jobs.

New evidence on the effects of job creation schemes in Germany: a matching approach with threefold heterogeneity

This paper evaluates the effects of job creation schemes on the participating individuals in Germany. The very informative dataset at hand justifies the application of a matching estimator and allows to take account of threefold heterogeneity. The recently developed multiple treatment framework is used to evaluate the effects with respect to regional and individual heterogeneity as well as to differences in the programme sectors. The results show considerable differences with respect to these sources of heterogeneity, but the overall finding is very clear.

The Relative Effectiveness of Selected Active Labor Market Programs: An Empirical Investigation for Germany

For Germany, we estimate the relative effectiveness of training programs and job creation schemes. We pay particular attention to problems of common support that may arise in cross-program comparisons. Furthermore, we show that the use of different outcome variables may lead to different conclusions. In particular, the group of participants in job creation schemes may be too different from training participants to conduct a reliable comparison. Participants in shorter training programs spend more time in employment than those in longer programs; this is mainly due to less lock-in effects.

Evaluation of subsidized employment programs for long-term unemployed in Bulgaria

Bulgaria's transition to a market economy has been remarkably slow and painful. Difficulties that can affect the labor markets of transition economies have all occurred in Bulgaria. Sharp declines in employment, high unemployment, low turnover among the unemployed and increasing long-term unemployment are characterizing for the Bulgarian labor market after 1989. In order to reduce adverse effects of unemployment, the Bulgarian government introduced a broad array of active labor market programs (ALMPs) in the early 1990s.

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