Side Effects of Labor Market Policies

Marco Caliendo, Robert Mahlstedt (), Gerard J. van den Berg () and Johan Vikström ()
Additional contact information
Robert Mahlstedt: University of Copenhagen
Gerard J. van den Berg: University of Groningen

No 13846, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Labor market policy tools such as training and sanctions are commonly used to help bring workers back to work. By analogy to medical treatments, the individual exposure to these tools may have side effects. We study effects on health using individual-level population registers on labor market events outcomes, drug prescriptions and sickness absence, comparing outcomes before and after exposure to training and sanctions. We find that training improves cardiovascular and mental health and lowers sickness absence. The results suggest that this is not due to improved employment prospects but rather to instantaneous features of participation such as, perhaps, the adoption of a more rigorous daily routine. Unemployment benefits sanctions cause a short-run deterioration of mental health, possibly due higher stress levels, but this tapers out quickly.

Keywords: unemployment; health; sickness; prescriptions; mental health; drugs; training; depression; cardiovascular disease; sanctions (search for similar items in EconPapers)
JEL-codes: H51 I12 I18 J68 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2020-11
New Economics Papers: this item is included in nep-hea and nep-lab
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Published - published in: Scandinavian Journal of Economics , 2023, 125 (2), 339 - 375

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Related works:
Journal Article: Side effects of labor market policies (2023)
Working Paper: Side effects of labor market policies (2020)
Working Paper: Side Effects of Labor Market Policies (2020)
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