THREAT EFFECT OF THE LABOUR MARKET PROGRAMS IN DENMARK: EVIDENCE FROM A QUASI-EXPERIMENT

Ott Toomet

No 62, University of Tartu - Faculty of Economics and Business Administration Working Paper Series from Faculty of Economics and Business Administration, University of Tartu (Estonia)

Abstract: This paper analyses the pre-participation effect of the Danish active labour market programs on the welfare recipients. The Danish participation rules differ for “young” and “old” individuals. A reform which increased the age boundary between “young” and “old”is used to identify the effect of the “threat” of active labour market program participation before the actual participation starts. We use a register-based dataset and focus on the transition intensity out of welfare. We show that the reform led to a 25% increase in early exit rate for men, which corresponds to effect of halving the benefits. There is no indication that the reform led to exits elsewhere than employment or to lower-quality jobs. The impact on women is smaller, statistically not significant, and partially related to movements to education. There is some evidence that the effect is related to the arrival of specific information (anticipation effect) and it is limited to a number of compliers only.

JEL-codes: J64 J68 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2008
New Economics Papers: this item is included in nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:mtk:febawb:62

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