Active Labor Market Programs and Reservation Wages: Its a Hazard

Kenneth Sørensen

Economics Working Papers from Department of Economics and Business Economics, Aarhus University

Abstract: Using a randomized controlled trial, this paper shows that positive earnings effects of labor market programs might be driven by an employment and/or a wage effect. The findings of this paper suggest that treated individuals in a high-intense scheme are more prone to have lowered short- term reservation wages compared to non-treated and thus accepts lower wages. In a less intense scheme with use of private providers, treated individuals are more likely to have gained formal human capital accumulation, and thereby raised reservation wages, which again might give rise to long-lasting effects.

Keywords: Active labor market programs; randomized controlled trial; hourly wages; mixed proportional hazard models (search for similar items in EconPapers)
JEL-codes: C41 J31 J64 (search for similar items in EconPapers)
Pages: 10
Date: 2015-12-21
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:aah:aarhec:2015-27

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