Do Early Active Labor Market Policies Improve Outcomes of Not-Yet-Unemployed Workers? Findings from a Randomized Field Experiment

Gerard J. van den Berg (), Gesine Stephan () and Arne Uhlendorff
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Gerard J. van den Berg: University of Groningen
Gesine Stephan: Institute for Employment Research (IAB), Nuremberg

No 17612, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Inequality is a dynamic phenomenon, and the relative and absolute positions of individuals are subject to frequent shocks. It is important to know if preventive interventions mitigate adverse inequality effects of labor market shocks. We consider individuals up to three months before the envisaged termination of their employment and we study effects of pre-unemployment participation in active labor market programs (ALMP) on labor market outcomes using a randomized controlled trial (RCT). This complements the vast literature on ALMP for unemployed workers. Policies include signing an integration agreement (IA), preparing an action plan (AP) before the first meeting with a caseworker, and the combination of both. Results suggest that the IA - particularly when combined with the AP - increases the probability of employment around 4 months after registration as soon-to-be unemployed. This is driven by workers with a relatively high unemployment risk following registration. Thus, the policies contribute to reducing societal inequality.

Keywords: inequality; unemployment; work; job-to-job transitions; integration agreements; action plans; randomized controlled trial; job search; monitoring; counseling; machine learning (search for similar items in EconPapers)
JEL-codes: C93 J64 J68 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2025-01
New Economics Papers: this item is included in nep-exp and nep-lab
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