Side effects of labor market policies

Marco Caliendo, Robert Mahlstedt, Gerard J. van den Berg and Johan Vikström

Scandinavian Journal of Economics, 2023, vol. 125, issue 2, 339-375

Abstract: Labor market policies, such as training and sanctions, are commonly used to bring workers back to work. By analogy to medical treatments, exposure to these tools can have side effects. We study the effects on health using individual‐level population registers on labor market outcomes, drug prescriptions, and sickness absence, comparing outcomes before and after exposure to training and sanctions. Training improves cardiovascular and mental health, and lowers sickness absence. This is likely to be the result of the instantaneous features of participation, such as the adoption of a more rigorous daily routine, rather than improved employment prospects. Benefits sanctions cause a short‐run deterioration of mental health.

Date: 2023
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https://doi.org/10.1111/sjoe.12514

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