Compulsion in active labour market programmes

Jan van Ours

National Institute Economic Review, 2007, vol. 202, issue 1, 67-78

Abstract: This paper examines compulsion in active labour market programmes (ALMP). When an unemplyed worker has to participate in a programme in order to remain eligible for benefits there are two seperate effects. First, there is the treatment effect, i.e. the programme makes the worker more attractive for a potential employer or makes search more efficient, thus helping the unemployed worker to find a job more quickly. Second, there is the compulsion effect, i.e. because the worker has to attend the programme his value of being unemployed drops and h is stimulated and a job more quickly. So, both effects induce the worker to find a job more quickly. The difference between the treatment effect and the compulsion effect concerns the quality of the post-unemployment job. The treatment effect improves the quality; the compulsion effect lowers the quality of post-unemplooyment jobs.

Keywords: compulsion; active labour market policies (search for similar items in EconPapers)
Date: 2007
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