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The Effect of Active Labour Market Programmes and Benefit Sanctions on Reducing Unemployment Duration

Nisar Ahmad (), Michael Svarer () and Amjad Naveed
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Nisar Ahmad: Sultan Qaboos University

Journal of Labor Research, 2019, vol. 40, issue 2, No 4, 202-229

Abstract: Abstract The purpose of this paper is to simultaneously investigate whether the active labour market programmes (ALMPs) and the imposition of benefit sanctions help unemployed insured workers in Denmark to find a job sooner than those who do not get any activation. Earlier studies have modelled ALMPs and benefit sanctions separately, which may have resulted in over- or underestimation of the true effect. As part of our empirical methodology, we used a multivariate mixed proportional hazard model and optimally selected the number of support points for the specification of unobserved heterogeneity distribution in our sample. Our results revealed that the impositions of both benefit sanctions and employment subsidies in the private sector have a positive impact on reducing unemployment duration. Some policy implications are drawn.

Keywords: Sanctions; Competing risks; Unemployment insurance; Timing-of-events; MMPH (search for similar items in EconPapers)
JEL-codes: C14 C15 C41 J64 J65 J68 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s12122-019-09288-x

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