The Effect of Active Labor Market Programs on Not-Yet Treated Unemployed Individuals

Gerard van den Berg, Annette Bergemann and Marco Caliendo

Journal of the European Economic Association, 2009, vol. 7, issue 2-3, 606-616

Abstract: Labor market programs may affect unemployed individuals' behavior before they enroll. Such ex ante effects are hard to identify without model assumptions. We develop a novel method that relates self-reported perceived treatment rates and job-search behavioral outcomes, like the reservation wage, to each other, among newly unemployed workers. Job search theory is used to derive theoretical predictions. To deal with effect heterogeneity and selectivity, the effects of interest are estimated by propensity score matching. We apply the method to the German active labor market program system, using a novel data set including self-reported assessments of the variables of interest as well as unusually detailed information on behavior, attitudes, and past outcomes. We find that the system generates a negative ex ante effect on the reservation wage and a positive effect on search effort. (JEL: J64, C21, D83, D84) (c) 2009 by the European Economic Association.

JEL-codes: C21 D83 D84 J64 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (47)

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Working Paper: The effect of active labor market programs on not-yet treated unemployed individuals (2008)
Working Paper: The Effect of Active Labor Market Programs on Not-Yet Treated Unemployed Individuals (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:tpr:jeurec:v:7:y:2009:i:2-3:p:606-616

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