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Macroeconomic Effects of Active Labour Market Policies: A Novel Instrumental Variables Approach

Ulrike Unterhofer, Conny Wunsch

arXiv 22 Nov 2022 · Econometrics · 1 citations (OpenAlex)

arXiv:2211.12437 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This study evaluates the macroeconomic effects of active labour market policies (ALMP) in Germany over the period 2005 to 2018. We propose a novel identification strategy to overcome the simultaneity of ALMP and labour market outcomes at the regional level. It exploits the imperfect overlap of local labour markets and local employment agencies that decide on the local implementation of policies. Specifically, we instrument for the use of ALMP in a local labour market with the mix of ALMP implemented outside this market but in local employment agencies that partially overlap with this market. We find no effects of short-term activation measures and further vocational training on aggregate labour market outcomes. In contrast, wage subsidies substantially increase the share of workers in unsubsidised employment while lowering long-term unemployment and welfare dependency. Our results suggest that negative externalities of ALMP partially offset the effects for program participants and that some segments of the labour market benefit more than others.

Citation extraction

91
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in-text mentions
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distinct cited
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appendix boundary found by appendix_command · 69% of the source is main text. Read the extracted text to check this.

Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Card, Kluve and Weber (2018) What works? A meta analysis of recent active labor market program evaluations1.00053100%
2Wapler, Werner and Wolf (2018) Active labour market policies in Germany: do regional labour markets benefit?0.84333100%
3Kropp and Schwengler (2016) Three-Step Method for Delineating Functional Labour Market Regions0.8115280%
4Biewen, Fitzenberger, Osikominu and Paul (2014) The Effectiveness of Public-Sponsored Training Revisited: The Importance of Data and Methodological Choices0.81142100%
5Calmfors (1994) Active Labour Market Policy and Unemployment - A Framework for the Analysis of crucial Design Features0.81142100%
6Dahlberg and Forslund (2005) Direct Displacement Effects of Labour Market Programmes0.81142100%
Calmfors2002unmatched citation key Calmfors20020.73732100%
Crepon2013unmatched citation key Crepon20130.73732100%
9Fertig, Kluve and Schmidt (2006) Die makroökonomische Wirkung aktiver Arbeitsmarktpolitik - eine Panelanalyse auf Ebene regionaler Arbeitsmärkte0.73732100%
10Osikominu (2013) Quick Job Entry or Long-Term Human Capital Development? The Dynamic Effects of Alternative Training Schemes0.73732100%

Showing the top 10 of 98 scored citations. 2 of these could not be matched to a bibliography entry, so only the citation key is shown.