DP6521 Does the Order and Timing of Active Labour Market Programmes Matter?

Author(s): Michael Lechner, Stephan Wiehler
Publication Date: October 2007
Keyword(s): Active Labour market policy, matching estimation, panel data, programme evaluation
JEL(s): J68
Programme Areas: Labour Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=6521

This paper extends the traditional focus of active labour market policy evaluation from a static comparison of participation in a programme versus nonparticipation (or participation in another programme) to the evaluation of the effects of programme sequences, i.e. multiple participation or timing of such programmes. We use a dynamic evaluation framework that explicitly allows for dynamic selection into different stages of such sequences based on past intermediate outcomes to analyze multiple programmes, the timing of programmes, and the order of programmes. The analysis is based on exceptionally comprehensive data on the Austrian labour force. Our findings suggest that (i) active job search programmes are more effective after a qualification programme compared to the reverse order, that (ii) multiple participations in qualification measures dominates single participation, and that (iii) the effectiveness of specific labour market programmes deteriorates the later they start during an unemployment spell.