DP2451 The Impact Of Active Labour Market Policies And Benefit Entitlement Rules On The Duration Of Unemployment

Author(s): Rafael Lalive, Jan C. van Ours, Josef Zweimüller
Publication Date: May 2000
Keyword(s): active labour market policy, Benefit Entitlement, Bivariate Duration Model, Treatment Effect
JEL(s): C14, C41, I38, J64
Programme Areas: Labour Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=2451

We evaluate the effect of active labour market programs on the duration of unemployment in a reward or punish system. In Switzerland, unemployment benefits are conditional upon program attendance after 7 months of unemployment duration. In the evaluation we allow for selectivity affecting the inflow into programs. Our results indicate that (i) After ALMP-participation the transition rate to jobs increases for Swiss women but not for Swiss men. However, the job hazard rate is strongly reduced during participation. Taken together, this leads to the conclusion that programs prolong unemployment duration for men, but tend to shorten duration for women. (ii) Once the unemployment spell approaches the expiration of unconditional benefit entitlement the job-hazard rate increases strongly, both for women and for men. (iii) We do not find important selectivity effects, neither for males, nor females.