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Department of Economics, Copenhagen Business School Working Paper Series, Department of Economics, Copenhagen Business School

No 14-2000:
DOES ACTIVE LABOUR MARKET POLICY REDUCE UNEMPLOYMENT WHEN SEARCH IS ENDOGENOUS?

Trine Filges and Birthe Larsen

Abstract: We analyse the effects active labour market programmes (ALMPs) have on unemployment in a union wage-setting framework when search is endogenous. We assume that a union president, elected by majority voting determines the wage. We analyse the case where ALMPs increase match efficiency of the marginalized workers, and show that ALMPs may increase unemployment.

Keywords: Endogenous Search; Active Labour Market Policy; Unemployment; (follow links to similar papers)

JEL-Codes: J41; J64; J68; (follow links to similar papers)

29 pages, September 1, 2000

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