Working Paper Series
IFAU - Institute for Evaluation of Labour Market and Education Policy
The impact of active labor market programs on municipal services
Abstract: Just like any other employer, the municipalities can
engage participants in active labor market programs in their activities.
Does this possibility affect the output of municipal services? In order to
answer this question a measure for output of locally provided schooling is
created using factor analysis methods. It turns out that this measure is
preferable to the traditionally used variable; spending. The possibility
for municipalities to engage participants in active labor market programs
in their activities seems to have a negative effect on the price for
schooling. Prices, in turn, have a positive impact on output of schooling.
Taken together, these results indicate that participants in active labor
market programs contribute to production and that these contributions are
not neutralized by displacement effects.
Keywords: Local public services; factor analysis methods; active labor market programs; (follow links to similar papers)
JEL-Codes: C23; H42; H70; (follow links to similar papers)
33 pages, January 14, 2003
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