Working Paper Series
IFAU - Institute for Evaluation of Labour Market and Education Policy
Gerard J. van den Berg
The effect of active labor market programs on not-yet treated unemployed individuals
(), Annette Bergemann and Marco Caliendo
Abstract: Labor market programs may affect unemployed individuals'
behavior before they enroll. Such ex ante effects are hard to identify
without model assumptions. We develop a novel method that relates
self-reported perceived treatment rates and job-search behavioral outcomes,
like the reservation wage, to each other, among newly unemployed workers.
Job search theory is used to derive theoretical predictions. To deal with
effect heterogeneity and selectivity, the effects of interest are estimated
by propensity score matching. We apply the method to the German ALMP
system, using a novel data set including self-reported assessments of the
variables of interest as well as an unusually detailed amount of
information on behavior, attitudes, and past outcomes. We find that the
system generates a negative ex ante effect on the reservation wage and a
positive effect on search effort.
Keywords: Policy evaluation; reservation wage; search effort; expectations; unemployment duration; program evaluation; active labor market policy; identification; (follow links to similar papers)
JEL-Codes: J64; (follow links to similar papers)
20 pages, November 15, 2008
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