Scandinavian Working Papers in Economics
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Department of Economics, Stockholm University Research Papers in Economics, Department of Economics, Stockholm University

No 2001:11:
Active Labour Market Programmes, Education and Unemployment

Yoshihiko Fukushima ()

Abstract: The paper formalises the interaction between active labour market programmes and ordinary higher education in a general equilibrium framework. Both education in prorgammes and ordinary higher education serve to increase the supply of high-skilled labour. The model features a dual labour market where wages and employment are determined by labour-demand and wage-setting schedules. Programmes are shown to have crowding-out effects on both regular employment and the number of students in ordinary higher education. Numerical calibrations of the model show that social welfare is lower in an economy with educational programmes than in an economy without such programmes.

Keywords: Active labour market programme; education; unemployment; dual labour market; welfare; (follow links to similar papers)

JEL-Codes: J31; J41; J64; J68; R13; (follow links to similar papers)

26 pages, June 12, 2001

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