Scandinavian Working Papers in Economics
Working Paper Series,
Uppsala University, Department of Economics
No 1999:22: Direct Displacement Effects of Labour Market Programmes: The Case of Sweden
Matz Dahlberg () and Anders Forslund ()
Additional contact information
Matz Dahlberg: Department of Economics, Postal: Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden
Anders Forslund: Office of Labour Market Policy Evaluation (IFAU), Postal: P.O. Box 513, SE-751 20 Uppsala, Sweden
Abstract: Using a panel of 260 Swedish municipalities over the period 1987-1996, this paper investigates the direct displacement effects of active labour market programmes (ALMPs). Compared to earlier studies on this topic, we have more and better data. From our GMM estimations, we find that (i) there are direct displacement effects from those ALMPs that generate subsidised labour (in the order of approximately 65 percent), but there seems to be no (significant) displacement effects from training, (ii) most ALMPs seem to increase labour force participation, and (iii) the adjustment to the optimal level of employment seems to be sluggish. A consequence of (ii) is that the earlier studies have overstated the displacement effects (since they normalised with the labour force).
Keywords: Labour market programmes; Displacement effects; GMM estimation
JEL-codes: J30
40 pages, October 15, 1999
Full text files
1999wp22.pdf
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