Scandinavian Working Papers in Economics

Working Papers,
University of Aarhus, Aarhus School of Business, Department of Economics

No 11-4: The Relative Efficiency of Active Labour Market Policies: Evidence From a Social Experiment and Non-Parametric Methods

Johan Vikström (), Michael Rosholm () and Michael Svarer ()
Additional contact information
Johan Vikström: IFAU-Uppsala
Michael Rosholm: Department of Economics, Aarhus School of Business, Postal: FRICHSHUSET , Hermodsvej 22, 1st and 2nd floors , DK 8230 Aabyhoej, Denmark
Michael Svarer: Department of Economics, Aarhus School of Business, Postal: FRICHSHUSET , Hermodsvej 22, 1st and 2nd floors , DK 8230 Aabyhoej, Denmark

Abstract: We re-analyze the effects of a Danish active labour market program social experiment, that included a range of sub-treatments, including monitoring, job search assistance and training. Previous studies have shown that the overall effect of the experiment is positive. We apply newly developed non-parametric methods to determine which of the individual policies that explains the positive effect. The use of non-parametric methods to separate sub-treatment effects is important from a methodological point of view, since the alternative, namely parametric/distributional assumptions, is in conflict with the concept of experimental evidence. Our results are highly relevant in a policy perspective, as optimal labour market policy design requires knowledge on the effectiveness of specific policy measures

Keywords: Active labour market policy; treatment effect; non-parametric bounds

JEL-codes: C14; C41; C93

38 pages, March 13, 2011

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11-04_rom.pdf PDF-file 

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