Scandinavian Working Papers in Economics

Working Paper Series,
IFAU - Institute for Evaluation of Labour Market and Education Policy

No 2001:2: The relative efficiency of labor market programs: Swedish experience from the 1990's

Kenneth Carling () and Katarina Richardson ()
Additional contact information
Kenneth Carling: IFAU - Office of Labour Market Policy Evaluation, Postal: Labour Market Policy Evaluation, P O Box 513, SE-751 20 Uppsala, Sweden
Katarina Richardson: IFAU - Office of Labour Market Policy Evaluation, Postal: Labour Market Policy Evaluation, P O Box 513, SE-751 20 Uppsala, Sweden

Abstract: This paper estimates the relative efficiency of eight Swedish labor market programs in reducing the unemployment duration for participants. The analysis uses a hazard regression model and a uniquely large and rich administrative data set that contains all adult workers who became unemployed during 1995-1997. We find that programs in which the participants obtain subsidized work experience and training provided by firms, have better outcome than classroom vocational training. The relative efficiency is similar across demographic and skill groups and independent of the timing of the placement. A careful examination of the assignment process to programs reveals no self-selection, but substantial administrative-selection. However, the administrative-selection appears to be unrelated to the outcome and, thus, should not bias the results.

Keywords: Empirical Bayes methods; Employment duration; Program evaluation; Proxy variables; Selection bias; Simulations

JEL-codes: C14; C24; J64; J68; J69

37 pages, March 9, 2001

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