Scandinavian Working Papers in Economics

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

No 2016:15: Screening through activation: differential effects of a youth activation programme

Caroline Hall (), Kaisa Kotakorpi , Linus Liljeberg () and Jukka Pirttilä
Additional contact information
Caroline Hall: IFAU - Institute for Evaluation of Labour Market and Education Policy, Postal: Institute for Evaluation of Labour Market and Education Policy, P O Box 513, SE-751 20 Uppsala, Sweden
Kaisa Kotakorpi: University of Turku, CESifo, Postal: Finland
Linus Liljeberg: IFAU - Institute for Evaluation of Labour Market and Education Policy, Postal: Institute for Evaluation of Labour Market and Education Policy, P O Box 513, SE-751 20 Uppsala, Sweden
Jukka Pirttilä: UNU-WIDER, University of Tampere, CESifo, Postal: Finland

Abstract: We study the anatomy of responses to a major activation programme targeted at unemployed youth, introduced in Sweden in 2007. We use a regression discontinuity design to analyse individual reactions to the programme. We find that individuals who have a relatively high predicted probability of finding a job respond to the threat of activation, whereas there is no significant effect for individuals in a weaker labour market position. This is consistent with activation programmes working as a screening device between those who are able to find work on their own vs. those who are not. In addition to examining traditional predictors of poor labour market outcomes (e.g. education and school dropout status), we find a strong concentration of health problems among individuals with poor labour market prospects. We use register data covering the entire Swedish population, including very detailed information on health.

Keywords: activation; unemployment; health; school drop-outs

JEL-codes: I10; J64; J68

62 pages, September 15, 2016

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