Scandinavian Working Papers in Economics
Working Paper Series,
IFAU - Institute for Evaluation of Labour Market and Education Policy
No 2020:20: Side effects of labor market policies
Marco Caliendo (), Robert Mahlstedt (), Gerard van den Berg () and Johan Vikström ()
Additional contact information
Marco Caliendo: University of Potsdam, Postal: University of Potsdam
Robert Mahlstedt: University of Copenhagen, Postal: University of Copenhagen, Denmark
Gerard van den Berg: University of Bristol, Postal: University of Bristol
Johan Vikström: 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
Abstract: Labor market policy tools such as training and sanctions are commonly used to help bring workers back to work. By analogy to medical treatments, the individual exposure to these tools may have side effects. We study effects on health using individual-level population registers on labor market events outcomes, drug prescriptions and sickness absence, comparing outcomes before and after exposure to training and sanctions. We find that training improves cardiovascular and mental health and lowers sickness absence. The results suggest that this is not due to improved employment prospects but rather to instantaneous features of participation such as, perhaps, the adoption of a more rigorous daily routine. Unemployment benefits sanctions cause a short-run deterioration of mental health, possibly due higher stress levels, but this tapers out quickly.
Keywords: Unemployment; health; sickness; prescriptions; mental health; drugs; training; depression; cardiovascular disease; sanctions
37 pages, November 17, 2020
Full text files
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