Compulsion in Active Labour Market Programs

CentER Discussion Paper Series No. 2007-74

27 Pages Posted: 3 Oct 2007

See all articles by Jan C. van Ours

Jan C. van Ours

Tilburg University - Department of Economics; University of Melbourne - Department of Economics

Date Written: September 2007

Abstract

This paper is on compulsion in active labour market programs (ALMP). When an unemployed worker has to participate in a programme order to remain eligible for benefits there are two separate effects. First, there is the treatment effect, i.e. the program makes the worker more attractive for a potential employer or makes search more efficient thus helping the unemployed worker to find a job more quickly. Second, there is the compulsion effect, i.e. because the worker has to attend the program his value of being unemployed drops and he is stimulated to find a job more quickly. So, both effects induce the worker to find a job more quickly. The difference between the treatment effect and the compulsion effect concerns the quality of the postunemployment job. The treatment effect improves the quality; the compulsion effect lowers the quality of postunemployment jobs.

Keywords: compulsion, active labour market policies

JEL Classification: J64, J68

Suggested Citation

van Ours, Jan C., Compulsion in Active Labour Market Programs (September 2007). Available at SSRN: https://ssrn.com/abstract=1018928 or http://dx.doi.org/10.2139/ssrn.1018928

Jan C. Van Ours (Contact Author)

Tilburg University - Department of Economics ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 2880 (Phone)
+31 13 466 3042 (Fax)

University of Melbourne - Department of Economics ( email )

Melbourne, 3010
Australia

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