Estimating the Threat Effect of Active Labour Market Programmes

Univ. of Aarhus Economics Working Paper No. 2004-06

41 Pages Posted: 18 Jun 2008

See all articles by Michael Rosholm

Michael Rosholm

Aarhus University - Department of Economics and Business Economics; IZA Institute of Labor Economics; Amternes og Kommunernes Forskningsinstitut (AKF)

Michael Svarer

Aarhus University - Department of Economics and Business Economics; Institute for the Study of Labor (IZA)

Multiple version iconThere are 2 versions of this paper

Date Written: August 25, 2004

Abstract

We combine two techniques to consistently estimate the effect of active labour market programmes and, in particular, active labour market policy regimes. Our aim is to explicitly estimate the threat effect of active labour market programmes. Based on Danish data (1998-2002) from administrative registers we find a strong and significantly positive threat effect. The threat effect is shown to reduce average unemployment duration by approximately three weeks. The implications of this result are discussed.

Keywords: Active labour market policy, Threat effect, Timing-of-events, Duration model

JEL Classification: C41, J64

Suggested Citation

Rosholm, Michael and Svarer, Michael, Estimating the Threat Effect of Active Labour Market Programmes (August 25, 2004). Univ. of Aarhus Economics Working Paper No. 2004-06, Available at SSRN: https://ssrn.com/abstract=1147569 or http://dx.doi.org/10.2139/ssrn.1147569

Michael Rosholm (Contact Author)

Aarhus University - Department of Economics and Business Economics ( email )

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Aarhus V
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+45 89 42 15 59 (Phone)
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IZA Institute of Labor Economics

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Germany

Amternes og Kommunernes Forskningsinstitut (AKF)

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Copenhagen, DK-1602
Denmark

Michael Svarer

Aarhus University - Department of Economics and Business Economics ( email )

Universitetsparken
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DK-8000 Aarhus C
Denmark
+45 8942 1598 (Phone)
+45 8613 6334 (Fax)

Institute for the Study of Labor (IZA)

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Bonn, D-53072
Germany

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