An Evaluation of the Swedish Active Labor Market Policy: New and Received Wisdom

59 Pages Posted: 30 Sep 2009 Last revised: 18 Aug 2010

See all articles by Anders Forslund

Anders Forslund

IFAU - Institute for Labour Market Policy Evaluation; Uppsala University

Alan B. Krueger

Princeton University - Industrial Relations Section; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Date Written: July 1994

Abstract

About 3% of GNP is spent on government labor market programs in Sweden, compared to 2% in Germany and less than 0.5% in the U.S. In Sweden these programs include extensive job training, public sector relief work, recruitment subsidies, youth programs, mobility bonuses, and unemployment benefits. Using county-level data, we provide new evidence that public relief workers displace other workers, especially in the construction sector. Our review of the previous literature suggests that job training programs have small effects on wages and re-employment in Sweden, but precise inferences are difficult because of small sample sizes. We also investigate alternative reasons for the stability of the Beveridge Curve in Sweden, and compare regional evolutions of employment and unemployment in Sweden and the U.S. Lastly, we present cross-country analysis for 1993 which, contrary to studies that use earlier data, shows that the extent of a country's active labor market programs is positively associated with the national unemployment rate.

Suggested Citation

Forslund, Anders and Krueger, Alan B., An Evaluation of the Swedish Active Labor Market Policy: New and Received Wisdom (July 1994). NBER Working Paper No. w4802. Available at SSRN: https://ssrn.com/abstract=1480524

Anders Forslund (Contact Author)

IFAU - Institute for Labour Market Policy Evaluation ( email )

Box 513
751 20 Uppsala
Sweden
018 471 70 76 (Phone)

Uppsala University ( email )

Uppsala, SE-751 20
Sweden

Alan B. Krueger

Princeton University - Industrial Relations Section ( email )

Princeton, NJ 08544-2098
United States
609-258-4046 (Phone)
609-258-2907 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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