The Locking-In Effect of Subsidized Jobs
Posted: 16 Aug 2004
Recent evaluations of the effectiveness of active labor market policies in bringing unemployed people back to work are not optimistic. After entering such a program, unemployed people tend to become locked-in to a temporary job so that they reduce their search for a regular job. This paper uses an administrative dataset on durations of individual unemployment spells to analyze temporary subsidized jobs. By exploiting the variation in the duration of these jobs, we investigate the importance of the locking-in effect.
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