Is there a Threat Effect of Labour Market Programmes? A Study of ALMP in the Danish UI System

Lars Pico Geerdsen

103 citations0/0 files storedThe Economic Journal

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Labor market dynamics and wage inequality Gender, Labor, and Family Dynamics Employment and Welfare Studies

Abstract

This article focuses on unemployed individuals’ reaction to compulsory labour market programmes prior to participation. In Denmark, after having received UI benefits for a given period of time, continued benefits are made conditional on participation in a labour market programme. I estimate individuals’ reaction to compulsory programmes using legislative changes in the duration of benefits period as identification. I find that compulsory programmes do indeed motivate individuals to find employment prior to participation. The effect is large and is even comparable in size to the effect of benefits exhaustion found in studies of American UI systems.

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References

1999The Economics and Econometrics of Active Labor Market Programs 1984A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data 1983Sociological Methodology 1982 1988Unemployment Insurance And Unemployment Spells 1990Unemployment Insurance and Unemployment Spells 1996Labor Supply Response to the Earned Income Tax Credit 1995Labor Supply Response to the Earned Income Tax Credit 1990The impact of the potential duration of unemployment benefits on the duration of unemployment

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2010The Effect of Sanctions on Exit from Unemployment: Evidence from Denmark 2007Danish Labour Market Activation Policies 2007Benefit shifting: The case of sickness insurance for the unemployed 2012Effects of eligibility screening in the sickness insurance: Evidence from a field experiment 2012Early Interventions and Disability Insurance: Experience from a Field Experiment

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