Compulsion in Active Labour Market Programs

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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.
Original languageUndefined/Unknown
Publication statusPublished - 2007
Externally publishedYes

Bibliographical note

Subsequently published in National Institute Economic Review, 2007 Pagination: 26

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