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Compulsion in active labour market programmes

Published online by Cambridge University Press:  26 March 2020

Jan C. van Ours
Jan C. van Ours*
Affiliation:
Department of Economics and CentER, Tilburg University, Department of Economics, University of Melbourne, IZA and CEPR
*
e-mail: vanours@utv.nl
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Abstract

This paper examines compulsion in active labour market programmes (ALMP). When an unemployed worker has to participate in a programme in order to remain eligible for benefits there are two seperate effects. First, there is the treatment effect, i.e. the programme 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 programme 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 post-unemployment job. The treatment effect improves the quality; the compulsion effect lowers the quality of post-unemployment jobs.

Keywords

Compulsionactive labour market policiesJ64J68
Type
Articles
Information
National Institute Economic Review , Volume 202 , October 2007 , pp. 67 - 78
Copyright
Copyright © 2007 National Institute of Economic and Social Research

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