Abstract
We investigate active labor market programs in Austria. We find only small effects, if any, for most of the programs. However, the programs may have unintended consequences for women. In particular for younger women, a key effect of the programs and one reason for the male–female effect differential that is observed in the literature is to reduce or postpone pregnancies and to increase their attachment to the labor force. Furthermore, the variables capturing pregnancies and times of parental leave play a key role in removing selection bias.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Notes
For job creation schemes in Switzerland, see Gerfin and Lechner (2002). Similar results appear in Lechner and Wunsch (2006) and in Caliendo et al. (2004, 2006, 2008) for Germany. For wage or integration subsidies in Sweden, see Sianesi (2008) and Forslund et al. (2004) and for Switzerland in Lalive et al. (2008) and Gerfin et al. (2005). For business start-up programs in Sweden, we refer to Carling and Gustafson (1999). For training measures comprising formal qualification, further training of any kind, and retraining, see Richardson and van den Berg (2001) and Carling and Richardson (2004) for Sweden and Gerfin and Lechner (2002) and Hujer et al. (2005) for Switzerland and Germany. Lechner et al. (2009) investigate long-run effects for Germany. Winter-Ebmer and Zweimüller (1996), Hofer and Weber (2004a, b), and Lutz et al. (2005) investigate employment effects for different instruments of the Austrian ALMP.
Bergemann and van den Berg (2006) classify countries to have a low female labor force participation rate if it is at least 10% lower than the male labor force participation rate.
The UB claim, for instance, for a 40-year-old unemployed person, who paid UI contributions for 312 weeks in the last 120 months, is 39 weeks. See the Internet appendix for a summary table of the various exceptions.
Unemployed receive a fixed quota of currently 7.42 euros a day. Multiple births prolong the period after confinement to 12 weeks.
The default entitlement period was 549 days, which could be prolonged between July 2001 and December 2002 to provide a gradual adjustment to the childcare benefit regulations.
If the parents share child care times, the maximum entitlement period is prolonged to 36 months. If they fail to prove regular medical consultations, child care benefits are reduced to 7.27 euros per day. Extra earnings are allowed up to a maximum of 14.600 euros per year without leading to a reduction in benefits.
In case of a business foundation, future workers are trained with specific skills for the new firm. In case of a firm closure, the dismissed are trained to adjust their skills for further employment in a new firm.
For business start-up programs (BSU), qualification for employees (QFE), and integration subsidies (IS), we find decreasing costs per participation over time. BSU are less frequently accompanied by other courses. QFE measures are more and more redesigned into smaller specialized measures. The refund rate of IS, granted to the employers, decreases over time.
All variables that can potentially be used to further distinguish the wide range of qualification measures have bad filling degrees.
Childcare in general is universally available. Our remaining conditioning variables in the propensity score capture their determinants so that there is no problem for the validity of the CIA.
The local labor market data were provided by the Austrian Institute of Economic Research and are merged to the individual unemployed via regional identifiers of the local Public Employment Service office.
Denote this unemployment spell as the “defining UE spell.”
The entire set of variables that are used in the estimation part of this paper is available from the Internet appendix. It covers personal characteristics, like family status, education, last profession, last industry sector, last firm size, last salary, remaining benefit duration at program entry, different aspects of the labor market history, and times of child care, program history, and a set of regional indicators.
The estimation results for all different comparisons can be found in the Internet appendix.
The outcome variable is also listed in the top line of every panel.
Note that we additionally deleted all individuals who received financial support right before the (hypothetical) entry into the program, which had only marginal impact on the population size. See the Internet appendix for details.
Note that it is possible to estimate fairly small effects (below 5% points) due to the larger number of participants in the programs collected in group 2. Such small effects could not be identified non-parametrically before since comparable studies usually rely on (smaller) samples instead of using the population as is done here.
Taking unemployment as the outcome variable, it can be seen for male participants that none of the programs decreases unemployment. Qualification measures even increase unemployment by 4%. For women only, qualification measures and course subsidies decrease unemployment, but only by 1.5% to 2.5%. For further details see, the Internet appendix.
Women receive financial support 8 weeks before a scheduled confinement and for up to 3 years afterwards, as described in Section 2. Since part of this period is counted as contribution times to the pension schemes, we observe them in the social security records.
The respective graphs can be found in the Internet appendix.
In this sense, our study reaffirms the conclusion by Bergemann and van den Berg (2006) that the program effects for women may be larger because of their additional possibilities of moving in and out of non-participation: Parental leave is a classical component of the labor market state “out-of-the-labor force.”
References
Bergemann A, van den Berg G (2006) Active labor market policy effects for women in Europe: a survey. Discussion Paper 2365, Institute for the Study of Labor (IZA)
Caliendo M, Hujer R, Thomsen S (2004) New evidence on the effects of job creation schemes in Germany—a matching approach with threefold heterogeneity. Res Econ 58(4):257–302
Caliendo M, Hujer R, Thomsen S (2006) Sectoral heterogeneity in the employment of job creation schemes in Germany. Jahrb Natlökon Stat 226(2):139–179
Caliendo M, Hujer R, Thomsen S (2008) Identifying effect heterogeneity to improve the efficiency of job creation schemes in Germany. Appl Econ 40(9):1101–1122
Carling K, Gustafson L (1999) Self-employment grants vs. subsidized employment: is there a difference in the re-employment risk?. Working Paper, Institute for Labor Market Policy Evaluation (IFAU)
Carling K, Richardson K (2004) The relative efficiency of labor market programs: Swedish experience from the 1990s. Labor Economics 11(3):335–354
Dehejia R, Wahba S (2002) Propensity score-matching methods for nonexperimental causal studies. Rev Econ Stat 84(1):151–161
Forslund A, Johannson P, Lindqvist L (2004) Employment subsidy—a fast lane from unemployment to work? Working Paper 2004:18, Institute for Labor Market Policy Evaluation (IFAU)
Friedlander D, Greenberg D, Robins P (1997) Evaluating government training programs for the economically disadvantaged. J Econ Lit 35(4):1809–1855
Gerfin M, Lechner M (2002) A microeconometric evaluation of the Swiss active labor market policy. Econ J 112:854–893
Gerfin M, Lechner M, Steiger H (2005) Does subsidized temporary employment get the unemployed back to work? An econometric analysis of two different schemes. Labour Economics—An International Journal 12(6):807–835
Heckman JJ, LaLonde R, Smith J (1999) The economics and econometrics of active labor market programs, vol. III. A of handbook of economics. North-Holland, Amsterdam
Hofer H, Weber A (2004a) Are job search programs a promising tool? A microeconometric evaluation for Austria. Discussion Paper 1075, Institute for the Study of Labor (IZA)
Hofer H, Weber A (2004b) Employment effects of early interventions in job search programs. Discussion Paper 1076, Institute for the Study of Labor (IZA)
Hujer R, Thomsen S, Zeiss C (2005) The effects of vocational training programmes on the duration of unemployment in eastern Germany. Working Paper, Goethe University Frankfurt
Imbens G (2000) The role of the propensity score in estimating dose–response functions. Biometrica 87(3):706–710
Imbens G (2004) Nonparametric estimation of average treatment effects under exogeneity: a review. Rev Econ Stat 86(1):4–29
Joffe M, Ten Have T, Feldman H, Kimmel S (2004) Model selection, confounder control, and marginal structural models. Am Stat 58(4):272–279
Kluve J, Lehmann H, Schmidt C (1999) Active labor market policies in Poland: human capital enhancement, stigmatization, or benefit churning? J Comp Econ 27(1):61–89
Kluve J, Lehmann H, Schmidt C (2008) Disentangling treatment effects of labor market policies: the role of employment histories. Labour Econ 15(6):1270–1295
Lalive R, van Ours J, Zweimüller J (2008) The impact of active labor market programs on the duration of unemployment. Econ J 118(525):235–257
Lechner M (1999) Earnings and employment effects of continuous off-the-job training in East Germany after unification. J Bus Econ Stat 17(1):74–90
Lechner M (2001) Identification and estimation of causal effects of multiple treatments under the conditional independence assumption. Springer, Heidelberg
Lechner M, Wunsch C (2009) Active labour market policy in East Germany: waiting for the economy to take off. The Economics of Transition 17:661–702
Lechner M, Miquel R, Wunsch C (2007) The curse and blessing of training the unemployed in a changing economy: the case of East Germany after unification. Ger Econ Rev 8:468–507
Lechner M, Miquel R, Wunsch C (2009) Long run effects of public sector sponsored training in west Germany. J Eur Econ Assoc (in press)
Lutz H, Mahringer H, Pöschl A (2005) Schwerpunkt 1: Verhinderung und Bekämpfung der Langzeitsarbeitslosigkeit und der Jugendarbeitslosigkeit. WIFO, IHS, L&R: Evaluierung Europäischer Sozialfonds 2000–2006, Ziel 3: Österreich. Wien
Puhani P (1999) Evaluating active labor market policies—empirical evidence for Poland during transition, ZEW Economic Studies 5. Physica, Heidelberg
Richardson K, van den Berg G (2001) The effect of vocational employment training on the individual transition rate from unemployment to work. Swed Econ Policy Rev 8:175–213
Rosenbaum P, Rubin D (1983) The central role of the propensity score in observational studies for causal effects. Biometrica 70:41–55
Rubin D (1974) Estimating causal effects of treatments in randomized and nonrandomized studies. J Educ Psychol 66:668–701
Rubin D (1979) Using multivariate matched sampling and regression adjustment to control bias in observational studies. J Am Stat Assoc 74:318–328
Sianesi B (2008) Differential effects of Swedish active labor market programmes for unemployed. Labour Econ 15(3):370–399
Van Ours J (2004) The locking-in effect of subsidized jobs. J Comp Econ 32(1):37–52
Winter-Ebmer R, Zweimüller J (1996) Manpower training programmes and employment stability. Economica 63(249):113–130
Wunsch C, Lechner M (2008) What did all the money do? On the general ineffectiveness of recent West German labour market programmes, Kyklos: International Review for Social Sciences 134–174
Acknowledgements
Financial support by the Austrian Federal Ministry of Economics and Labor (BMWA) and by the European Commission is gratefully acknowledged. We benefited from many helpful comments from Johannes Schweighofer, Gottfried Wetzel (both BMWA), and from Helmut Mahringer (Austrian Institute of Economic Research). Furthermore, three anonymous referees helped to improve a previous version of the paper considerably. The usual disclaimer applies.
Author information
Authors and Affiliations
Corresponding author
Additional information
Responsible editor: James Albrecht
The data were prepared in cooperation with Helmut Scheer from SIEMENS Austria. A previous version of the paper has been presented in workshops at the BMWA in Vienna, at the Universities of Aarhus, Freiburg, and St. Gallen, and at IAB, Nuremberg, and SOFI, Copenhagen. We are grateful to the participants of those workshops for their helpful comments and suggestions.
Appendix: Matching protocol
Appendix: Matching protocol
The results presented contain the binary comparison of each particular program to the state of non-participation for the participants in that particular program. Table 5 shows the matching estimator that is used for each such comparison.
Rights and permissions
About this article
Cite this article
Lechner, M., Wiehler, S. Kids or courses? Gender differences in the effects of active labor market policies. J Popul Econ 24, 783–812 (2011). https://doi.org/10.1007/s00148-009-0267-2
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s00148-009-0267-2