Threat Effect of Active Labour Market Policies
RCTClinical Trial
Active labor market programs can continue to depress re-employment rates even after participants complete training, failing to generate post-program employment momentum.
Picture this
Completing a mandatory course can feel like finishing a demanding marathon; rather than sprinting back into job applications immediately, exhausted participants take a break or feel stigmatized by employers, causing job search progress to remain slower than before the course started.
What the evidence says
Empirical estimations revealed non-positive or negative exit hazard coefficients following program completion across multiple program types (e.g. vocational training post-completion coefficient -0.49 for control group members in Storstrøm).
- Who was studied
- N = 4,513 unemployed UI recipients (human, Denmark: Storstrøm and Southern Jutland counties).
- How
- Mixed Proportional Hazard duration model tracking post-program exit hazard rates across training types.
What to do
Track job search hazard rates in the weeks immediately following program completion to isolate post-program hangover effects from during-program lock-in.
From the source
"indeed, some of them have large negative lock-in effects, and some even have large negative post-programme effects."
Experimental Evidence on the Nature of the Danish Employment Miracle