Evaluating job-search programs for old and young individuals: Heterogeneous impact on unemployment duration

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Abstract

This paper exploits an area-based pilot experiment to identify average treatment effects on unemployment duration of treated individuals of two active labor market programs implemented in Portugal. We focus on the short-term heterogeneous impact on two subpopulations of unemployed individuals: young (targeted by the Inserjovem program) and old (targeted by the Reage program). We show that the latter program has a small and positive impact (reduction) on unemployment duration of workers finding a job upon participation, whereas the impact of Inserjovem is generally negative (extended durations). These results are robust to a wide variety of constructions of quasi-experimental settings and estimators. The identification of heterogeneous effects showed that the program results were less satisfactory for young workers, for those over 40 and for the less educated. Women also benefited less from the programs. The results seem to improve slightly for young workers in the 2nd semester of implementation, but they deteriorate in the medium term. The lack of wage subsidies in the Portuguese programs may explain the minor impacts obtained, when compared to similar programs.

Original languageEnglish
Pages (from-to)12-25
Number of pages14
JournalLabour Economics
Volume16
Issue number1
DOIs
Publication statusPublished - 1 Jan 2009

Keywords

  • Active labor market program
  • Causal evaluation
  • Difference-in-differences estimators
  • Unemployment duration

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