Do Labor Market Policies have Displacement Effects? Evidence from a Clustered Randomized Experiment *

Crépon, Bruno; Duflo, Esther; Gurgand, Marc; Rathelot, Roland; Zamora, Philippe

doi:10.1093/qje/qjt001

Cited by 344 publications

(112 citation statements)

References 24 publications

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“…This enriches the findings and points to the behavioral foundations of the results (Babcock et al, 2012). Among the outcomes studied are unemployment duration, benefit duration (Arni, 2015), exit to employment (Behaghel et al, 2014;Kastoryano and van Klaauw, 2015), job stability and type of employment contracts (Arni, 2015;Cr epon et al, 2013), reservation wages (Arni, 2015) and search strategy (Arni, 2015).…”

Section: Previous Evidence On Programs For Hard-to-place Workerssupporting

confidence: 54%

Coaching, Counseling, Case-Working: Do They Help the Older Unemployed Out of Benefit Receipt and Back Into the Labor Market?

Boockmann

Brändle

2019

German Economic Review

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Intensified counseling, job search assistance and related policies have been found to be effective for labor market integration of the unemployed by a large number of studies, but the evidence for older and hard‐to‐place unemployed is more mixed. In this paper, we present key results for a large‐scale active labor market program directed at the older unemployed in Germany. To identify the treatment effects, we exploit regional variation in program participation. We use a combination of different evaluation estimators to check the sensitivity of the results to selection, substitution and local labor market effects. We find positive effects of the program in the range of 5–10 percentage points on integration into unsubsidized employment. However, there are also substantial lock‐in effects, such that program participants have a higher probability of remaining on public welfare benefit receipt for up to 1 year after commencing the program.

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Section: Previous Evidence On Programs For Hard-to-place Workerssupporting

confidence: 54%

Coaching, Counseling, Case-Working: Do They Help the Older Unemployed Out of Benefit Receipt and Back Into the Labor Market?

Boockmann

Brändle

2019

German Economic Review

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“…In fact, the evidence on this issue is mixed. Some studies find substantial evidence of displacement effects, particularly among the long-term unemployed youth (Crepon et al, 2013;Feracci, Jolivet, & van der Berg, 2010;Gautier et al, 2012). Toohey (2015) finds that increased job-search efforts due to state rules have only modest effects on unemployment spells, especially during downturns, and he suggests that this is due to displacement (see also Lise, Seitz, & Smith, 2004).…”

Section: Discussionmentioning

confidence: 99%

Are Reemployment Services Effective? Experimental Evidence from the Great Recession

Michaelides

Mueser²

2018

J Policy Anal Manage

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We examine an experimental‐design reemployment program implemented in Nevada during the Great Recession that required Unemployment Insurance (UI) recipients to: (1) undergo an eligibility review to confirm they were qualified for benefits and actively searching for work and, if deemed eligible, (2) receive job‐counseling services. Our results show that the program expedited participant exit from UI, produced UI savings that exceeded program costs, and improved participant employment outcomes. Analyses of program effects on the UI exit likelihood show that the program's effects are partly associated with increased participant exit up through the time when program activities were scheduled, reflecting voluntary exit of participants from UI to avoid program activities and disqualifications of participants who failed to meet eligibility requirements. In addition, the program induced substantial participant exit from UI in the period after participants fulfilled requirements and their interactions with the program had ended, suggesting that the job‐counseling services offered by the program may have helped participants to conduct more effective job searches. Our findings provide evidence that reemployment programs that combine an eligibility review with mandatory participation in job‐search services can be effective during recessions.

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“…Sources: based on information available at: www.youth-employment-inventory.org [19 Feb. 2016]; Crépon, Duflo, Gurgand, Rathelot and Zamora, 2013. There are indications that involvement in employment services (and in ALMPs in general) has a stigmatizing effect on participants (Boone & van Ours, 2004;Kluve, Lehmann & Schmidt, 1999). Addressing this adverse effect is a prior condition for successful implementation.…”

Section: Box 4: Employment Services: Counselling and Job Placement Fomentioning

confidence: 99%

Interventions to improve the labour market outcomes of youth: A systematic review of training, entrepreneurship promotion, employment services and subsidized employment interventions

Kluve

Puerto

Robalino

et al. 2017

Campbell Systematic Reviews

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This Campbell systematic review examines the impact of youth employment interventions on the labour market outcomes of young people and business performance. The review summarises findings from 113 reports of 107 interventions in 31 countries. Included studies had to: (1) evaluate an active labour market programme (ALMP) which was designed for ‐ or targeted primarily ‐ young women and men aged between 15 and 35; (2) have an experimental and quasi‐experimental design; and (3) report at least one eligible outcome variable measuring employment, earnings, or business performance. The evidence base covers 107 interventions in 31 countries, including 55 using skills training, 15 with entrepreneurship promotion, ten using employment services and 21 using subsidized employment. Overall, youth employment interventions increase the employment and earnings of those youth who participate in them. But the effect is small with a lot of variation between programmes. There are significant effects for entrepreneurship promotion and skills training, but not for employment services and subsidised employment. Impacts on earnings were also positive but small and highly variable across programmes. Entrepreneurship promotion and skills training were effective in increasing earnings, while effects of employment services and subsidised employment were negligible or statistically insignificant. There is limited evidence of the effects of youth employment programmes on business performance outcomes, and the effect size was not statistically significant. In addition to the variation in impact across different types of programmes, some variation can be explained by country context, intervention design, and profile and characteristics of programme beneficiaries. The impacts of ALMPs are greater in magnitude in low‐ or middle‐income countries than in high‐income countries. Programmes targeting the most disadvantaged youth were associated with bigger programme effects, particularly for earnings outcomes, and effects were slightly larger for women than for men. Plain language summary Active labour market programmes for youth increase employment and earnings. Effects vary between programmes and contextThe evidence suggests that investing in youth through active labour market measures, such as offering skills training and entrepreneurship promotion, may pay off with higher earnings. The review in briefYouth are disproportionately victims of unemployment and low‐quality jobs. Active labour market programmes increase earnings and employment. But the effects vary greatly between programmes’ type, design and context. What is this review about?Youth unemployment is much greater than the average unemployment rate for adults, in some cases over three times as high. Today, over 73 million young people are unemployed worldwide. Moreover, two out of five young people in the labour force are either working but poor or are unemployed. The youth employment challenge is not only about job creation, but especially about enhancing the quality of jobs for youth.Th...

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Do Labor Market Policies have Displacement Effects? Evidence from a Clustered Randomized Experiment *

Cited by 344 publications

References 24 publications

Coaching, Counseling, Case-Working: Do They Help the Older Unemployed Out of Benefit Receipt and Back Into the Labor Market?

Coaching, Counseling, Case-Working: Do They Help the Older Unemployed Out of Benefit Receipt and Back Into the Labor Market?

Are Reemployment Services Effective? Experimental Evidence from the Great Recession

Interventions to improve the labour market outcomes of youth: A systematic review of training, entrepreneurship promotion, employment services and subsidized employment interventions

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