The Effect of Active Labour Market Programmes and Benefit Sanctions on Reducing Unemployment Duration

Abstract

The purpose of this paper is to simultaneously investigate whether the active labour market programmes (ALMPs) and the imposition of benefit sanctions help unemployed insured workers in Denmark to find a job sooner than those who do not get any activation. Earlier studies have modelled ALMPs and benefit sanctions separately, which may have resulted in over-or underestimation of the true effect. As part of our empirical methodology, we used a multivariate mixed proportional hazard model and optimally selected the number of support points for the specification of unobserved heterogeneity distribution in our sample. Our results revealed that the impositions of both benefit sanctions and employment subsidies in the private sector have a positive impact on reducing unemployment duration. Some policy implications are drawn.

Give it Another Try: What are the Effects of a Job Creation Scheme Especially Designed for Hard-to-Place Workers?

“…On the one hand, it has to be admitted that targeting JCS via employment history alone or the outlined pre-selection mechanism appears to be insufficient. Other labour market programmes such as training programmes or subsidized employment, which have been shown to foster labour market integration of certain groups (Brown and Koettl 2015;Bellmann et al 2018;Ahmad et al 2019), do not seem to be suitable for job seekers with very low labour market attachment. AS a result, supporting the reintegration of very hard to place workers in the labour market remains an unsettled issue.…”

Activation: a thematic and conceptual review

“…More recently, evaluative studies have become more common. Some have focused on labour market outcomes for particular groups, such as young unemployed people (Grimmer and Hobbins, 2014), lone parents (Millar and Crosse, 2018) or particular aspects of activation, such as benefit sanctions (for example, Ahmad et al, 2019; Diop-Christensen, 2015). Others have concentrated on the performance of particular activation schemes, such as the Norwegian qualification programme (Ohls, 2017) or on regional approaches, such as in Lombardy (Trivellato et al, 2017).…”

Examining the Effects of Zero‐Dollar Unemployment Payment Sanctions*

“…However, the correct policy response would be to change the requirement rather than the sanction policy. The effect of sanctions on subsequent employment may also include impacts or be biased by characteristics associated with participation in active labour market programs (Ahmad et al ., 2019).…”