Working Paper: CEPR ID: DP9642
Authors: Michael Lechner; Patrycja Scioch; Conny Wunsch
Abstract: This paper investigates the link between variation in the supply of workers who participate in specific types of active labour market policies (ALMPs) and firm performance using a new exceptionally informative German employer-employee data base. For identification we exploit that German local employment agencies (LEAs) have a high degree of autonomy in determining their own mix of ALMPs and that firms' hiring regions overlap only imperfectly with the areas of responsibility of the LEAs. Our results indicate that in general firms do not benefit from ALMPs and in some cases may even be harmed by certain programs, in particular by subsidized employment and longer training programs. These findings complement the negative assessment of the cost-effectiveness of ALMPs from the empirical literature on the effects for participants.
Keywords: Program Evaluation; Regional Variation; Subsidized Employment Programs; Training Programs
JEL Codes: J68
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| ALMPs (J68) | firm performance (L25) |
| subsidized employment (J68) | firm performance (L25) |
| longer training programs (M53) | firm performance (L25) |
| ALMPs (J68) | hiring costs (J32) |
| ALMPs (J68) | match quality (C52) |
| lock-in effects (D43) | match quality (C52) |
| pre-program effects (C92) | hiring costs (J32) |
| threat effects (C22) | hiring costs (J32) |