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Publication - Dr Annette Bergemann

    The effect of active labor market programs on not-yet treated unemployed individuals

    Citation

    van den Berg, GJ, Bergemann, AH & Caliendo, M, 2009, ‘The effect of active labor market programs on not-yet treated unemployed individuals’. Journal of the European Economic Association, vol 7., pp. 606-616

    Abstract

    Labor market programs may affect unemployed individuals' behavior before they enroll. Such ex ante effects are hard to identify without model assumptions. We develop a novel method that relates self-reported perceived treatment rates and job-search behavioral outcomes, like the reservation wage, to each other, among newly unemployed workers. Job search theory is used to derive theoretical predictions. To deal with effect heterogeneity and selectivity, the effects of interest are estimated by propensity score matching. We apply the method to the German active labor market program system, using a novel data set including self-reported assessments of the variables of interest as well as unusually detailed information on behavior, attitudes, and past outcomes. We find that the system generates a negative ex ante effect on the reservation wage and a positive effect on search effort.

    Full details in the University publications repository