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Do Firms Benefit from Active Labour Market Policies?


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 to determine 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 sub¬sidized 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.

Coauthors of this paper are Patrycja Scioch and Conny Wunsch.

Michael Lechner
Short bio: 

Michael Lechner has studied economics at the University of Heidelberg. Since 1998 he is a Professor of Econometrics in St. Gallen and the head of the Swiss Institute for Empirical Economic Research (SEW). He is a research fellow of  CEPR, CESifo and IZA, as well as a member of the German Academy of Science Leopoldina. One part of his research interests focus on developing and improving econometric methods for causal analysis in the field of microeconometrics. The other part of his research interests are related to economic questions coming from sports, labour and health economics.

07 March 2013 - 17:00

The presentation will be in English.