The Effects of a Job‐Creation Scheme: Evidence from Regional Variation in Program Capacities

Abstract

In direct job‐creation schemes, unemployed individuals at risk of permanent labor market exclusion are offered temporary subsidized employment in public‐ or nonprofit‐sector firms in combination with skills training and sociopedagogical support. The main aim is to stabilize and qualify them for later re‐integration into the regular labor market. Exploiting exogenous regional variation in population‐group–specific program capacities, I find that, on average, such a program eases the transition out of unemployment but has no long‐term effect on regular employment.

Regional Discontinuities and the Effectiveness of Further Training Subsidies for Low-Skilled Employees

“…Regional variation in employment offices’ policy styles has been exploited to evaluate ALMP instruments in recent studies (Frölich and Lechner 2010; Lechner, Wunsch, and Scioch 2013; Boockmann, Thomsen, and Walter 2014; Doerr et al 2014; Markussen and Roed 2014; Dean, Pepper, Schmidt, and Stern 2015; Eppel 2017). In this study, agency-specific policy styles reflect the part of the program implementation that is solely due to local employment agencies’ unique features, which are independent from structural or economic specifics.…”

Employment effects of language training for unemployed immigrants

“…After controlling for regional-and individual-level confounders, residual variation in language training intensity reflects the policy styles of job centers. Several studies have exploited regional variation in the policy styles of employment agencies and partly used an instrumental variable approach to analyze the effects of several labor market programs (Frölich and Lechner 2010;Lechner et al 2013;Markussen and Røed 2014;Boockmann et al 2014;Dean et al 2015;Caliendo et al 2017;Eppel 2017;Dauth 2020). Following this approach, I identify causal effects by addressing selection into the studied program based on unobservable characteristics.…”