The Heterogeneous Effects of Active Labour Market Policies in Switzerland

Active labour market policies are widely used by the Swiss government, enrolling more than half of unemployed individuals. This paper analyses whether the Swiss programmes increase future employment and earnings of the unemployed by using causal machine learning methods and leveraging an administrative dataset that captures the population of unemployed and their labour market histories. The findings indicate a small positive average effect on employment and earnings three years after starting a specific Temporary Wage Subsidy programme. In contrast, we find negative effects for Basic Courses, such as job application training, on both outcomes three years after starting the programme. We find no significant effect for Employment Programmes which are conducted outside the regular labour market and Training Courses, such as language and computer courses. The programmes are most effective for individuals with lower education levels and with a migration background from non-EU countries. Last, shallow policy trees provide practical guidance on how the allocation of individuals to programmes could be optimised.