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What Works for Active Labor Market Policies?

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  • Eduardo Levy Yeyati

Abstract

The past 5 years have witnessed a flurry of RCT evaluations that shed new light on the impact and cost effectiveness of Active Labor Market Policies (ALMPs) aiming to improve workers´ access to new jobs and better wages. We report the first systematic review of 102 RCT interventions comprising a total of 652 estimated impacts. We find that (i) a third of these estimates are positive and statistically significant (PPS) at conventional levels; (ii) programs are more likely to yield positive results when GDP growth is higher and unemployment lower; (iii) programs aimed at building human capital, such as vocational training, independent worker assistance and wage subsidies, show significant positive impact, and (iv) program length, monetary incentives, individualized follow up and activity targeting are all key features in determining the effectiveness of the interventions.

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  • Eduardo Levy Yeyati, 2019. "What Works for Active Labor Market Policies?," CID Working Papers 358, Center for International Development at Harvard University.
    • Handle: RePEc:cid:wpfacu:358
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    1. Verónica Escudero & Jochen Kluve & Elva López Mourelo & Clemente Pignatti, 2019. "Active Labour Market Programmes in Latin America and the Caribbean: Evidence from a Meta-Analysis," Journal of Development Studies, Taylor & Francis Journals, vol. 55(12), pages 2644-2661, December.
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    5. Andrews, Matt & Pritchett, Lant & Woolcock, Michael, 2017. "Building State Capability: Evidence, Analysis, Action," OUP Catalogue, Oxford University Press, number 9780198747482.
    6. Cho, Yoonyoung & Honorati, Maddalena, 2014. "Entrepreneurship programs in developing countries: A meta regression analysis," Labour Economics, Elsevier, vol. 28(C), pages 110-130.
    7. Lant Pritchett & Salimah Samji & Jeffrey S. Hammer, 2012. "It's All about MeE: Using Structured Experiential Learning ('e') to Crawl the Design Space," WIDER Working Paper Series wp-2012-104, World Institute for Development Economic Research (UNU-WIDER).
    8. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097, Elsevier.
    9. Kluve, Jochen., 2016. "A review of the effectiveness of active labour market programmes with a focus on Latin America and the Caribbean," ILO Working Papers 994901193402676, International Labour Organization.
    10. Kluve, Jochen & Puerto, Susana & Robalino, David & Romero, Jose M. & Rother, Friederike & Stöterau, Jonathan & Weidenkaff, Felix & Witte, Marc, 2019. "Do youth employment programs improve labor market outcomes? A quantitative review," World Development, Elsevier, vol. 114(C), pages 237-253.
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    3. Sam Desiere & Bart Cockx, 2021. "How Effective Are Hiring Subsidies to Reduce Long-Term Unemployment among Prime-Aged Jobseekers? Evidence from Belgium," CESifo Working Paper Series 9325, CESifo.
    4. Pastore, Francesco & Pompili, Marco, 2022. "An impact assessment of ESF training courses for unemployed in the Province of Bolzano," GLO Discussion Paper Series 1042, Global Labor Organization (GLO).
    5. Ulku,Hulya & Georgieva,Dorina Peteva, 2022. "Unemployment Benefits, Active Labor Market Policies, and Labor Market Outcomes : Evidence from New Global Data," Policy Research Working Paper Series 10027, The World Bank.
    6. Miyamoto Hiroaki & Suphaphiphat Nujin, 2021. "Mitigating Long-term Unemployment in Europe," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 11(1), pages 1-27, May.
    7. Chatri, Abdellatif & Hadef, Khadija & Samoudi, Naima, 2021. "Micro-econometric evaluation of subsidized employment in morocco: the case of the "Idmaj" program," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 55, pages 1-17.

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    More about this item

    Keywords

    vocational training; labor policies; wage subsidies; randomized controlled trials;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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