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Does Subsidised Temporary Employment Get the Unemployed Back to Work? An Econometric Analysis of Two Different Schemes

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  • Gerfin, Michael

    (University of Bern)

  • Lechner, Michael

    (University of St. Gallen)

  • Steiger, Heidi

    (University of St. Gallen)

Abstract

Subsidised employment is an important tool of active labour market policies to improve the chances of the unemployed to find permanent employment. Using informative individual administrative data we investigate the effects of two different schemes of subsidised temporary employment implemented in Switzerland. One scheme operates as a non-profit employment programme (EP), whereas the other one is a subsidy for temporary jobs (TEMP) in firms operating in competitive markets. Using econometric matching methods we find that TEMP is considerably more successful in getting the unemployed back into work than EP. We also find that compared to nonparticipation both programmes are ineffective for unemployed who find job easily anyway as well as for those with short unemployment duration. For unemployed with potentially long unemployment duration and for actual long term unemployed, both programmes may have positive effects, but the effect of TEMP is much larger.

Suggested Citation

  • Gerfin, Michael & Lechner, Michael & Steiger, Heidi, 2002. "Does Subsidised Temporary Employment Get the Unemployed Back to Work? An Econometric Analysis of Two Different Schemes," IZA Discussion Papers 606, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp606
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    More about this item

    Keywords

    Switzerland; matching on the propensity score; subsidised temporary job; employment programme; temporary work contracts; active labour market policies;
    All these keywords.

    JEL classification:

    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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