Patrick Arni, Rafael Lalive, Gerard Van den Berg, 11 January 2016

The standard empirical evaluations of labour market policy only consider the direct effects of single programmes on their participants. This column argues that this fails to capture important aspects of real-world labour market policy – policy regimes and strategies. Using Swiss data, it employs a novel empirical approach that concurrently examines the effects of supportive and punitive policies (‘carrots’ and ‘sticks’). Policy regimes are shown to exert economically relevant effects, and accounting for these effects is crucial when designing labour market policy.

Frank Levy, Peter Temin, 15 June 2007

Rising American inequality stems from efficiency-enhancing policy changes in the 1970s and 1980s. There is growing recognition that the current free-market income distribution – the combination of large inequalities and stagnant wages for many workers – creates its own “soft” inefficiencies as people become disenchanted with existing economic arrangements.

Werner Eichhorst, Klaus F. Zimmermann, 23 April 2007

Only four instruments have led to positive results in the form of increased integration into the labour market - (i) placement vouchers; (ii) training programmes; (iii) wage subsidies; and (iv) business start-up grants. This translates to only around 28%, or €4.2 billion, of the total expenditure on active labour market policies.

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