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The Effect of Active Labour Market Programmes and Benefit Sanctions on Reducing Unemployment Duration

Authors
  • Ahmad, Nisar1
  • Svarer, Michael2
  • Naveed, Amjad3
  • 1 Sultan Qaboos University, Department of Economics and Finance, Muscat, Oman , Muscat (Oman)
  • 2 Aarhus University, Department of Economics and Business Economics, Aarhus C, Denmark , Aarhus C (Denmark)
  • 3 Aarhus University, Department of Business Development and Technology, Herning, Denmark , Herning (Denmark)
Type
Published Article
Journal
Journal of Labor Research
Publisher
Springer US
Publication Date
Apr 30, 2019
Volume
40
Issue
2
Pages
202–229
Identifiers
DOI: 10.1007/s12122-019-09288-x
Source
Springer Nature
Keywords
License
Yellow

Abstract

The purpose of this paper is to simultaneously investigate whether the active labour market programmes (ALMPs) and the imposition of benefit sanctions help unemployed insured workers in Denmark to find a job sooner than those who do not get any activation. Earlier studies have modelled ALMPs and benefit sanctions separately, which may have resulted in over- or underestimation of the true effect. As part of our empirical methodology, we used a multivariate mixed proportional hazard model and optimally selected the number of support points for the specification of unobserved heterogeneity distribution in our sample. Our results revealed that the impositions of both benefit sanctions and employment subsidies in the private sector have a positive impact on reducing unemployment duration. Some policy implications are drawn.

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