The net effect of unemployment benefits, sanctions and training on regular employment

This paper measures the impact of labor market policies (LMPs) on regular employment. Contrary to previous empirical studies,we conduct an econometric analysis based on sound theoretical foundations. The specification is based on an equilibrium job search model where LMPs affect tightness on the labor market. The impacts of a comprehensive set of LMPs on the regular employment rate and on wages are jointly estimated. Taking care of the endogeneity of LMPs,our results for Belgium indicate that unemployment benefits have a positive,yet small,impact on wages and a negative one on the employment rate. The rate of sanctions has a small negative effect on wages. Their impact on the employment rate is however negative. This can be understood if the efficiency of the sanctioned in the matching process is sufficiently lower than the one of the insured unemployed. Training programmes have a small negative effect on wages and a small positive one on employment. Our analysis also shows that the results can be sensitive to the choice made about the exogeneity of LMPs.

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Document type	Communication à un colloque (Conference Paper) – Présentation orale avec comité de sélection
Publication date	2001
Language	Anglais
Conference	"13th annual conference of the European Asssociation of Labour Economics", Jyväskylä (du 13/09/2001 au 16/09/2001)
Affiliation	UCL - ESPO/ECON - Département des sciences économiques
Keywords	Evaluation ; Labor Market Policies ; Wage Bargaining ; Equilibrium unemployment ; Equilibrium search
Links	http://hdl.handle.net/2078.1/153954[Handle]

See also
	[boreal:5556]	The net effect of unemployment benefits, sanctions and training on aggregate unemployment outflows