Monday, 13 March 2017

The Threat Effect of Active Labor Market Programs: A systematic review

an article by Trine Filges (The Danish National Centre for Social Research SFI Campell) and Anne Toft Hansen (The Danish National Centre for Social Research School and Education) published in Journal of Economic Surveys Volume 31 Issue 1 (February 2017)


This paper is a systematic review of the threat effect of active labor market programs for unemployed individuals. The threat effect is the induced change in the hazard rate of leaving unemployment prior to program participation.

Studies included in the review all estimated a threat effect, with the participants in all cases being unemployed individuals in receipt of benefit of some kind during their tenure of unemployment.

Eight of these studies have been included in a meta-analysis: The meta-analysis, which has been carried out using a random effects model to account for heterogeneity, indicated a hazard ratio of 1.25 for the pooled estimate. We conclude that active labor market programs constitute a statistically significant threat effect, although it is modest.

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