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Macroeconomic Effects of Active Labour Market Programmes: The Basic Theory
Stockholm University, Faculty of Social Sciences, Institute for International Economic Studies.
Stockholm University, Faculty of Social Sciences, Institute for International Economic Studies.
1993 (English)Report (Other academic)
Abstract [en]

The recent Western European policy debate on unemployment has emphasised the benefits of active labour market programmes. We provide a basic theoretical framework to analyse the effects on wage pressure and equilibrium employment that has hitherto been missing. Programmes are wage-reducing to the extent that they help maintain effective labour-force participation. But they may also weaken insider incentives for wage restraint as the disutility of lay-offs becomes smaller. Targeting the long-term unemployed is cricual for the success of active labour market policy, since the welfare effects in the laid-off then are more heavily discounted and employment opportunities are redistributed from insiders to outsiders.

Place, publisher, year, edition, pages
Stockholm: IIES , 1993. , 41 p.
Series
Seminar Paper / Institute for International Economic Studies, Stockholm University, ISSN 0347-8769 ; 541
National Category
Economics
Identifiers
URN: urn:nbn:se:su:diva-41860OAI: oai:DiVA.org:su-41860DiVA: diva2:338012
Available from: 2010-08-10 Created: 2010-08-10 Last updated: 2010-08-10Bibliographically approved

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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf