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Title:Unintended effects of national-based active labour market policies PDF Logo
Authors:Altavilla, Carlo
Caroleo, Floro Ernesto
Issue Date:2009
Series/Report no.:IZA discussion papers 4045
Abstract:Labour market policies settled at national level imply a one-size-fits-all labour market strategy. This strategy might not sufficiently take into account region-specific economic structures. In this paper we employ a panel factor-augmented vector autoregression (FAVAR) to evaluate whether active labour market programs (ALMPs) might asymmetrically affect labour markets at regional level. Given the significant difference between Italian regional economies we separately analyse two areas: the Centre-North and the South. Our results suggest that the timing and magnitude of the reaction of employment rate to ALMP shocks in the two areas is substantially different. Moreover, forecast error variance decomposition highlight that different variables seem to drive employment dynamics. In the South employment is mainly driven by its own shocks and by social and economic context variables. By contrast, in the northern regions, the employment dynamics is significantly explained by the dynamics of nominal and policy variables such as remunerations and ALMP.
Subjects:Active Labour Market Policies
FAVAR
JEL:C33
J64
Persistent Identifier of the first edition:urn:nbn:de:101:1-20090323143
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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