Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/82888 
Year of Publication: 
2002
Series/Report no.: 
Working Paper No. 2002:16
Publisher: 
Uppsala University, Department of Economics, Uppsala
Abstract: 
This paper estimates the macroeconomic effect of labor market programs on labor force participation. Labor market programs could counteract business-cycle variation in the participation rate that is due to the discouraged-worker effect, and they could prevent labor force outflow. An equation that determines the participation rate is estimated with GMM, using panel data (1986-1998) for Sweden's municipalities. The results indicate that labor market programs have relatively large and positive effects on labor force participation. If the number of participants in labor market programs increases temporarily by 100, the labor force increases immediately by around 63 persons. The effect is temporary so the number of participants in the labor force returns to the old level in the next period. If the number of participants in programs is permanently increased, the labor force increases by about 70 persons in the long run.
Subjects: 
Labor supply
Labor market programs
Dynamic panel data
JEL: 
E64
J22
J68
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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