Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/34483
Authors: 
Filges, Trine
Kennes, John
Larsen, Birthe
Tranæs, Torben
Year of Publication: 
2007
Series/Report no.: 
IZA Discussion Papers 2824
Abstract: 
This paper studies labour market policy in a society where differently gifted individuals can invest in training to further increase their labour market productivity. Furthermore, the government seeks both efficiency and equity. Frictions in the matching process create unemployment and differently skilled workers face different unemployment risks. We show that in such an environment, training programmes targeted to the disadvantaged workers complement passive transfers (UI benefits), unlike a general training subsidy. Combining passive subsidies with a training subsidy conditioned on individual unemployment duration the typical Active Labour Market Programme implies a favorable trade-off between equity and efficiency which encourages relative high spending on training.
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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