An Evaluation of the Swedish System of Active Labor Market Programs in the 1990s

Abstract

We investigate the presence of short- and long-term effects from joining a Swedish labor market program vis-à-vis more intense job search in open unemployment. Overall, the impact of the program system is found to have been mixed. Joining a program has increased employment rates among participants, a result robust to a misclassification problem in the data. On the other hand it has also allowed participants to remain significantly longer on unemployment benefits and more generally in the unemployment system, this being particularly the case for those entitled individuals entering a program around the time of their unemployment benefits' exhaustion. © 2004 President and Fellows of Harvard College and the Massachusetts Institute of Technology.