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Effectiveness of the Public Work Program in Slovenia.doc

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Effectiveness of the Public Work Program in Slovenia

E?ectivenessofthePublicWorkProgram inSlovenia LauraJu?nikRotar Thispaperevaluatesthedirecte?ectsoftheSlovenianpublicworkpro- gramontheyouth.Thee?ectivenessoftheprogramismeasuredby re-employmentprobability.AHeckmancorrectionofselectionisap- pliedtoestimatetheaverageprograme?ects.TheHeckmanselection estimatorisanextensivelyusedmethodtocontrolforselectiononun- observedvariables.Itreliesontheassumptionthataspeci?cdistribu- tionoftheunobservablecharacteristicsjointlyin?uencesparticipation andoutcome.Theresultsoftheempiricalstudyindicatethatthepublic workprogramhasapositivee?ectonemploymentintheshortrun.In thelongrun,however,theresultsarenotsoobvious. KeyWords:activeemploymentpolicies,evaluation, Heckmanprocedure,selection,treatmente?ects jelClassi?cation:c50,j38,j68 Introduction Activeemploymentpoliciesareessentiallypublicinterventionsinthela- bormarket.ForthemeasuresofactiveemploymentpoliciesinSlovenia intheyear2008therewasabudgetofapproximately98.6meur (cur- rentprices).Measuresofactiveemploymentpoliciesare?nancedfrom thestatebudget,andsomeoftheseresourcesareEuropeanresources. Themostheavily?nancedare:trainingprogramsandprogramsdeal- ingwithsocialinclusion.Basedonscienti?cmethodology,therearefew studiesontheevaluationofthee?ectivenessofemploymentprograms inSlovenia.Thisleadstooverestimationoftheresultsandinadequate distributionofresources. Sinceitisawell-knownfactthatunemploymentamongyoungpeople ismoresensitiveto?uctuationsinthebusinesscyclethanadultunem- ployment,wefocusourempiricalanalysisonyoungunemployedper- sons.Anadditionalreasonisalsothatthepublicworkprogramhasnot yetbeenevaluatedfortheyouth. Theaimoftheempiricalanalysisisto?ndouthowe?ectivethepub- licworkprogramisonfutureemploymentprobability.Weareinterested DrLauraJu?nikRotarisaSeniorLecturerattheFaculty ofCommercialandBusinessSciences,Slovenia ManagingGlobalTransitions9(3):275–287 276 LauraJu?nikRotar inthefutureemploymentprobabilityofyoungunemployedwhopartic- ipatedinthepublicworkprogram,comparedwi