Evaluation of Swedish youth labour market programmes

This paper evaluates and compares the direct effects of two Swedish active
labour market programmes for youth, namely youth practice and labour
market training. Effectiveness of the programmes is measured by subsequent
annual earnings, re-employment probability, and probability of
regular education. A non-parametric matching approach based on conditional
independence assumption is applied to estimate the average program
effects. Moreover, the results obtained by matching are compared to results
from standard linear regression and probit models, and a polychotomous
selectivity model with unobserved individual heterogeneity. The results indicate
either zero or negative effects of both programmes in the short run,
whereas the long-run effects are mainly zero or slightly positive. The results
suggest furthermore that youth practice was better than labour training.
However, there is much heterogeneity in the estimated treatment effects
among the individuals.

Keywords: Active labour market policies, balancing score, evaluation,
matching, propensity score, selection, treatment effects.
JEL classification: C14, C50, J38, J68.