The authors wish to thank David Zimmer for his extensive assistance and advice regarding the programing and estimation issues. Earlier versions of this paper were presented at the Symposium on Population Dynamics in the Circumpolar North, Umea University, Sweden: June 2008; Research Colloquium, Statistics Denmark, Copenhagen: June 2008; and the 45th Conference of the Missouri Valley Economic Association: October 2008.
ACTIVE LABOR MARKET PROGRAMS AND REGIONAL MOBILITY OF LABOR: EVIDENCE FROM THE SWEDISH RECESSION, 1994–1995
Article first published online: 28 JUN 2011
© 2011 Western Economic Association International
Contemporary Economic Policy
Volume 30, Issue 2, pages 178–194, April 2012
How to Cite
NAKOSTEEN, R. A., WESTERLUND, O. and ZIMMER, M. (2012), ACTIVE LABOR MARKET PROGRAMS AND REGIONAL MOBILITY OF LABOR: EVIDENCE FROM THE SWEDISH RECESSION, 1994–1995. Contemporary Economic Policy, 30: 178–194. doi: 10.1111/j.1465-7287.2011.00263.x
- Issue published online: 10 APR 2012
- Article first published online: 28 JUN 2011
- Online Early publication June 28, 2011
This paper addresses the impact of active labor market programs on interregional migration in Sweden. The purpose of the study is to determine the extent to which the programs, which provide training and labor market assistance to jobless individuals, induce participants to migrate. Analysis is based on data registers compiled in 1994 and 1995 by Statistics Sweden and the Labor Market Board of Sweden. The paper specifies and estimates a two-equation model of participation and subsequent migration. The model, which is estimated by the method of maximum simulated likelihood, accounts for the role of program participation as an endogenous choice variable in the decision to migrate. In an attempt to capture the effect of migrant self-selection, the estimation approach also controls for unobserved heterogeneity in the participation and migration equations.
Results of the study indicate a significant positive impact of participation on subsequent mobility for males. This result is robust with respect to alternative specifications of the migration equation and alternative formulations of the model for program participation. For females, the evidence of program impacts is mixed and it appears to be sensitive to the statistical formulation of the model. (JEL J38, J61)