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Active labor market programs reduced contracted mobility

February 21, 2003

The probability of moving house to take a job outside one's own home region decreased after participation in labor market programs in Sweden. This is shown in a report from IFAU (Institute for Labor Market Policy Evaluation) titled "Employment, mobility, and active labor market programs," written by Peter Fredriksson and Per Johansson.

Several earlier studies indicate that active labor market programs reduced the chances of finding employment in the early 1990s. The new study shows that these programs also entailed negative consequences for another policy objective: geographical mobility declined after participation in a program. Background: One of the original motives behind introducing an active labor market policy was to stimulate geographic and occupational mobility.

The structural adjustment of the labor market was to be facilitated by mobility subsidies and labor market training. Results and method: The study investigates labor market training and programs that subsidize employment separately. The investigation is based on individuals who became unemployed during 1993, and these individuals are followed up for five years after entering unemployment. Several studies of the effect of labor market policy programs come to the conclusion that participation reduced the chances of finding employment in the early 1990s. We show that this result also applies to moving house to take a job.

The probability of moving to take a job was roughly 60 percent lower for those participating in programs in relation to comparable non-participants. The effect of participating was largely the same for labor market training and for subsidized work activities.

The report also indicates that the chances of getting a job in the home region and the chances of getting a job outside the home region were affected to the same extent. The allocation of job-search activities was thus not changed by participating in programs.

VetenskapsrÃ�det (The Swedish Research Council)

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