Department of Economics and Business Economics

Active Labor Market Programs and Reservation Wages: Its a Hazard

Research output: Working paperResearch


  • wp15_27

    Final published version, 496 KB, PDF document

  • Kenneth Lykke Sørensen, Denmark
Using a randomized controlled trial, this paper shows that positive earnings effects of labor market programs might be driven by an employment and/or a wage effect. The findings of this paper suggest that treated individuals in a high-intense scheme are more prone to have lowered short- term reservation wages compared to non-treated and thus accepts lower wages. In a less intense scheme with use of private providers, treated individuals are more likely to have gained formal human capital accumulation, and thereby raised reservation wages, which again might give rise to long-lasting effects.
Original languageEnglish
Place of publicationAarhus
PublisherInstitut for Økonomi, Aarhus Universitet
Number of pages10
Publication statusPublished - 21 Dec 2015
SeriesEconomics Working Papers

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