A comprehensive impact evaluation of active labour market programmes in Slovenia

Using administrative database containing work history and programme participation for the entire national workforce, the paper evaluates Slovenia’s four main active labour market programmes: institutional training, on-the-job training, wage subsidies and public works. The studied outcomes range from post-unemployment employment probability and job quality to cumulative effects on employment and earnings over the longer run, and also include programmes’ cost-effectiveness. We identify programme effects by comparing outcomes of treatment and control groups using propensity score matching. The results show that the programmes perform rather well judged both by their impact on labour market outcomes and by their cost-effectiveness: except for public works, all programmes are found to have a net benefit in terms of government expenditures. Our results are robust to time-invariant unobserved heterogeneity in the treatment and control groups, as we corroborate the baseline propensity score matching results with a difference-in-difference estimator.