Channels through which Public Employment Services and Small Business Assistance Programmes Work

Empirical evidence has found that public employment services (PES) and small business assistance (SBA) programmes are successful at getting the unemployed back to work. Policywise it is important to know which of these two programmes is more effective, for whom, and when. Using unusually rich survey data and matching methods, this study evaluates the relative effectiveness of PES and SBA for different subgroups in Romania in the late 1990s, where the outcome variables involve earnings, employment and unemployment in 2000–1 and early 2002. It finds that heterogeneity matters and that these programmes need to be tailored to the problem at hand.