Why do unemployed people avoid participation in training? An experiment for policy making

Despite active labour market policies being implemented to increase the skills and job opportunities of the unemployed, the number of people who do not participate in training and other services of job orientation remains high. By providing a model that studies the decision‐making process of a potential participant, we hypothesise there is a behavioural motive behind it. An experiment is carried out to account for both the individual's preference and the social expectations of agents such as the government and her peers with respect to active occupational measures. Findings show that young unemployed individuals are significantly influenced by their peers when deciding whether to participate or not in a training programme. Particularly, negative expectations from the peers cause unemployed potential participants in a within‐ and between‐subjects experiment to be, respectively, 33 and 42 percentage points less likely to take part in job training.