published in: Labour Economics, 2005, 12 (6), 807-835
Subsidised employment is an important tool of active labour market policies to improve the
chances of the unemployed to find permanent employment. Using informative individual
administrative data we investigate the effects of two different schemes of subsidised
temporary employment implemented in Switzerland. One scheme operates as a non-profit
employment programme (EP), whereas the other one is a subsidy for temporary jobs (TEMP)
in firms operating in competitive markets. Using econometric matching methods we find that
TEMP is considerably more successful in getting the unemployed back into work than EP.
We also find that compared to nonparticipation both programmes are ineffective for
unemployed who find job easily anyway as well as for those with short unemployment
duration. For unemployed with potentially long unemployment duration and for actual long
term unemployed, both programmes may have positive effects, but the effect of TEMP is
much larger.
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