We analyse the effects of active social policy (ASP) on the dynamics of welfare dependence.
We evaluate the impact of various ASP measures (employment and training) on the duration
of welfare spells and subsequent employment spells, based on data from Denmark. The
results show that employment measures improve the chances of leaving welfare dependence
whereas training measures have detrimental effects on the exit rate from welfare spells. We
investigate the optimal timing of ASP and show that there is a case for assigning individuals
to early participation in employment programmes, as the net effect is larger the earlier
participation begins.
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