Employment effects of active labor market measures for sick-listed workers

We use unique and rich register data of 88,948 sick-listed workers to investigate the effect of active labor market measures on the duration until returning to non-subsidized employment and the duration of this employment. To identify causal treatment effects, we exploit over-time variation in 98 job centers’ use of active labor market measures. We find that ordinary education and especially subsidized job training have statistically significant positive employment effects. Subsidized job training has a large, statistically significant positive effect on the transition into employment but no effect on the subsequent employment duration. In contrast, ordinary education has a statistically significant positive effect on employment duration but no effect on the transition to employment. This null effect consists of a large positive effect of having completed education and a large negative lock-in effect, with low re-employment chances during program participation. Moreover, non-formal education (e.g., shorter courses) and subsidized internships have no or even negative employment effects.