Abstract

We evaluate a temporary public sector employment program targeted at individuals with a weak labor market attachment. We show that the program is successful in terms of increasing employment and reducing social assistance. The positive employments effects are driven by individuals at regular workplaces. For participants with a temporary employment at a non-regular workplace, we instead find negative employment effects. The decrease in social assistance is partially countered by an increase in the share receiving unemployment insurance benefits, indicating that municipalities are able to shift costs from the local to the central budget. We further find that cost-effectiveness, as measured by the marginal value of public funds, varies depending on which level of government is considered.

Co-authors: Lillit Ottosson and Ulrika Vikman