Program evaluation

Program evaluation provides an overview of the effectiveness of a variety of labor market policies that have been tested in diverse settings across various countries. The articles analyze whether or not the individual and the economy fair better without the measures studied.

  • The role of cognitive and socio-emotional skills in labor markets

    Cognitive skills are more relevant in explaining earnings, socio-emotional skills in determining labor supply and schooling

    Pablo AcostaNoël Muller, October 2018
    Common proxies, such as years of education, have been shown to be ineffective at capturing cross-country differences in skills acquisition, as well as the role they play in the labor market. A large body of research shows that direct measures of skills, in particular cognitive and socio-emotional ones, provide more adequate estimations of individuals’ differences in potential productive capacity than the quantity of education they receive. Evidence shows that cognitive skills in particular are quite relevant to explain wages, while socio-emotional skills are more associated with labor force and education participation decisions.
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  • Managerial quality and worker productivity in developing countries

    Business consulting and supervisory skills training can improve firm productivity and labor relations

    Achyuta Adhvaryu, February 2018
    Productivity differences across firms and countries are surprisingly large and persistent. Recent research reveals that the country-level distributions of productivity and quality of management are strikingly similar, suggesting that management practices may play a key role in the determination of worker and firm productivity. Understanding the causal impacts of these practices on productivity and the effectiveness of various management interventions is thus of primary policy interest.
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  • How manipulating test scores affects school accountability and student achievement

    Standardized testing can create incentives to manipulate test results and generate misleading indicators for public policy

    Erich Battistin, September 2016
    Standardized testing has become the accepted means of measuring a school’s quality. However, the associated rise in test-based accountability creates incentives for schools, teachers, and students to manipulate test scores. Illicit behavior may also occur in institutional settings where performance standards are weak. These issues are important because inaccurate measurement of student achievement leads to poor or ineffective policy conclusions. The consequences of mismeasured student achievement for policy conclusions have been documented in many institutional contexts in Europe and North America, and guidelines can be devised for the future.
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  • Job search requirements for older unemployed workers

    How do they affect re-employment rates and flows into states of inactivity for older unemployed workers?

    Hans Bloemen, March 2016
    Many OECD countries have, or have had, a policy that exempts older unemployed people from the requirement to search for a job. An aging population and low participation by older workers in the labor market increasingly place public finances under strain, and spur calls for policy measures that activate labor force participation by older workers. Introducing job search requirements for the older unemployed aims to increase their re-employment rates. Abolishing the exemption from job search requirements for these workers has been shown to initiate higher outflow rates from unemployment for the older unemployed.
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  • Adult literacy programs in developing countries

    While mostly missing their primary objectives, adult literacy programs can still improve key socio-economic outcomes

    Niels-Hugo Blunch, July 2017
    In addition to the traditional education system targeting children and youth, one potentially important vehicle to improve literacy and numeracy skills is adult literacy programs (ALPs). In many developing countries, however, these programs do not seem to achieve these hoped for, ex ante, objectives and have therefore received less attention, if not been largely abandoned, in recent years. But, evidence shows that ALPs do affect other important socio-economic outcomes such as health, household income, and labor market participation by enhancing participants’ health knowledge and income-generating activities.
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  • The effect of early retirement schemes on youth employment

    Keeping older workers in the workforce longer not only doesn’t harm the employment of younger workers, but might actually help both

    René Böheim, June 2014
    The fiscal sustainability of state pensions is a central concern of policymakers in nearly every advanced economy. Policymakers have attempted to ensure the sustainability of these programs in recent decades by raising retirement ages. However, there are concerns that keeping older workers in the workforce for longer might have negative consequences for younger workers. Since youth unemployment is a pressing problem throughout advanced and developing countries, it is important to consider the impact of these policies on the employment prospects of the young.
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  • The effects of wage subsidies for older workers

    Wage subsidies to encourage employers to hire older workers are often ineffective

    Bernhard Boockmann, September 2015
    Population aging in many developed countries has motivated some governments to provide wage subsidies to employers for hiring or retaining older workers. The subsidies are intended to compensate for the gap between the pay and productivity of older workers, which may discourage their hiring. A number of empirical studies have investigated how wage subsidies influence employers’ hiring and employment decisions and whether the subsidies are likely to be efficient. To which groups subsidies should be targeted and how the wage subsidy programs interact with incentives for early retirement are open questions.
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  • Measuring employment and unemployment

    Should statistical criteria for measuring employment and unemployment be re-examined?

    Measuring employment and unemployment is essential for economic policy. Internationally agreed measures (e.g. headcount employment and unemployment rates based on standard definitions) enhance comparability across time and space, but changes in real labor markets and policy agendas challenge these traditional conventions. Boundaries between different labor market states are blurred, complicating identification. Individual experiences in each state may vary considerably, highlighting the importance of how each employed or unemployed person is weighted in statistical indices.
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  • Can hiring subsidies benefit the unemployed?

    Hiring subsidies can be a very cost-effective way of helping the unemployed, but only when they are carefully targeted

    Alessio J. G. Brown, June 2015
    Long-term unemployment can lead to skill attrition and have detrimental effects on future employment prospects, particularly following periods of economic crises when employment growth is slow and cannot accommodate high levels of unemployment. Addressing this problem requires the use of active labor market policies targeted at the unemployed. In this context, hiring subsidies can provide temporary incentives for firms to hire unemployed workers and, when sensibly targeted, are a very cost-effective and efficient means of reducing unemployment, during both periods of economic stability and recovery.
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