Macroeconomic Evaluations of Labour Market Programs

Abstract

Labour market programs are time honoured microeconomic policies, which offer different solutions to different policy makers. Some advocate them to moderate wage inflation and thus complement macroeconomic demand expansion. For others, they are advanced as a second-best, but politically feasible, substitute for reducing real wages. For many, they are regarded as an equity measure to assist the very long-term unemployed. All these goals are macroeconomic, for the policy maker is interested in the number and type of people displaced from employment as a result of the labour market programs. However, despite this, the macroeconomic field of labour market program evaluations is surprisingly thin...