Active labor market policies in Poland: Human capital enhancement, stigmatization, or benefit churning?

This paper provides microeconometric evidence on the effectiveness of activ e labor market policies in Poland. We sketch the theoretical framework of m atching estimators as a substitute for randomization in labor market progra ms. Using retrospective data from the 18th wave of the Polish Labor Force S urvey, we implement a conditional difference-indifferences matching estimat or of treatment effects. Considering as the outcome a multinomial variable of labor market status, our first important finding suggests that training of men and women has a positive effect on the employment probability. For m en, public works and intervention works have negative treatment effects, wh ile participation in intervention works does not affect women's employment probabilities. We attribute the negative treatment effects for men to benef it churning rather than to stigmatization of intervention and public works participants. J.. Comp, Econom., March 1999, 27(1), pp. 61-89. AWI, Univers itat Heidelberg, D-69117, Heidelberg, Germany; LICOS Centre for Transition Economics, Katholieke Universiteit Leuven, 8-3000 Leuven, Belgium and Willi am Davidson institute, University of Michigan Business School, Ann Arbor, M ichigan 48109; and AWI Universitat Heidelberg, D-69117, Heidelberg, Germany ; IZA, Bonn, Germany, and CEPR, London, England. (C) 1999 Academic Press. J ournal of Economic Literature Classification Numbers: C41, J68.