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During the 1980s Latin America’s inflation problem worsened and successive stabilization programmes failed in many countries. This led to an increasing concern about the degree of rigidity imposed on the economy by different labour market structures built up over many decades. Wage indexation, in particular, was often blamed for the failure of stabilization and adjustment programmes. Examines the different components of an indexing system and assesses the degree of flexibility that the systems implemented in some countries brought to the labour market. While a particular indexing system may have the effect of reducing wage flexibility in certain periods, the analysis of data at the macro level shows that in the long term wage indexation has not been insurmountable obstacle. Stresses that wage determination is just one of the key processes with a substantial influence on inflation. In the case of high inflationary countries, the existence of various key prices draw attention to the need for co‐ordination in the adjustment of different prices during the application of a stabilization programme.

The purpose of this paper is to theoretically and empirically investigate the relative effects of wage subsidies and further vocational training on employment prospects.

The paper adopts a theoretical approach that discusses the effects of two major active labor market programs; empirical test using a large administrative data set from Germany and statistical matching techniques.

Previously subsidized individuals and trained individuals who found a job immediately afterwards have the same employment rates.

Firms value training on a subsidized job as much as formal training programs.

The paper presents a model that draws attention to the role of hiring decisions of firms and to the formation of human capital by training programs and by training on subsidized jobs; estimation of relative average treatment effects on the differentially treated, i.e. participants of two active labor market programs; and comparisons not only of all unemployed but also of unemployed persons taking‐up or keeping a job after program end.

We apply a recently suggested econometric approach to measure the effects of active labor market programs on employment, unemployment, and wage histories among participants. We find that participation in most of these training programs produces an initial locking-in effect and for some even a lower transition rate from unemployment to employment upon completion. Most programs, therefore, increase the expected duration of unemployment spells. However, we find that the training undertaken while unemployed successfully increases the expected duration of subsequent spells of employment for many subpopulations. These longer spells of employment come at a cost of lower accepted hourly wage rates.

The purpose of this paper is to evaluate the effects of comprehensive education as compared with vocational training by using Swedish data on a large sample of unemployed individuals aged 25 to 55.

The Adult Education Initiative (AEI) in Sweden was introduced in the autumn of 1997 and generated a massive expansion of subsidized adult comprehensive education. Participants in the vocational part of Labour Market Training (LMT) are used as a comparison group. The relative program effects are obtained by way of OLS fixed effects estimates, using register data of annual wage earnings from 1991 to 2003.

There are weaker earnings effects of comprehensive education relative to vocational training. However, insignificant coefficient results are obtained for individuals aged 43‐55 and also for females who prior to enrolment had experienced two‐year upper secondary schooling or resided in a municipality associated with a low level of average educational attainment.

Identification of true underlying effects rely on fixed effects estimates. Using non‐experimental data, one would ideally have access to an instrumental variable, which could explain program choice without being correlated with wage earnings.

The results add to our knowledge on the relative average returns to general and specific human capital accumulation. In this specific case, more careful targeting of participants in the AEI could have improved the relative efficiency of the program.

This study offers guidance to labour market policy makers on how an appropriate mix is attained between vocational training and comprehensive education.

Labor market programs may affect unemployed individuals' behavior before they enroll. The aim of this paper is to study whether such ex ante effects differ according to ethnic origin.

The authors apply a method that relates self‐reported perceived treatment rates and job search behavioral outcomes, such as the reservation wage or search intensity, to each other. German native workers are compared with migrants with a Turkish origin or Central and Eastern European (including Russian) background. Job search theory is used to derive theoretical predictions. The ex ante effect of the German active labor market program (ALMP) system is examined using the novel IZA Evaluation Data Set which includes self‐reported assessments of the variables of interest as well as an unusually detailed amount of information on behavior, attitudes and past outcomes.

It is found that the ex ante threat effect on the reservation wage and search effort varies considerably among the groups considered.

The study is the first to investigate whether migrants and natives react similarly to the expectation of participating in an ALMP, and whether migrants of different regions of origin react similarly or not.

The goal of the paper is to investigate how reservation wages of older unemployed welfare recipients change once they are no longer subject to standard job search requirements.

The authors apply a regression discontinuity design.

Consistent with theoretical predictions, the authors’ findings indicate that eliminating job search requirements will tend to increase reservation wages.

The results correspond to previous findings in the literature that monitoring leads to lower accepted wages and increased exits rates from unemployment, and that it may be a successful policy measure to keep older workers in the labor market.

Monitoring of job search effort has been shown to be an effective method of activating unemployed people, but little evidence has been found on the effect of activation measures on older workers.

On the basis of the data collected from 144 practitioners, we studied impact of the Palm Beach County Quality Improvement System (QIS) on practitioners. We found that (a) the duration of early learning coaching, (b) the intensity of career advisors, (c) quality workshops and conferences, (d) college courses, and (e) scholarship for books and supplies in relation to taking college courses are related to improving practitioners' job skills and level of certification and degree in early childhood care and education. We found that additional income to practitioners through the WAGE$ program is effective in retaining them. We also found that the professional development program has differential impact on practitioners of various racial and ethnic groups and that more encouragement and support should be given to African-American and Hispanic practitioners to engage in professional development and pursue advancement in the level of certificate and degree. All these findings have implications for the policy of early care and education in general and for other quality improvement initiatives for early care and education in particular.

Governments in a number of countries have introduced policies to increase the labour force participation of persons with disabilities. Many of these policies have displayed a legislative or compulsory element as in the case of workforce quotas. In 1981 the Australian Government introduced a price strategy in which employers were induced to increase their job offers to the disabled through a system of wage subsidy and workplace modification schemes. The performance of these schemes became an interesting test of the general policy of using market variables to influence what many regard as essentially a social problem. The results achieved in this article indicate that the wage subsidy programme has not been effective nor, given current employer attitudes, is it likely to be in the future.

This paper provides statistical evidence about the effect of work and family programs on productivity using a sample of large Fortune 500 companies in 30 industries in the US economy. Cross‐sectional firm‐level data on work and family programs are combined with financial data on companies to estimate production functions. Alternative specifications and estimation techniques are applied, including ordinary least squares and two‐stage least squares, with controls or corrections for union status, capital quality, heteroskedasticity, and possible endogeneity of company work‐family programs. The empirical results suggest that work‐family support programs succeed in improving productivity. The positive effects on firm performance may help to explain the growth and spread of work and family programs among US corporations in recent years. Further research is needed to evaluate the economic costs of work and family programs and to identify the mechanisms whereby work and family programs result in improved productivity.

The estimation of the effects of treatments – endogenous variables representing everything from child participation in a pre-kindergarten program to adult participation in a job-training program to national participation in a free trade agreement – has occupied much of the theoretical and applied econometric research literatures in recent years. This volume brings together a diverse collection of papers on this important topic by leaders in the field from around the world. This collection draws attention to several key facets of the recent evolution in this literature.