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

This paper provides microeconometric evidence on the effectiveness of active labor market policies in Poland. We sketch the theoretical framework of matching estimators as a substitute for randomization in labor market programs. Using retrospective data from the 18th wave of the Polish Labor Force Survey, we implement a conditional difference-indifferences matching estimator 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 men, public works and intervention works have negative treatment effects, while participation in intervention works does not affect women's employment probabilities. We attribute the negative treatment effects for men to benefit churning rather than to stigmatization of intervention and public works participants. J.. Comp, Econom., March 1999, 27(1), pp. 61-89. AWI, Universitat Heidelberg, D-69117, Heidelberg, Germany; LICOS Centre for Transition Economics, Katholieke Universiteit Leuven, 8-3000 Leuven, Belgium and William Davidson institute, University of Michigan Business School, Ann Arbor, Michigan 48109; and AWI Universitat Heidelberg, D-69117, Heidelberg, Germany; IZA, Bonn, Germany, and CEPR, London, England. (C) 1999 Academic Press. Journal of Economic Literature Classification Numbers: C41, J68.