Evaluating active labour market programmes in New Zealand

The aims of this paper are to measure the impacts of subsidy, work experience and training programmes on New Zealand male registered unemployed, and to examine the sensitivity of these estimates to the amount of time that participants are followed after an intervention.

The impact of an intervention on those who participate in an active labour market programme is the key question addressed in this paper. A New Zealand panel data set is used, which includes both intervention and individual characteristics of the unemployed. Both a potential outcomes and single nearest‐neighbour difference‐in‐differences matching approach are used to estimate the impact of participation.

The key findings are that work experience programmes are the most effective in the short‐term. Training programmes are the least effective. Programmes are more effective for the long‐term unemployed than for short‐term unemployed. The results are sensitive to the point of time examined in the post‐intervention period, with short‐term benefits disappearing completely three years after the intervention.

This paper examines the relative effect of active labour market programmes in New Zealand using a consistent evaluation framework. The sensitivity of the results to different time periods, and matching estimator specifications are examined.