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  4. From Average Effects to Targeted Assignment: A Causal Machine Learning Analysis of Swiss Active Labor Market Policies
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From Average Effects to Targeted Assignment: A Causal Machine Learning Analysis of Swiss Active Labor Market Policies

Type
working paper
Date Issued
2024-10-30
Author(s)
Michael Lechner  
;
Federica Mascolo
;
Nora Bearth  
;
Fabian Muny
;
Jana Mareckova  
Abstract
Active labor market policies are widely used by the Swiss government, enrolling over half of all unemployed individuals. This paper evaluates the effectiveness of Swiss programs in improving employment and earnings outcomes using causal machine learning and rich administrative data on unemployed individuals in 2014 and 2015, including detailed labor market histories and other covariates. The findings for Swiss citizens and immigrants with permanent residency indicate a small positive average effect of a Temporary Wage Subsidy program on employment and earnings in the third year after program start. In contrast, Basic Courses, such as job application training, exhibit negative effects on both outcomes over the same period. No significant impacts are found for Employment Programs conducted outside the regular labor market or for Training Courses such as language or computer classes. The programs are most effective for individuals with a non-EU migration background, while Temporary Wage Subsidies also benefit those with lower educational attainment. Finally, shallow policy trees provide practical guidance for improving the targeting of program assignments.
Language
English
Keywords
causal machine learning
modified causal forest
treatment effect heterogeneity
optimal policy
Official URL
https://arxiv.org/abs/2410.23322
URL
https://www.alexandria.unisg.ch/handle/20.500.14171/122446
Subject(s)

economics

Division(s)

SEW - Swiss Institute...

SEPS - School of Econ...

University of St.Gall...

File(s)
Thumbnail Image

open.access

Name

2025-05-13-Het-Effects-ALMP-CH.pdf

Size

15.07 MB

Format

Adobe PDF

Checksum (MD5)

bc9952db8e0117acce79ef54fec7a119

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