Side effects of labor market policies

Marco Caliendo, Robert Mahlstedt*, Gerard J. van den Berg, Johan Vikström

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

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Abstract

Labor market policies, such as training and sanctions, are commonly used to bring workers back to work. By analogy to medical treatments, exposure to these tools may have side effects. We study effects on health using individual-level population registers on labor market outcomes, drug prescriptions, and sickness absence, comparing outcomes before and after exposure to training and sanctions. Training improves cardiovascular and mental health and lowers sickness absence. This is likely due to instantaneous features of participation, like the adoption of a more rigorous daily routine, rather than improved employment prospects. Benefits sanctions cause a short-run deterioration of mental health. This article is protected by copyright. All rights reserved.

Original languageEnglish
Pages (from-to)339-375
Number of pages37
JournalScandinavian Journal of Economics
Volume125
Issue number2
Early online date7-Aug-2022
DOIs
Publication statusPublished - Apr-2023

Keywords

  • cardiovascular disease
  • depression
  • drugs
  • health
  • mental health
  • prescriptions
  • sanctions
  • sickness
  • training
  • Unemployment

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