Active Labor Market Policy By A Profit Maximizing Firm

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Executive Summary

This paper investigates the effectiveness of an employment program exclusively run by and in a private sector firm, in order to find out whether a private program without cream-skimming can be beneficial to the individual private firm and society at large by outperforming public employment programs. To answer these questions, the authors use a unique dataset on a private employment program covering 27 years of operations and a thousand participating unemployed. Using conservative estimates, they show that a private employment program is more effective at re-integrating the unemployed than public efforts, whilst providing tangible benefits to the involved firm.

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