Active labour market policy by a profit-maximizing firm

Abstract

This article investigates the effectiveness of an employment programme exclusively run by a private sector firm in order to find out whether such a programme can be beneficial to both the participating individuals and the private firm. To answer these questions, we use a unique dataset on a private employment programme covering 23 years of operations and data on 1,000 participating unemployed individuals. Using conservative estimates, we show that a private employment programme is more effective in reintegrating the unemployed than public efforts, while providing tangible benefits to the firm. © John Wiley & Sons Ltd/London School of Economics 2012.