Counterfactual Assessment of the Allowance for School-leaver Practice Performance as a Measure of Active Labour Market Policy in Slovakia1

Abstract

The intervention Allowance for school-leaver practice performance is in Slovakia one of the active labour market policy instruments aimed at unemployed young school-leavers. It was put into practice to enable young jobseekers to gain their first contact with the labour market and first work experience and habits. As the state budget and EU social funds are used to finance this intervention, there is a natural need to evaluate its outcomes. In this study, the evaluation is carried out by a counterfactual approach. To cope with the problem of selection bias, the method of an instrumental variable is used. The results show that the intervention has a short to medium-term impact on the employability and a significant positive impact on wages. The results of this study have the potential to be used by the policymakers to create the conditions for the effective functioning of the measure and eligibility of the participants.