Effectiveness of the Public Work Program in Slovenia

This paper evaluates the direct effects of the Slovenian public work programon the youth. The effectiveness of the program is measured byre-employment probability. A Heckman correction of selection is appliedto estimate the average program effects. The Heckman selectionestimator is an extensively used method to control for selection on unobservedvariables. It relies on the assumption that a specific distributionof the unobservable characteristics jointly influences participationand outcome. The results of the empirical study indicate that the publicwork program has a positive effect on employment in the short run. Inthe long run, however, the results are not so obvious.