The impact of active labour market policies on the well

Asking whether social policies can alter the experience of unemployment, this article systematically evaluates whether participation in active labour market policies (ALMPs) influences the well-being of the unemployed. With consistently high unemployment rates in Organisation for Economic Co-operation and Development (OECD) countries, scholars have started to examine the impact of ALMP schemes on a variety of tangible economic outcomes, but place little focus on their sociological and psychological impacts. Using a novel panel survey, the IZA Evaluation Dataset, I employ a propensity score matching approach combined with difference-in-differences to address selection on both observables and unobservables. Consistent with my theoretical predictions, I find evidence that ALMP programmes that are most like regular employment, namely wage subsidies and subsidized self-employment, have the strongest impact on the well-being of the unemployed. Looking at regional and gender differences indicates interesting effect heterogeneity