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ORIGINAL ARTICLE Open Access
What active labour market programmes work for
immigrants in Europe? A meta-analysis of the
evaluation literature
Sebastian Butschek
†
and Thomas Walter
*†
* Correspondence:
thomas.walter.econ@gmail.com
†
Equal contributors
Centre for European Economic
Research (ZEW), L 7, 1, D-68161
Mannheim, Germany
Abstract
A growing body of programme evaluation literature recognises immigrants as a
disadvantaged group in European labour markets and investigates the employment
effects of Active Labour Market Programmes (ALMPs) on this subgroup. So far,
however, there is no systematic review establishing which ALMPs are effective for
immigrants. Using a meta-analysis, we condense 93 e stimates from 33 empirical
studies of the effectivene ss of four types of ALMPs emp loyed a cross Europe to
combat immigrant unemployment: training, job search assistance, wage subsidies
and subsidised public sector emplo yment. We find that o nly wage subsidies can
be confidently recommended to European policy-makers.
Jel codes: J15, J61, J68, I38
Keywo rds : Immigrants; Unemployment; Labour market integration; ALMP;
Evaluation; Meta-analysis
1 Introduction
Immigrants are under-represented in employment and over-represented in unemploy-
ment in most European countries. In 2009/2010, their employment rate was on average
2.9 percentage points lower than that of natives across all European OECD countries.
At the same time, their unemployment rate wa s 4.3 percentage point s higher (OECD,
2012).
To facilitate immigrants’ labour market integration, European governments use a
wide range of Active Labour Mark et Programmes (ALMPs). These include language
and introduction course s, job search assistance, training programmes, and subsidised
public and private sector employment. They also involve substantial government
spending. While evidence on the effectiveness of single programmes exists, it has not
been reviewed systematically to establish empirically which types of programmes actu-
ally facilitate immigrants’ employment uptake. To shed light on this question, we re-
view the small but growing literature evaluating the employment effects of ALMPs on
immigrants in Europe. By means of a meta-analysis, we try to identify which ALMPs
work for immigrants and which ones do not. Our results should help policy-makers
employ activation measures more efficiently.
© 2014 Butschek and Walter; licensee Springer. This is an Open Access article distributed under the terms of the Creative Commons
Attribution License (http://creativecommons.org/licenses/by/4.0), which permits unrestricted use, distribution, and reproduction in any
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Butschek and Walter IZA Journal of Migration (2014) 3:48
DOI 10.1186/s40176-014-0023-6
With respe ct to ALMPs’ effects on all unemployed workers (natives and immigrants),
recent analyses have strengthened a growing consensus: job search assistance and, to
some extent, wage subsidies are effe ctive in the short run, while training works in the
longer run; subsidised public sector employment (also known as public works), how-
ever, is generally ineffective (Heckman et al. 1999, Greenberg et al. 2003, Kluve, 2010,
Card et al. 2010). Also, the findings of the ALMP evaluation literature on heterogeneous
treatment effects on women or young workers have been reviewed (e.g., Bergemann and
van den Berg, 2008, Card et al. 2010).
For immigrants, two surveys of the literature on the effect of ALMPs exist. Nekby
(2008) provides a qualitative review of four stu dies evaluating labour market
programmes for immigrants in the Nordic countries; she concludes that the same
types of ALMPs work for immigrants as for the general population of unemployed
workers. Rinne (2013) discusses the findings of three stu dies evaluating language/
introduction courses designed for immigrants and eight recent evaluations of gen-
eral labour market programmes’ effe cts on immigrants. He suggests that “progra ms
that are relatively closely linked to the labormarket(forexample,workexperience
and wage subsidies) appear the comparatively most effe ctive programs” (Rinne,
2013, p. 548). While both sur veys present relevant evidence, neither of them con-
siders the full range of existing studies or formally aggregates the findings of the
studies re viewed.
We provide an accessible quantitative summary of the existing empirical evidence.
To this end, we collect the relevant studies following a search protocol and then con-
dense their findings in two steps: first, using descriptive analysis and second, perform-
ing a meta-analysis with sign and significance of the effect estimate as our outc ome
variable of interest.
As Stanley (2001) argues, “The most important strength of meta -analysis is that it
moves literature reviews away from casual judgments about “good” studies that deserve
attention and “poor” studies that should be set aside, and instead provides a replicable
statistical framework for summarizing and interpreting the full range of evidence”.The
key ingredient of such an analysis is then an exhaustive data set of relevant studies. We
find 33 micro-econometric papers that estimate 93 short-run treatment effe cts up to
two years after progra mme start. The interventions evaluated were implemented in the
Nordic countries (Norway, Sweden, Denmark, and Finland), Germa ny, the Netherlands
and Switzerland between 1984 and 2007.
Our descriptive analysis looks at the distribution of impact estimates conditional on
study characteristics in order to provide an absolute indication of the effective-
ness of different types of ALMPs. Performing a meta-analysis of the same sample
of effect estimates allows us to go beyond the descriptive analysis in two ways.
First, we can control for different study characteristics when investigating which
ALMP types are associated with significant or insignificant impact findings, sim-
ultaneously addressing such issues as methodological differences or changes in
programme effectiveness over time. Second, we can provide a summary measure
for whether the e vidence suggests that one type of AL MP works better than
some other.
We find that subsidised employment in the private sector is significantly more likely
estimated to have a positive effect on immigrants’ labour market outcomes than
Butschek and Walter IZA Journal of Migration (2014) 3:48 Page 2 of 18
training. For the other ALMP types, our meta-analysis yields mostly insignificant re-
sults. Combining our conclusions from the meta-analysis with the descriptive analysis
suggests that wage subsidies not only work better than other programmes but also do
have positive employment effects on immigrants. The finding that only wage subsidies
are effective for immigrants is in contrast with recent meta-analyses’ conclusion for the
unemployed in general that job search assistance programmes are also effective (Kluve,
2010, Card et al. 2010). However, it points in the same direction as Rinne’s conclusion
that interventions such as work experience and wage subsidy programmes appear most
effective (Rinne, 2013).
Despite the positive effect s of wage subsidies, immigrants seem under-represented in
this type of programme. For Germany, for example, data on the immigrant share in
ALMP participation shows that, compared to natives, immigrants are more often
assigned to training and public works programmes than to wage subsidy programmes.
In addition, wage subsidy programmes are the smallest category in absolute immigrant
participation numbers (Statistik der Bundesagentur für Arbeit, 2013). In light of our
results, these figures suggest that there is room for improving the allocation of ALMP
resources.
The remainder of this paper consists of four parts: se ction 2 provides background
information on immig rants in European labour markets; se ction 3 describes the data
and presents some descriptive analysis; section 4 discusses the findings of our meta-
analysis and performs a sensitivity check; section 5 concludes.
2 Immigrants in Europe and their labour market integration
On average, the share of immigrants (defined as foreign-born persons) among the total
population amounted to 11.2% in European OECD countries in 2009/2010 (see Additional
file 1: Table S1).
1
In almost every country, the share of immigrants in the working age
population (age 15 to 64) is even larger than in the total population. It amounts to 13.3%
on average across European OECD countries.
Despite substantial heterogeneity in immig rant origins, European countries share the
problem of integrating immigrants into the labour market. Immigrants are usually
under-represented in employment and over-represented in unemployment. Table 1
shows the employment and unemployment rates of immigrants in our sample of seven
European OECD countries in 2009/2010 and how they compare to the respective rates
of the native populations. On average, the employment rate for immigrants in these
countries is 65.8%. It is 9.3 percentage point s lower than the rate for natives. Differ-
ences in the employment rate are especially pronounced in Denmark, the Netherlands
and Sweden, with a difference of more than 10 percentage points. Correspondingly,
unemployment is more prevalent among immigrants than among natives. Immigrants’
unemployment rate is 11.6% on average. It is more than twice as high as the natives’
unemployment rate (5.4%). Across all European OECD countries, differences in the
employment and unemployment rates between immigrants and natives are smaller than
in the seven countries investigated here but still sizeable: 4.3 percentage points for
unemployment and 2.9 percentage points for employment.
To combat the high level of unemployment among immigrants and to foster their
employment uptake, governments use Active Labour Market Programmes (ALMPs).
Butschek and Walter IZA Journal of Migration (2014) 3:48 Page 3 of 18
For immigrants, two different categories of ALMPs can be distinguished: first,
programmes that are specifically designed for and exclusively targeted at immig rants,
and second, general programmes that are also used for the native population. In what
follows, we will refer to these categories as migrant-spe cific and general ALMPs,
respectively.
General ALMPs comprise four types of interventions (see, e.g., Card et al. 2010):
1) Training: This includes all programmes that aim to enhance participants’ skills
needed for employment uptake (e.g., computer courses or courses providing specific
occupational knowledge). Training programmes can be provided either on-the-job
within a firm or off-the-job in a classroom.
2) Subsidised private sector employment: This category comprises programmes that
generate incentives to increase job opportunities in the private sector. One example
for such a programme is wage subsidies for employers who hire disadvantaged
workers. Wage subsidies can also be paid to workers when they accept a job with a
wage below their unemployment benefits or when they start their own business.
3) Subsidised public sector employment (public works): This type of intervention aims
at offering temporary job opportunities outside the private sector, mainly in
community services. Public-works programmes should be designed in such a way
that they do not crowd out regular employment.
4) Job search assistance and sanctions: This inter vention type has the objective of
making the job search process of participants more effective and efficient. Job
search assistance is predominantly provi ded by public employ ment services and
includes counselling and monitoring of job search efforts. In case of a lack of job
search effort, sanctions are intended to restore an appropriate level of compliance.
Migrant-specific programmes can be grouped into three categories:
1) Language training often not only improves participants’ ability to communicate in
the host country’s main language but also provides information about history,
Table 1 Employment and unemployment rates of immigrants in selected European OECD
countries, 2009/2010
Country Employment rate
of foreign-born
(in %)
Difference to natives
(in percentage points)
Unemployment rate
of foreign-born
(in %)
Difference to natives
(in percentage points)
Denmark 65.6 −10.0 11.8 5.5
Finland 62.1 −6.6 16.3 8.2
Germany 63.8 −8.7 12.2 5.6
Netherlands 65.5 −11.9 7.7 4.2
Norway 66.6 −9.8 9.9 7.0
Sweden 61.7 −12.9 15.8 8.7
Switzerland 75.1 −5.1 7.4 4.2
7-country average
(unweighted)
65.8 −9.3 11.6 6.2
European OECD
average (unweighted)
63.2 −2.9 12.6 4.3
Source: OECD (2012) and own calculations.
Butschek and Walter IZA Journal of Migration (2014) 3:48 Page 4 of 18
culture and institutions of the host country. One example for such a course is the
so-called orientation course in Germany (see, e.g., Liebig, 2007)
2) Introduction programmes provide a customised integration plan towards
employment upt ake. Targeted at newly arriving immigran ts , they usually start
with language train ing and continue with either training or subsidised
employment. Throughout the programme, job s earch assistance is provided.
See, e.g., Andersson Joona and Nekby (2012) and Sar vimäki and Hämäläinen
(2012) for introduct ion programme s in Sweden and Fin land, respectively.
3) General programmes exclusively for immigrants comprise general ALMPs other
than language courses (training , subsidised private or public se ctor employment,
job search a ssistance and sanctions) targeted at immigrants (and not at natives).
One example for such an inter vention is intensified job search assistance
programmes, where immigrants are a ssigne d t o caseworkers whose ca s eload is
reduced. That is , caseworkers have more time for the counselling and support of
each individual. S ee, e.g., Aslund and Johansson (2011) for a programme of this
kind in Sweden.
Whether general programmes or migrant-specific ones are more effective for the
integration of immigrants into the labour market is a question of major policy inter-
est. One might expect migrant-specific pr ogrammes to be more successful since they
were designed for the needs of immigrants, whereas general programmes address the
needs of average participants , including mostly natives. Howe ver, the fact that, in
practice, both programmes coexist in all European countries might be taken to
suggest that neither of them is superior or that policymakers are not aware of which
programmes work and which ones do not.
2
Empirical studies have not established an
answer to this question either. We attempt to address it by means of our meta-
analysis.
3 Description of the data
3.1 Estimation Sample
To obtain an exhaustive sample of studies evaluating the effects of ALMPs on immi-
grants’ labour market outcomes, we implemented the following search protocol:
1) Collect studies on ALMPs surveyed by Nekby (2008), Rinne (2013), Kluve (2010),
and Card et al. (2010).
2) Perform internet keyword searches
3
on 27 November 2012 and on 15 April 2013 to
find additional studies.
We then identified those studies that met the following selection criteria:
1) Studies that estimate ALMP treatment effects for immigrants.
4
2) Studies that perform a micro-econometric ev aluation of the inter vention’s
effect on ind ividual labo ur market outcom es , outlinin g the identific ation
strategy.
3) Studies that evaluate an intervention that roughly fits into one of four ALMP
categories (described in more detail below): training, wage subsidy, public works, or
Butschek and Walter IZA Journal of Migration (2014) 3:48 Page 5 of 18
services/sanctions. We also admitted studies that evaluate the aggregate effect of a
country’s ALMPs.
Applying these criteria yielded a sample of 34 studies estimating ALMP effects on
immigrants’ probability of or hazard to employment
5
in seven countries (Denmark,
Finland, Germany, Netherlands , Norway, Sweden, Switzerland). Some studies evaluate
several programmes or perform their analyses separately by gender or region as well a s
estimate effects for different points in time during follow-up. For comparability, we
focus on short-run estimates, defined a s effect estimates ba sed on outcom es observed
up to two years after programme start.
6
Where there is more than one such short-term
estimate per gender-region-group combination, we choose the latest (most long-term)
one. This gives 33 studies providing 93 short-run estimates.
7
The four ALMP categories we use are as follows:
1) Classroom and on-the-job training (henceforth “training”)
2) Subsidised private se ctor employment (“wage subsidy”)
3) Subsidised public sector employment (“public works”)
4) Job-search assistance and sanctions (“services/sanctions”)
These are taken from Card et al. (2010) but are fairly standard in the evaluation lit-
erature, as exemplified by analogous definitions in Calmfors (1994) and Kluve (2010).
We allow for a fifth residual group of “other programmes” (includin g aggregate ALMP
effects and programmes that combine several ALMP types in a single treatment). See
section 2 for a definition of the ALMP categories.
8
From our sample of 33 studies , we extracted information about the programme eval-
uated and its geographic and chronological setting, the sample studied and the methods
applied. We recorded programme type, duration and whether it was designed specific-
ally for immigrants in order to characterise the nature of the treatment. To capture
sample characteristics, we included information on whether an effect was estimated for
males, females or a mixed group of participants as well as in what country and de cade
they received the treatment. As methodological proxies, we documented the economet-
ric technique used
9
and whether the estimates came from a published paper or a work-
ing paper.
10
While the control varia bles applied by the 33 studies vary according to data sources,
there is a set of basic controls common to virtually all the evaluation studies consid-
ered. These include demographic information such as age, sex, family status and house-
hold characteristics and country/region of origin where available. In addition,
socioeconomic characteristics are controlled for at varying levels of detail, using infor-
mation on human capital, labour market history and the place/region of residence and
its labour market.
3.2 Summary statistics
The first colum n of Table 2 summarises the distribution of the short-run estimates
we focus o n. First, consider the outcome variable: those evaluations finding no effect
are most frequent (48 estimates), followed by ones finding significantly positive
Butschek and Walter IZA Journal of Migration (2014) 3:48 Page 6 of 18
effects ( 32), with significantly negative effe ct estimates less frequent still (13
estimates).
Next, lines 2a) to 2e) show that among AL MP t ypes , training programmes
dominate (30 estimates). Public works also feature prominently, contributing 23
data points; the third column reveals that this pattern is driven by e valuations for
Germany. Wage-subsidy (16) and ser vices/sanctions (17) each provide about half
as many obser vations as the largest category. There are se ven estimates in the
residual category (other programmes). Only six of our 93 estimates are for
migrant-specific programmes, whereas 87 are for general ones (see lines 2f) and
2g), respectively).
Lines 3a) through 3c) show that 25 estimates are for programmes with a dur-
ation of up to four months , while 20 effects are estimated for programmes of at
Table 2 Characteristics of the estimation sample
Short-run
estimates
Estimates for
Nordic countries Germany Other countries
1) Estimated programme effect
a) Negative 13 4 1 8
b) Insignificant 48 13 30 5
c) Positive 32 17 12 3
2) ALMP type
a) Training 30 9 13 8
b) Wage subsidy 16 9 3 4
c) Public works 23 5 15 3
d) Services/Sanctions 17 6 10 1
e) Other programmes 7 5 2 0
f) Migrant-specific programme 6 5 0 1
g) General programme 87 29 43 15
3) Programme duration
a) Up to 4 months 25 3 18 4
b) 5 or more months 20 1 15 4
c) Mixed/unknown 48 30 10 8
4) Time evaluated programme ran
a) 1980s 2 2 0 0
b) 1990s 31 15 0 16
c) 2000s 60 17 43 0
5) Method employed
a) Matching 55 4 42 9
b) Duration 29 22 0 7
c) Other method 9 8 1 0
6) Publication status
a) Working paper 65 14 37 14
b) Published 28 20 6 2
Number of estimates 93 34 43 16
Remarks: The table displays absolute numbers. Short-run estimates are defined as effect estimates based on outcomes
observed up to two years after programme start. Where there are more than one such short-term estimates, the latest
(most long-term) one is sampled. Nordic countries include Denmark, Finland, Norway and Sweden. Other countries
include the Netherlands and Switzerland.
Butschek and Walter IZA Journal of Migration (2014) 3:48 Page 7 of 18
least five months. Howe ver, most short-run estimates are for programmes of un-
known or mixed duration (48), reflecting some heterogeneity in the le vel of detail
on inter ventions given in the papers. Lines 4a) through 4c) re veal that about two
thirds of estimates are from the 2000s. Next, lines 5a) through 5c) illustrate that
matching approaches were the most popular method (55 estimates). From column
3, it is clear tha t German estimates, ba sed on matching procedures (with only one
exception), acc oun t for this distrib ution. Finally, lines 6a) and 6b) demonstrate that less
than a third of the short-run estimates came from published papers (28), with Nordic
evaluations accounting for disproportionately many of the publications (20).
11
Comparing estimates by origin reveals that the largest contributor, Germany, differs
markedly from Denmark, Finland, Norway and Sweden (Nordic countries) and
Switzerland and the Netherlands (other countries). Nordic estimates are relatively
optimistic about programme effects , while most German estimates are insignificant,
and effects tend to be more often negative in the other countries. There is more
varietyinthemethodsusedtoevaluateNordicandSwiss/Dutchprogrammesthan
for German programmes. While traini ng is the ALMP ty pe evaluated most frequently
in the Nordic countries and Switzerland/Netherlands , e valuations of public works
dominate in Germany.
3.3 Descriptive analysis
In this subsection, we present the distribution of the outcome variable (short-run effect:
significantly negative, insignificant or significantly positive) con ditional on the covari-
ates we extracted from the studies (see Table 3). This serves a dual purpose: one is to
provide a flavour of the potential results of the meta-analysis; another is to give some
absolute indications of the effectiveness of the programme types evaluated. This is im-
portant because our meta-analysis, by virtue of its method, only allows conclusions
about the relative effectiveness of different types of programmes.
Lines 1a) to 1e) of Table 3 show that insignificant estimates are the largest category
in all types of ALMP except for wage subsidies, where 10 out of 16 estimates are posi-
tive. For training and services/sanctions, about half of the estimates are insignificant,
while for public works, about two thirds are insignificant. For both training and services/
sanctions, positive estimates are more frequent than negative ones, while the converse is
true for public works. These raw descriptive statistics indicate that wage subsidies seem to
have positive employment effects; for the remaining ALMP categories, the evidence
mostly points to an employment effect too close to zero to be significant. Because only six
of the 93 estimates are for migrant-specific programmes (see lines 1f) and 1g), respect-
ively), it is hard to draw reliable conclusions about their relative effectiveness. We effect-
ively focus on the effect of general ALMPs on immigrants.
The next three lines, 2a) to 2c), seem to suggest that duration analysis is more opti-
mistic about programme ef fe ctiveness than matching approaches are. Similarly, lines
3a) to 3c) may p oint to a deterioration of AL MP quality over time from the 198 0s to
the 2 000s. While programme duration is unknown in most cases, short programmes
mayhavebeenmoreeffectivethanlongerones. Finally, published papers seem to find
positive effect s in a higher fraction of c a ses. Yet , regional and chronological differences
may be confounding all of these potential relationships; multivariate analysis will help
disentangle these effe ct s.
Butschek and Walter IZA Journal of Migration (2014) 3:48 Page 8 of 18
4 Empirical analysis
4.1 Method
We perform an ordered probit analysis with sign and significance of the estimate as the
outcome variab le. This variable can take three values: −1 for significantly negative esti-
mates, 0 for estimates insignificantly different from zero, and +1 for significantly posi-
tive estimates. The explanatory variables of interest are dummies describing the type of
ALMP. In addition, we include a number of variables to account for differences in
evaluation technique and setting. We focus on the relationship between ALMP type
and sign/significance of the short-run effect estimated for each study-gender-region
cell.
The index model underlying our estimation is as follows:
y
i
¼ α
1
WS
i
þ α
2
PW
i
þ α
3
SE
i
þ α
4
OT
i
þ X
0
i
β þ u
i
;
where WS, PW, SE and OT are dummy variables describing the programme type ana-
lysed in study i(wage subsidy, public works, services/sanctions, or other programmes,
Table 3 Distribution of the estimated programme effects in the estimation sample
Estimated effect is
Significantly negative Insignificant Significantly positive
1) ALMP type
a) Training 5 14 11
b) Wage subsidy 2 4 10
c) Public works 5 15 3
d) Services/Sanctions 0 9 8
e) Other programmes 1 6 0
f) Migrant-specific programme 0 4 2
g) General programme 13 44 30
2) Method employed
a) Matching 4 38 13
b) Duration 8 6 15
c) Other method 1 4 4
3) Time evaluated programme ran
a) 1980s 0 0 2
b) 1990s 9 11 11
c) 2000s 4 37 19
4) Programme duration
a) Up to 4 months 2 10 13
b) 5 or more months 5 14 1
c) Mixed/unknown 6 24 18
5) Publication status
a) Working paper 11 35 19
b) Published 2 13 13
Number of estimates 13 48 32
Remarks: The table displays absolute numbers. The numbers relate to short-run estimates, which are defined as effect
estimates based on outcomes observed up to two years after programme start. Where there are more than one such
short-term estimates, the latest (most long-term) one is sampled.
Butschek and Walter IZA Journal of Migration (2014) 3:48 Page 9 of 18
with training being the omitted category), X is a vector of control variables (study char-
acteristics, programme characteristics, sample characteristics, contextual controls), and
u is an error term.
Taking into account the degrees of freedom underlying each effect estimate as
well a s a measure of effect size (such as a t-statistic) would be an attractive alter-
native to the sign/significance approach we take (see, e.g., G reenberg et al. 2003,
and Stanley, 2005). It would allow us to identify systematic differences in estimated
effect size across types of programme, unconfounded by differences in precision.
However, the plurality of the underlying econometric estimation techniques makes
this unfeasible.
12
Card et al. (2010) show that the approach w e follow would be invalid if the pattern
of estimate sign and significance were generated by differences in pre cision rather
than differences in effect size. They also demonstrate that the sign/significance
approach is approximately valid when the effective sample size is constant , i.e.,
when larger samples are offset by more demanding designs. They present e vidence
that this is the case in their sa mpl e of studies and indeed find that the sign/significance
approach and an effect size-ba sed analysis on a subsample of studies that use the
probability of employment a s the o utcome variable yiel d similar result s. Whi le we
cannot perform such a check for our smaller set of studies , we can partly rely on
their findings in that there is some overlap between our samples of evaluation
studies.
Recent theoretical work on meta-analyses has stressed the importance of checking
for publication bias (see, e.g., Stanley, 2005). We cannot rule o ut publication bias a s
the test statistics of the st udies we analyse are not dire ctly comparable. In this paper,
however, our focus is the relative effectiveness of different types of ALMPs. As long
as the presence of publication bias does not interact with the type of programme
evaluated, it will not distort our findings on the relative effe ctiveness of different
types of AL MPs.
4.2 Estimation results
We estimate six specifications of the ordered probit model outlined above, gradually
introducing groups of control variables. Specification 1 includes only the type of
programme, omitting training. Specification 2 adds study characteristics: whether the
study employed duration analysis or some other econometric technique (omitted:
matching), and whether the paper is published (baseline: working paper). Specification
3 introduces programme characteristics, namely whether the intervention was designed
for immigrants and whether the treatment was short, that is, no longer than four
months. In specification 4, sample characteristics enter the equation: participant gender
(baseline: pooled estimation for men and women) and treatment in the 2000s (omitted:
1980s or 1990s). Specification 5 adds the unemploy ment rate in the year that t he eval-
uated programme started as a proxy for the macroeconomic context. Alternatively,
specification 6 uses GDP growth as a contextual control.
13
Table 4 presents the results. In specification 1, which includes only programme type,
we obtain positive coefficients for wage subsidy and ser vices/sanctions. The inter-
pretation for these positive coefficient s is that studies e valuating wage subsidies and
ser vices/sanctions are more likely to find positive employment effects than studies
Butschek and Walter IZA Journal of Migration (2014) 3:48 Page 10 of 18
evaluating training. Howe ver, the estimated coefficients are not statistically signifi-
cant. The coefficient s on public work s and other p rogrammes are negativ e, t hough
only the coeffici ent for other programmes is marginally signif icant. There is no mean-
ingful interpreta tion for the coefficient on “other programmes” a s this is a residual
category.
Table 4 Estimation results
(1) (2) (3) (4) (5) (6)
ALMP type (baseline: training)
Wage subsidy 0.5732 0.6987 1.0664** 1.0561** 1.1301** 0.9855*
(0.4398) (0.4890) (0.5051) (0.5279) (0.5116) (0.5400)
Public works −0.5024 −0.4879 −0.1016 −0.1287 −0.2983 −0.1835
(0.3170) (0.3158) (0.3279) (0.4567) (0.4579) (0.4574)
Services/sanctions 0.5002 0.4474 0.342 0.2952 0.2386 0.2475
(0.3303) (0.3394) (0.3480) (0.3803) (0.4049) (0.3886)
Other programmes −0.5985* −0.6727* −0.5925* −0.6039* −0.9004** −0.7541*
(0.3271) (0.3678) (0.3490) (0.3627) (0.3530) (0.4108)
Study characteristics (baseline: matching, working paper)
Duration analysis −0.1694 −0.1524 −0.1252 0.5544 −0.1132
(0.3715) (0.3919) (0.4024) (0.4542) (0.4054)
Other method −0.3006 0.0912 0.1477 0.2542 0.1718
(0.4948) (0.5966) (0.5858) (0.5948) (0.5695)
Published paper 0.6123** 0.7224** 0.7099* 0.9968*** 0.6462*
(0.2846) (0.2997) (0.3704) (0.3727) (0.3681)
Programme characteristics (baseline: regular ALMP, duration unknown or greater than four months)
Migrant-specific programme −0.0546 −0.0768 0.0452 −0.0954
(0.5311) (0.5421) (0.5569) (0.5224)
Short programme (up to 4 months) 0.8051** 0.7990** 0.7728* 0.7464*
(0.3314) (0.4036) (0.4246) (0.4143)
Sample characteristics (baseline: pooled estimation for men and women, 1980s or 1990s programme)
Separate estimation for males 0.2034 −0.0472 0.2282
(0.4502) (0.4486) (0.4762)
Separate estimation for females −0.258 −0.5787 −0.244
(0.4641) (0.4812) (0.4784)
2000s programme 0.1314 −0.3203 0.1842
(0.3374) (0.3653) (0.3358)
Contextual controls
Unemployment rate 0.2167***
(0.0790)
GDP growth rate 0.0615
(0.1074)
Number of observations 93 93 93 93 93 93
Pseudo R-squared 0.0708 0.0925 0.1217 0.1344 0.1777 0.1364
Akaike information criterion 181.9881 184.0131 182.6708 186.3419 180.4334 187.9807
The table displays estimated coefficients of ordered probit models. Heteroskedasticity-robust standard errors in parentheses.
The dependent variable takes value 1 for significantly positive estimates, 0 for insignificant and −1 for significantly
negative estimates. Unemployment and GDP growth rates are annual rates in % for the year the evaluated programme
started. *** denotes p <0.01, ** denotes p <0.05 and * denotes p <0.1.
Butschek and Walter IZA Journal of Migration (2014) 3:48 Page 11 of 18
When including study characteristics (method and publication status) in spe cifica-
tion 2, the results remain very similar. None of the AL MP types are significant ex-
cept for the residual category. Specification 3’s programme features cause the wage
subsidy coefficient t o grow and become significant; all other AL MP type coefficients
remain insig nificant. Includ ing inform ation about the sampl e on the righ t-hand side
in spe ci fication 4 does little to wage subsidy (still signifi cant) and public work s or
ser vices/sanctions (still insignificant). W hen we add contextual control variables in
specification 5 (unemployment rate) and 6 (GDP growth rate), t he coefficient on
wage subsidy remains positive and significant. The parameter estimates on public
works and services/sanctions are still insignificant.
Based on the Akaike information criterion, we choose specification 5 as our preferred
one. Specification 5 contains the national unemployment rate at programme start as a
contextual control variable. The coefficient on the unemployment rate is positive and
significant , suggesting that inferior macroeconomic conditions at the time of treatment
are associated with a higher probability of a positive evalua tion result.
14
Almost all other control variables in specification 5 (and across the other specifica-
tions) have insignificant coefficient estimates. Exceptions are the dummy for short
programme (which is always marginally significant and positive) and the dummy for
published paper (which is positive and at least marginally significant in most specifica-
tions). The dummy for migrant-specific programmes is insignificant. While this implies
that these programmes are equally (in)effective as general ones, this result has to be
interpreted with caution a s the number of studies analysing migrant-specific pro-
grammes is small.
It is worth re-iterating that our ordered probit analysis only permits relative, not ab-
solute, conclusions on the effectiveness of ALMP types. Thus, our meta-analysis sug-
gests that wage subsidies work better than training. Because the corresponding
coefficient s are insignificant, we cannot claim with confidence that public works are
less effective than training or that services/sanctions are more effective, even though
coefficient signs consistently point in that direction.
Combining our conclusions from the meta-analy sis with the descriptive analysis in
section 3 suggests that wage subsidies not only work better than other programmes but
also do have positive employment effects on immigrants. The descriptive results appear
most pessimistic about public works, as do the meta- analytic results (albeit insignifi-
cant), suggesting at the least that this type of programme should be used very select-
ively. Insignificant programme estimates dominate the descriptive analysis of training
and job search assistance. No firm conclusions can be drawn on the suitability of these
activation measures for immigrants in the short run. Additional research on the longer-
run employment effects may help clarify the picture.
Our findings are based on a smaller sample of studies and on a more specific group
of programme participants than the meta-analyses of Kluve (2010) and Card et al.
(2010) but point in a similar direction. Moreover, they are in line with the conclusions
that Nekby (2008) and Rinne (2013) arrived at in their qualitative reviews.
In parts of Europe at least, actual labour market policy seems to diverge from the al-
location implied by our results. In Germany, the smallest ALMP category among immi-
grants is wage subsidies: less than 10 percent of immigrants in ALMPs participate in
this type of programme. Moreover, when comparing them to natives, immigrants are
Butschek and Walter IZA Journal of Migration (2014) 3:48 Page 12 of 18
more often assign ed to training, public works and job search assistance programmes
than to wage subsidy programmes. In 2012, the immigrant share among wage subsidy
participants was 12.0% as compared to 13.7% for public works, 17.7% for training and
12.4% for job search assistance (excluding sanctions ) participants. For earlier years, the
figures are similar or more heavily skewed towards training and public works (Statistik
der Bundesagentur für Arbeit, 2013).
15
4.3 Robustness analysis
To address the potential criticism that our criteriafortheselectionofstudies(see
section 3.1) were to some extent arbitrary, we vary these criteria and re-estimate our
preferred specification on the sample of estimatesthisgives.Thisprovidesasimple
check on the robustness of ou r result s. Our variation is to tighten the definitions of
ALMPs and of the short run.
First, we drop estimates for programmes that, strictly speaking, are not ALMPs. That
is, we exclude evaluation studies of temporary agency work, which, like wage subsidy
programmes, make hiring cheaper and may facilitate employer-worker matching, and
exclude transfer reduction programmes, which work much like sanctions. Moreover,
we exclude evaluations of aggregate ALMP effects. Second, we define the short run as
up to twelve months after programme start rather than 24 months.
This gives an alternative sample of 86 estimates from 27 studies. As Table 5 illustrates,
our variation results in a very similar pattern of coefficient estimates, providing evidence
for the robustness of our findings (see Additional file 1: Table S2 for the full results). In
the a dditional file, we also include the results of both main and robustness analysis
when standard errors are clustered at the study le ve l
16
. As Additional file 1: Table S3
Table 5 Sensitivity analysis
Preferred Variation
ALMP type (baseline: training)
Wage subsidy 1.1301** 1.2955**
(0.5116) (0.6004)
Public works −0.2983 −0.2629
(0.4579) (0.4553)
Services/sanctions 0.2386 0.2203
(0.4049) (0.4010)
Other programmes −0.9004** −1.0741**
(0.3530) (0.4343)
Method yes yes
Programme characteristics yes yes
Sample characteristics yes yes
Contextual controls UE UE
Number of observations 93 86
Pseudo R-squared 0.1777 0.1821
Akaike information criterion 180.4334 171.6131
The table displays the estimated coefficients of ordererd probit models. Heteroskedasticity-robust standard errors are in
parentheses. "Preferred" reproduces the results from column (5) in Table 4. “Variation” tightens the definition of ALMP
and the short run, eliminating 6 studies. UE is for unemployment rate. ** denotes p < 0.05.
Butschek and Walter IZA Journal of Migration (2014) 3:48 Page 13 of 18
and Table S4 illustrate, these are practically the same as those presented in the
main text.
5 Conclusion
Immigrants constitute an important group in European labour markets in terms of
both the risk s they face and the potential they harbour: they are numerous and
over-represented in unemployment on the one hand but younger than the native
population on the other. This highlights the importance of immigrants’ labour mar-
ket integration. While the full range of ALMPs is used in practice, there is little
empirical guidance for policy-makers seeking to facilitate immigrants’ employment
take-up. In other wor ds , ther e is not yet a clear indication of what programmes
work for immigrants.
To answer this question, we pro vide a quantitative synthesis of the evidence on
ALMPs’ effect on immigrants. Using 93 effect estimates extracted from 33 relevant
evaluation studies, we perform a meta-analysis of the evalua tion results. An ordered
probit analysis based on sign and significance of short-run effect estimates suggests that
wage subsidies work better for immigrants than train ing programmes. Public works
may be less effective than trainings while job search assistance programmes (services/
sanctions) may be more effective but estimated coefficients are insignificant. To help
interpret these relative statements, we present a detailed descriptive analysis: we find
effect estimates for wage subsidy programmes are mostly positive, suggesting that wage
subsidies are indeed a promising measure to increase employment rates of immigrants.
They should be used more often than public works, which reduce employment chances
or result in insignificant employment effects at best. The short-run effects of services/
sanctions on employment prospects are mostly insignificant. The same is true for
training.
At this point, only wage subsidies can be confidently re commended to policy-
makers using general ALMPs to improve immigrants’ labour market integration. An
example for an immediate policy implicationofourresultsisinGermany,where
wage subsidy programmes a re rarely used for immigrant s. Moreover, they are used
more scarcely for immigrants than for natives , while our result s (combined with the
findings of recent meta-analyses of the effect of AL MPs on unemployed workers in
general) suggest they should be used at least as often for immigrant s as for natives.
Further research should aim to clarify why no significant effects of the other types of
programmes have been found. Furthermore, migrant-specific interventions such as lan-
guage courses and introduction programmes, on which the evidence is still scarce, may
be promising; further research in this area is warranted as well.
Endnotes
1
Note that this figure includes only the first generation of immigrants. Unfortunately,
comparable data on immigrants across European countries including the second or
third generation are not available.
2
If the migrant-specific programmes were successful in integrating all newly-arriving
immigrants into the labour market and into stable jobs, there would not be any need
for participation in general ALMPs later on.
Butschek and Walter IZA Journal of Migration (2014) 3:48 Page 14 of 18
3
Keywords, in different combinations, include: ALMP, labour market programmes,
labor market programs, migrants, foreign, native, born, citizen, subgroup, sub-group,
hetero; search engines used: Google Scholar, EconPapers and Econis.
4
The definition of immigrants varies across studies. It usually means those with for-
eign citizenship, the foreign-born or individuals whose parents or grandparents were
foreign-born. Most studies estimate heterogeneous ALMP treatment effects for several
subgroups, one of them is immigrants. A few studies have a sample of only immigrants.
5
When looking at employment, one study considers earnings. Another, evaluating the
promotion of self-employment, uses yet a different outcome variable: neither un-
employed nor in receipt of unemployment benefits.
6
While we do have information on longer-run outcomes (38 estimates), there is not
enough variation in them to permit a separate econometric analysis. One study reports
only long-term estimates for 36 and 50 months after the programme (Groß V, Rothgang
M, Schumacher M: A comprehensive evaluation of ESF financed labour market policy in
Germany, unpublished). This study is dropped from the analysis.
7
See the references section for the list of the 33 studies analysed.
8
Since only 6 out of the 33 studies analyse migrant-spe cific programmes, our econo-
metric analysis cannot differentiate between these types of ALMPs, as outlined in se c-
tion 2. Instead, we define a dummy variable to indicate whether a program me is
migrant-specific or general. We then classify migrant-specific programmes as training,
wage subsidy, public work s, services/sanctions or other programme, depending on their
content.
9
We distinguish identification strategies based on matching, instrumental variables
and duration-analysis. All duration-analysis studies are identified, applying the timing-
of-events approach or variants thereof.
10
We categorised PhD dissertations as published studies because of the similarities
between PhD supervision and the referee process.
11
We do not intend to suggest that published papers meet different quality standards
than working papers , given that we are agnostic about the relative quality of the various
refereed journals and opt for estimates from working papers in some cases where the
published version no longer presents all heterogeneous effect estimates, e.g., Gerfin and
Lechner (2000).
12
It is not straightforward how test statistics from different types of models can be
transformed into a common distribution so that the test statistics can be compared dir-
ectly. For instance, test statistics from a duration model and a matching model will
have different distributions (and degrees of freedom).
13
Unemployment rates and GDP growth rates were obtained from the Online OECD
Employment database; see http://www.oecd.org/employment/employmentpoliciesanddata/
onlineoecdemploymentdatabase.htm (accessed on 7 January, 2013).
14
This result is in line with the findings of Lechner and Wunsc h (2009), who show a
positive correlation of the unemployment rate at the start of the programme with the
effectiveness of training programmes in Germany.
15
Statistik der Bundesagentur für Arbeit (2013) defines immigrants as fore igners,
naturalised citizens and ethnic German resettlers.
16
Several studies pres ent estimates for the effects of multiple programmes. These
estimates are based on different samples of people though. This is why we regard the
Butschek and Walter IZA Journal of Migration (2014) 3:48 Page 15 of 18
estimates as independent. It may be argued that author ’s individual research strategies
introduce correlation between multiple estim ates of one study – in which case cluster-
ing at the study level would be appropriate.
Studies used in meta-analysis
Ahmad, Nisar and Michael Svarer (2010): “The Effe ct of Sanctions and Active Labour
Market Programmes on the Exit Rate from Unemployment”. Working paper.
Aldashev, Alisher, Stephan L. Thomsen and Thomas Walter (2010): “Short-term
training programs for immigrants in welfare: Do effe cts differ from natives and why?”
ZEW Discussion Paper 10-027.
Andersson Joona, Pernilla and Lena Nekby (2012): “Intensive coaching of new immi-
grants : an evaluation based on random program assignment”. Scandinavian Journal of
Economics 114(2), 575-600.
Andrén, Thomas and Daniela Andrén (2006): “Assessing the employment ef fects of
vocational training using a one-factor model”. Applied Economics, 38, 2469-2486.
Andrén, Thomas and Björn Gustafsson (2004): “Income effects from labor market
training programs in Sweden during the 1980s and 1990s”. International Journal of
Manpower, 25, 8, 688-713.
Aslund, Olof and Per Johansson (2011): “Virtues of SIN: Can intensified public efforts
help disadvantaged immigrants?” Evaluation Review 35(4), 399-427.
Bernhard, Sarah, Hermann Gartner and Gesine Stephan (2008): “Wage subsidies for
needy job-seekers and their effect on individual labour market outcomes after the German
reforms”. IAB Discussion Paper 21/2008.
Bernhard, Sarah and Thomas Kruppe (2012): “Effectiveness of further vocational
training in Germany”. IAB Discussion Paper 10/2012.
Bernhard, Sarah and Joachim Wolff (2008): “Contracting out placement services in
Germany”. IAB Discussion Paper 5/2008.
Caliendo, Marco and Steffen Künn (2010): Start-up subsidies for the unemployed:
long-term evidence and effect heterogeneity”. IZA Discussion Paper No. 4790.
Clausen, Jens, Eskil Heinesen, Jans Hummelgaard, Leif Husted and Michael Rosholm
(2009): “The effect of integration policies on the time unt il regular employment of
newly arrived immigrants: Evidence from Denmark”. Labour Economics 16, 409-417
Delander, Lennart , Mats Hammarstedt, Jonas Mansson and Erik Nyberg (2005): “In-
tegration of immigrants: The role of language proficiency and experience”. Evaluation
Review 29/1, 24-41.
Gerfin, Michael and Michael Lechner (2000): “Microe conometric evaluatio n of the
Active Labour Market Policy in Switzerland”. IZA Discussion Paper No. 154.
Hartig, Martina , Eva Jozwiak und Joachim Wolff (2008): “ Trainingsmaßnahmen:
Für welche unter 25-jährigen Arbeitslosengeld II-Empfänger erhöhen sie die
Beschäftigungschancen?” IAB-Forschungsbericht 6/2008.
Heinesen, Eskil, Leif Husted and Michael Rosholm (2011): “The effects of Active
Labour Market Policies for immigrants receiving social assistanc e in Denmark”.IZA
Discussion Paper No. 5632.
Hohmeyer, Katrin and Joachim Wolff (2007): A fistful of Euros. Does one-euro-job
participation lead means-tested benefit re cipients into regular jobs and out of un-
employment benefit II receipt?” IAB Discussion Paper 32/2007.
Butschek and Walter IZA Journal of Migration (2014) 3:48 Page 16 of 18
Huber, Martin, Michael Lechner, Conny Wunsch and Thomas Walter (2009): “Do
German Welfare-to-work programmes reduce welfare dependency and increase
employment?” German Economic Review 12(2), 1-23.
Jahn, Elke and Michael Rosholm (2012): “Is Temporary Agency Employment a
Stepping Stone for Immigrants?” IZA discussion paper no. 6405
Kjaersgaard, Lene and Eskil Heinesen (2012): “Effects of consecutive Active Labor
Market Programs – evidence from immigrants in Denmark”. Ph.D. Dissertation.
Lalive, Rafael, Jan C. van Ours and Josef Zweimüller (2002): “The impact of Active
Labor Market Programs on the Duration of Unemployment”. Institu te for Empirical
Research in Economics Working Paper No. 41.
Larsson, Laura, Lindqvist, Linus and Oskar Nordström Skans (2005): “Stepping-
stones or dead-ends? An analysis of Swedish replacement contracts”. IFAU working
paper 2005:18.
Prey, Hedwig (2000): “Evaluation of Training Programs in St. Gallen, Switzerland”.
Schweiz. Zeitschrift für Volkswirtschaft und Statistik.
Richardson, Katarina and Gerard J. van den Berg (2008): “Duration dependence
versus unobserved heterogeneity in treatment effects: Swedish labor market training
and the transition rate to employment.” IFAU Working Paper 2008:7.
Ronsen, Marit and Torbjorn Skardhamar (2009): “Do welfare-to-work initiatives
work? Evidence from an activation programme targeted at social assistance recipients
in Norway”. Journal of European Social Policy 19, 61-77
Rosholm, Michael and Rune Vejlin (2010): “Reducing income transfers to refugee
immigrants: Does start-help help you start?” Labour Economics 17, 258-275
Sarvimäki, Matti and Kari Hämäläinen (2012): “Assimilating immigrants. The impact
of an integration program”. Updated version of HECER Discussion Paper No. 306.
Sianesi, Barbara (2001): “An evaluation of the active labour market programmes in
Sweden”. IFAU working paper 2001:5
Svarer, Michael (2010): “The Effect of Sanctions on Exit from Unemployment:
Evidence from Denmark”. Economica 78, 751-778
Thomsen, Stephan L. and Thomas Walter (2010): “Temporary extra jobs for immigrants:
Merging lane to employment or dead-end road in welfare?” Labour 24(s1), 114-140 .
Van den Berg, Gerard J., Bas van der Klaauw and Jan C. van Ours (2004): “Punitive sanc-
tions and the transition rate from welfare to work”. Journal of Labor Economics 22(1).
Walter, Thomas (2012): “Germany’s 2005 Welfare Reform. Evaluating Key Character-
istics With a Focus on Immigrants”. ZEW Economic Studies, Vol. 46, Physica-Verlag,
Heidelberg.
Wolff, Joachim and Anton Nivorozhkin (2008): “
Start me up. The effectiveness of a
self-employment programme for needy unemployed people in Germany”. IAB Discus-
sion Paper 20/2008.
Wolff, Joachim and Eva Jozwiak (2008): “Do short-term training programmes active
means-tested unemployment benefit recipients in Germany?” LASER Discussion Paper
No. 12.
Additional file
Additional file 1: Appendix.
Butschek and Walter IZA Journal of Migration (2014) 3:48 Page 17 of 18
Competing interests
The IZA Journal of Migration is committed to the IZA Guiding Principles of Research Integrity. Both authors declare
that they have observed these principles.
Acknowledgements
This paper has benefited from discussion at the Norface Migration Network Conference 2013 in London, the ESPE
Annual Conference 2013 in Aarhus, the EEA Annual Congress 2013 in Gothenburg and the Jahrestagung des Vereins
für Socialpolitik 2013 in Düsseldorf. We thank Stephan Dlugosz and Stephan L. Thomsen as well as an anonymous
referee for their insightful comments. Annette Hillerich and Michael Josten provided valuable help with finding the
relevant studies. All remaining errors are ours.
Resposible editor: Amelie Constant.
Received: 14 May 2014 Accepted: 9 November 2014
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