Danish Economic Council

Since 1994, unemployed workers in the Danish labor market have participated in active labor market programs at a large scale. This paper contributes with an assessment of costs and benefits of these programs. Long-term treatment effects are estimated on a very detailed administrative dataset by propensity score matching. For the years 1995-2000 it is found that private job training has positive employment and earnings effects, but also public job training and classroom training end up with positive effects when a long enough time horizon is allowed. When the cost side is taken into account, then all three program types come out with surplusses