Effectiveness of the Public Work Program in Slovenia

This paper evaluates the direct effects of the Slovenian public work pro-gram on the youth. The effectiveness of the program is measured by re-employment probability. A Heckman correction of selection is ap-plied to estimate the average program effects. The Heckman selection estimator is an extensively used method to control for selection on un-observed variables. It relies on the assumption that a specific distribu-tion of the unobservable characteristics jointly influences participation and outcome. The results of the empirical study indicate that the public work program has a positive effect on employment in the short run. In the long run, however, the results are not so obvious. Key Words: active employment policies, evaluation, Heckman procedure, selection, treatment effect