A comprehensive microeconometric evaluation of an active labour market policy: application to the portuguese economy (first draft)

The traditional evaluation literature, where the subject of the evaluation is the participation in an exclusive treatment, does not capture the reality of the active public interventions in the European labour markets. That is the case of the Portuguese economy characterized by the heterogeneity of ongoing programmes that are available for the universe of potential unemployed participants. So, this paper presents a comprehensive evaluation of the Portuguese active labour market policy in a multiple treatment context. Our approach to assess the effectiveness of the Portuguese active labour market policy, to the improvement of the employability of participants, combines propensity score matching techniques with the conventional difference-in-differences estimation to construct the relevant counterfactual under the hypothesis of selection on unobservables. The results are very heterogeneous among participants in the different active programmes in the short-run but that diversity of results tends to converge in the long-run