The Effects of a Job-Creation Scheme: Evidence from Regional Variation in Program Capacities.

In direct job-creation schemes, unemployed individuals at risk of permanent labor market exclusion are offered temporary subsidized employment in public- or nonprofit-sector firms in combination with skills training and sociopedagogical support. The main aim is to stabilize and qualify them for later re-integration into the regular labor market. Exploiting exogenous regional variation in population-group-specific program capacities, I find that, on average, such a program eases the transition out of unemployment but has no long-term effect on regular employment. [ABSTRACT FROM AUTHOR]