This paper develops a life-cycle model of labour supply that captures endogenous human capital formation allowing for individual's heterogeneous responses to stochastic labour market shocks. The shocks determines conditions in the labour market and sort individuals into three labour market...

Many European countries entertain considerable active labour market policies (ALMP) to increase the reemployment chances of the unemployed. Since policies are very costly the pressure for scientific evaluations of the single programmes that are part of the ALMP increases. This paper surveys...