Do Labour Market Programmes Speed up the Return to Work?

We evaluate the impact of labour market programmes on unemployment durations in Norway, by means of a distribution-free mixed proportional competing risks hazard rate model. We find that programme participation, once completed, improves employment prospects, but that there is often an opportunity cost in the form of a lock-in effect during participation. The average net effect of programme participation on the length of the job search period is found to be around zero. For participants with poor employment prospects, the favourable post-programme effects outweigh the negative lock-in effects. Copyright 2006 Blackwell Publishing Ltd.