Does subsidised temporary employment get the unemployed back to work? An econometric analysis of two different schemes

Subsidised employment is an important tool of active labour market policies to improve the reemployment chances of the unemployed. Using unusually informative individual data from administrative records we investigate the effects of two different schemes of subsidised temporary employment implemented in Switzerland: non-profit employment programmes (EP) and a subsidy for temporary jobs (TEMP) in private and public firms. Econometric matching methods show that TEMP is more successful than EP in getting the unemployed back to work. Compared to not participating in any programme EP and TEMP are ineffective for unemployed who find jobs easily anyway or have a short unemployment spell. For potential and actual long term unemployed both programmes may have positive effects, but the effect of TEMP is larger.