Evaluating the Effectiveness of Active Employment Policy

Active employment policies are essentially public interventions in the labor market, while the culture of evaluating the effectiveness of employment programs is very low. Based on scientific methodology there are few studies on the evaluation of the effectiveness of employment programs in Slovenia. This leads to overestimation of the results and inadequate distribution of resources. In this paper we define the problem of causality as well as some formal facts for evaluating the effects of active employment policy. In the empirical analysis we use the propensity score matching method to estimate the effectiveness of the public work program. The results suggest that the program has positive, but very weak effects in the short run.