1 Virtues of SIN – Effects of an immigrant workplace introduction program Olof Åslund and Per Johansson

2 Outline Introduction The SIN program – regulations and methods Who participates in SIN? What happens when someone enters SIN? Methodological considerations The effects of SIN Concluding remarks

3 Introduction SIN = ”workplace introduction for certain immigrants” Substantial problems of labor market integration –Unemployment –Low-skill jobs for the highly educated Many political attempts: priority at the PES, local introduction programs, neighborhood development programs etc.

4 The SIN trials 20 municipalities Since September 1, 2003 (extended through 2006) Targeted groups: –Refugees and immigrants age 20 or above In or having completed local introduction programs (At risk of becoming) long-term unemployed Capable of taking a job immediately –SIN ”best alternative available” SEK 126 million, 4,781 entered in –Extra funding for special case workers

5 Why interesting? Identify policies that are effective for disadvantaged groups Potentially ”new” methodology Non-standard evaluation problem: SIN may affect many parts of the process Realistic and challenging evaluation situation –Policy makers need answers – can we provide reliable ones with less than ideal settings?

6 The six steps of SIN - ”supported employment” 1.Job searcher analysis 2.Job gathering 3.Work analysis 4.Workplace introduction 5.Follow-up 6.Employment

7 Previous studies on SIN Ams (2005) report to the Ministry of Industry: –Generally positive to SIN –Not up and running before fall 2004 –Steps 1-3 most important. Interviews with participants, officers and employers (Hernemar 2004, Lindgren Åsbrink 2005) –”Job ready” –Time  good matches SIN = search and matching assistance(?)

8 The data IFAU database + SIN information –Entire population 16-65, Inflow to unemployment Jan 1, 2000  Nov 15, 2005 –Transitions to: Employment, Subsidized employment, Work experience, ”Other” years old at unemployment entry, born outside the Nordic countries Registered at PES office in SIN local labor market –About 220,000 individuals

9 Where were the SIN participants born?

10 When did the participants come to Sweden?

11 SIN participants vs other unemployed SIN participants Non- participants Primary education (%) Secondary education (%)36.2 Tertiary education (%) Coded as not eligible for benefits (%) Average time in open unempl Average time in LMP Employment Average earnings ,20058,350

12 Status 3 days before SIN StatusFreq.Percent Unemployed5, Employed Subs. employment Work experience Other Total7,292100

13 On the day of SIN entry 3 days beforeUnempl.Empl. Subs empl. Work expOther Day of entry Unemployed Employed Subs. empl Work exp Other Total

14 Implications for the analysis Cannot compare participants to non-participants –SIN start and end dates ”soft” –Strong selection on unobserved characteristics Use ”reduced form” analysis at the municipal level –”SIN” = registered in SIN location in SIN period –DD type of estimator: before-after in treatment and control

15 Is a DD setup appropriate? Compare to ”imaginary reform” in September 2002

16 Potential effects of SIN EmploymentUnemployment Other Empl. subsidy Work exp.

17 The outflow from unemployment From open unemployment to Actual SIN reform Imaginary reform 2002 Employment+12.4%+10.5% Subs. Empl.(+5.6%)(+4.5%) Work experience+14.0%(–1.0%) Women+17.5%(–2.5%) Men+10.5%(+2.2%) “Other”+4.8%(+1.8%)

18 To employment from IMT:s To employment fromActual SIN reform “Fake reform” 2002 Any IMT(+2.6%)(–1.6%) Subs. Employment(–3.9%)(+4.0%) Work experience+14.6%(–4.6%) Women+19.3%(–7.4%) Men(+9.4%)(–4.8%) “Other”(+0.8%)(–2.6%)

19 Robustness checks Restrict to Asia, Africa and Europe excl. EU15 High propensity score individuals Let SIN start on September 1, 2004 –Somewhat stronger results for work experience. By region of residence Covariates Stratification by calendar time and propensity score

20 Comparing the costs and benefits of SIN Expected days in work: (baseline)600 Jobs created:Estimated cost per job-year 2005 (SEK) ,000307,000256, (baseline)338,000270,000225, ,000230,000192, ,000184,000153,000

21 Concluding remarks Evaluate the effects of SIN SIN increased the flow from unemployment to work experience schemes, and the flow from work experience to employment. Is SIN a new approach to labor market policy? –In theory perhaps, but not in practice –Matching and search assistance: expect positive results?