Improving the effectiveness of policy instruments

To assess whether policies are efficient and whether allocating scarce resources to active labor market programs makes sense, it is pivotal to evaluate their effects using careful methods and high-quality data. Recently, rich administrative register data have become widely available, allowing us to discover which participants in a program actually benefit from it, how it affects those who do not participate, how large are its long-run effects and to what extent awareness of potential future program participation affects current behavior. To address these issues IZA experts apply a broad range of econometric and simulation approaches. Using these techniques IZA provides independent advice to policymakers – pursuing the objective to improve the effectiveness of policy instruments and to contribute to a more targeted allocation of financial resources.

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