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Virtues of SIN– Effects of an immigrant workplace introduction program

Olof Åslund and Per Johansson

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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

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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.

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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 2005.

– Extra funding for special case workers

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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?

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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

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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(?)

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The data

• IFAU database + SIN information– Entire population 16-65, 1985-

• Inflow to unemployment Jan 1, 2000Nov 15, 2005– Transitions to: Employment, Subsidized employment,

Work experience, ”Other”• 20-63 years old at unemployment entry, born outside

the Nordic countries• Registered at PES office in SIN local labor market

– About 220,000 individuals

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Where were the SIN participants born?

0 .1 .2 .3 .4fraction

Saknas

Oceanien

Asien

Sydamerika

Nordamerika

Afrika

Europa utom EU15

EU15

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When did the participants come to Sweden?

0 .1 .2 .3fraction

unknown

-1979

1980-1984

1985-1989

1990-1994

1995-1999

2000-2003

2004-05

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SIN participants vs other unemployed

SIN participants

Non-participants

Primary education (%) 32.3 33.9

Secondary education (%) 36.2 36.2

Tertiary education (%) 31.4 29.7

Coded as not eligible for benefits (%) 32.4 42.5

Average time in open unempl. 669.6 560.2

Average time in LMP 291.7 213.2

Employment 2002 35.6 36.1

Average earnings 2002 59,200 58,350

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Status 3 days before SIN

Status Freq. Percent

Unemployed 5,133 70.39

Employed 784 10.81

Subs. employment 54 0.74

Work experience 340 4.66

Other 977 13.44

Total 7,292 100

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On the day of SIN entry

3 days before Unempl. Empl.Subs

empl.Work

exp Other

Day of entry

Unemployed 16.15 22.09 13.66 40.04 8.07

Employed 0.25 70.43 11.93 14.85 2.54

Subs. empl 0.00 5.56 88.89 1.85 3.70

Work exp 4.41 18.24 27.35 47.35 2.65

Other 5.22 15.35 19.55 22.31 37.56

Total 12.30 26.11 15.46 35.00 11.14

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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

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Is a DD setup appropriate?

• Compare to ”imaginary reform” in September 2002

SIN periodNon-SIN period

.24

.26

.28

.3.3

2.3

4F

ract

ion

in w

ork

-8 -6 -4 -2 0 2180-day periods from September 1, 2003

Non-SIN location SIN location

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Potential effects of SIN

EmploymentUnemployment

Other

Empl. subsidy

Work exp.

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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%)

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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%)

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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

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Comparing the costs and benefits of SIN

Expected days in work:

400 500 (baseline) 600

Jobs created: Estimated cost per job-year 2005 (SEK)

300 383,000 307,000 256,000

340 (baseline) 338,000 270,000 225,000

400 287,000 230,000 192,000

500 230,000 184,000 153,000

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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?