What lessons can be learned from municipal employment trials?

Summary

Two municipal employment trials were conducted in Finland during 2012–2015 and 2017–2018. In this study we use open, municipal level data to analyse the effects of these trials on unemployment and participation in active labour market measures. We combine propensity score matching and difference-in-differences methods to study the causal effects of the trials. In the first trial, 61 municipalities were selected out of 129 applicant municipalities. The matching method left 50 treatment municipalities for the analysis. In the second trial, the ultimate sample size was 22 matched treatment municipalities out of 23 participants from a pool of 77 applicant municipalities.

No statistically significant effects were found in the first trial. The latter trial showed no effects on extended unemployment, but the activation rate increased by 5 percentage points in treated municipalities. The long-term unemployment rate also fell in treated municipalities during the latter trial, but this was probably attributable to increased participation in activation measures.

Publication Information

Nieminen, J., Kanninen, O. & Karhunen, H. (2021), Mitä työllisyyden kuntakokeiluista voidaan oppia? Yhteiskuntapolitiikka, 86:1, p. 39–49.