Evaluation of an active labour market programme in a context of high unemployment

We evaluate the effectiveness of a programme aimed at a group of unemployed in the capital of the South of Spain, within the framework of Active Labour Market Policies (ALMPS). We use high quality administrative data which justifies the application of propensity score matching methods. The estimated effects are positive with regard to employment, job security, and working hours in the short-term (6 months). However, this is not true in the long-run (36 months). No significant effects have been found on earnings, in neither the short nor long-term. Overall these results are quite robust with respect to the matching algorithm choice and the potential influence of unobserved heterogeneity. Although, the short duration of the programme seems appropriate, the disappointing long-term results highlight the difficulties of putting participants back into stable work in a context of high unemployment.