How scary is it?Review of literature on the threat effect of active labor market programsaf Signe Hald Andersen

This paper reviews studies on the threat effect of active labor market programs (ALMPs). The literature is limited, but evidence consistently shows that facing a threat of mandatory program participation affects exits from unemployment. Thus, despite little evidence of an actual program effect of ALMPs, there is reason to believe the programs work indirectly by scaring unemployed people away from unemployment.