Employing the unemployed of Marienthal

In this public lecture Prof. Kasy presented his work on scientifically evaluating the guaranteed job program (MAGMA) that started in October 2020, in the municipality of Gramatneusiedl. This program provided individually tailored, voluntary jobs to all long-term unemployed residents.

The evaluation was based on three estimation approaches:

- The first approach uses pairwise matched randomization of participants into waves for program adoption;
- The second approach uses a pre-registered synthetic control at the municipality level;
- The third approach compares program participants to observationally similar individuals in control municipalities.

These different approaches separated out direct effects of program participation, anticipation effects of future participation, and municipality-level equilibrium effects.

Although the study found strong positive impacts of program participation on participants’ economic (employment, income, security) and non-economic wellbeing (social recognition, time structure, social interactions, collective purpose), it did not find effects on physical health, or risk- and time-preferences.

At the municipality level, a large reduction of long-term unemployment was found, and a slightly attenuated reduction of total unemployment. There is evidence of positive anticipation effects in terms of subjective wellbeing, status, and social inclusion for future program participants, relative to ineligible control-town individuals.