Active Labour Market Policies, Job Matching and the Czech Miracle

A common explanation of low unemployment rates in the Czech Republic (CR) is the stance of active labour market policies (ALMPs), in particular the extensive use of ALMP instruments and an effective delivery system. Using a large panel of quarterly data from employment office districts, we estimate the effects of ALMPs on the job matching process in the CR. In so doing, we address potential endogeneity in the provision of resources to district labour offices. We continue to find a small, but statistically significant effect of ALMP expenditures, job creation, and programme intakes on outflows from unemployment into employment.