The paper presents a theoretical analysis of the macroeconomic effects of active labour market programmes in a dual labour-market framework. The paper uses the Shapiro-Stiglitz efficiency-wage model. Active labour market programmes train unskilled labour and transfer them from a...

The paper formalises the interaction between active labour market programmes and ordinary higher education in a general equilibrium framework. Both education in prorgammes and ordinary higher education serve to increase the supply of high-skilled labour. The model features a dual labour market...