The signalling value of labour market programs

Abstract

This article investigates how employers interpret participation in labour market programmes when assessing job candidates. We hypothesize that employers use programme participation to sort applicants. On the basis of a factorial survey experiment, we simulated the recruitment process for two positions requiring different skills in the hotel sector. Recruiters were asked to evaluate fictitious candidates who differ in their participation in active labour market programmes. Our results show that employers take programme participation into account when assessing a candidate. Its impact can be positive or negative depending on the candidate’s distance from the labour market. Candidates more distant from the labour market are evaluated better if they have participated in a programme. For stronger candidates, instead, participation can act as a stigma and worsen the assessment made by the recruiter.