Fostering Soft Skills in Active Labor Market Programs: Evidence from a Large-Scale RCT

We evaluate the effectiveness of an Active Labor Market Program that focuses on enhancing soft skills of welfare recipients using a large-scale RCT. The program increased participants’ employment rates and decreased income support recipiency. The effects persist five to six years after its implementation, even during the Covid-19 crisis. The analysis of the mechanisms shows positive effects on participants’ soft skills, mainly among those with no recent employment spell, who gradually joined the labor market after participation in the program. In contrast, individuals with a recent employment spell went back to employment soon after their allocation to the program.