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This paper addresses the impact of active labor market programs on interregional migration in Sweden. The purpose of the study is to determine the extent to which the programs, which provide training and labor market assistance to jobless individuals, induce participants to migrate. Analysis is based on data registers compiled in 1994 and 1995 by Statistics Sweden and the Labor Market Board of Sweden. The paper specifies and estimates a two‐equation model of participation and subsequent migration. The model, which is estimated by the method of maximum simulated likelihood, accounts for the role of program participation as an endogenous choice variable in the decision to migrate. In an attempt to capture the effect of migrant self‐selection, the estimation approach also controls for unobserved heterogeneity in the participation and migration equations....
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