Side effects of labor market policies

Labor market policies, such as training and sanctions, are commonly used to bring workers back to work. By analogy to medical treatments, exposure to these tools may have side effects. We study effects on health using individual-level population registers on labor market outcomes, drug prescriptions, and sickness absence, comparing outcomes before and after exposure to training and sanctions. Training improves cardiovascular and mental health and lowers sickness absence. This is likely due to instantaneous features of participation, like the adoption of a more rigorous daily routine, rather than improved employment prospects. Benefits sanctions cause a short-run deterioration of mental health. This article is protected by copyright. All rights reserved.