%0 Report %A Saint-Paul, Gilles %T Can Active Labor Market Policy Be Counter-Productive? %D 2014 %8 2014 Oct %I Institute of Labor Economics (IZA) %C Bonn %7 IZA Discussion Paper %N 8551 %U https://www.iza.org/index.php/publications/dp8551 %X We study active labor market policies (ALMP) in a matching model. ALMPs are modelled as a subsidy to job search. Workers differ in their productivity, and search takes place along an extensive margin. An additional job seeker affects the quality of unemployed workers. As a result, the Hosios conditions are no longer valid. To replicate the optimum the worker share in bargaining must exceed the Hosios level, and one must impose a tax on job search activity. The coalition in favor of ALMP is also studied. %K active labor market policy %K matching models