Does ‘Work for the Dole’ work?*

This study examines the effect of a community-based work experience program Work for the Dole (WfD) on transitions out of unemployment in Australia. To evaluate the WfD program a quasi-experimental exact matching approach is applied. Justification for the matching approach is a ‘natural experiment’ limits on WfD project funding that it is argued constituted a source of random assignment to the program. Participation in the WfD program is found to be associated with a large and significant adverse effect on the likelihood of exiting unemployment payments. The main potential explanation is existence of a ‘lock-in’ effect whereby program participants reduce job search activity. Word count (text + endnotes): 8,607 JEL code: J60, J68, I38