The impact of labor reactivation on employability and well-being: an RCT with Red Cross Spain

Active labor market programs (ALMPs) are widely used to boost employment prospects for individuals at risk of social exclusion, though evidence on their effectiveness remains mixed. While most studies focus on single interventions, less is known about the impact of combining multiple ALMPs that may complement each other to enhance both employability and psychological well-being. This paper evaluates the incremental impact of a comprehensive ALMP bundle delivered in partnership with Red Cross Spain to facilitate reinsertion in the labor market. Participants were randomly assigned to a control group with access to Red Cross’s regular services or to a treatment group that received additional interventions, including psychological support, soft skills development, digital literacy, certified professional courses and job search assistance. Using administrative data, we find no significant differential effects of the treatment on employment outcomes immediately after the intervention, or six and twelve months later. However, the program does improve certain outcomes related to employability and personal autonomy. Specifically, it reduces the risk of poor psychological health and enhances frustration tolerance, problem identification, knowledge of available resources and digital skills. Participants also report a higher perceived likelihood of finding a job and use a broader range of job search methods.