Earnings Effects of Training Programs

IZA Discussion Paper No. 2926

University of St. Gallen, Department of Economics, Discussion Paper No. 2007-28

52 Pages Posted: 18 Jul 2007

See all articles by Michael Lechner

Michael Lechner

University of St. Gallen - Swiss Institute for Empirical Economic Research

Blaise Melly

Brown University - Department of Economics

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Date Written: July 2007

Abstract

In an evaluation of a job-training program, the influence of the program on the individual earnings capacity is important, because it reflects the program effect on human capital. Estimating these effects is complicated because earnings are observed for employed individuals only, and employment is itself an outcome of the program. Point identification of these effects can only be achieved by usually implausible assumptions. Therefore, weaker and more credible assumptions are suggested that bound various average and quantile effects. For these bounds, consistent, nonparametric estimators are proposed. In a reevaluation of Germany's training programs of 1993 and 1994, we find that the programs considerably improve the long-run earnings capacity of its participants.

Keywords: bounds, treatment effects, causal effects, program evaluation

JEL Classification: C21, C31, J30, J68

Suggested Citation

Lechner, Michael and Melly, Blaise, Earnings Effects of Training Programs (July 2007). IZA Discussion Paper No. 2926, University of St. Gallen, Department of Economics, Discussion Paper No. 2007-28, Available at SSRN: https://ssrn.com/abstract=1001415

Michael Lechner (Contact Author)

University of St. Gallen - Swiss Institute for Empirical Economic Research ( email )

Varnbuelstrasse 14
St. Gallen, 9000
Switzerland
+41 71 224 2320 (Phone)

Blaise Melly

Brown University - Department of Economics ( email )

64 Waterman Street
Providence, RI 02912
United States

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