End-of-Year Spending and the Long-Run Employment Effects of Training Programs for the Unemployed

62 Pages Posted: 10 Jan 2017

See all articles by Bernd Fitzenberger

Bernd Fitzenberger

Humboldt University of Berlin - School of Business and Economics

Marina Dimitrova Furdas

University of Freiburg

Christoph Sajons

University of Freiburg

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Abstract

This study re-estimates the employment effects of training programs for the unemployed using exogenous variation in participation caused by budget rules in Germany in the 1980s and early 1990s, resulting in the infamous "end-of-year spending". In addition to estimating complier effects with 2SLS, we implement a flexible control-function approach to obtain the average treatment effect on the treated (ATT). Our findings are: Participants who are only selected for budgetary reasons do not benefit from training programs. However, the ATT estimates suggest modest positive effects in the long run. Longer programs are more effective than shorter and more practice-oriented programs.

Keywords: training for the unemployed, budgetary conditions, administrative data, Germany

JEL Classification: J64, J68, H43

Suggested Citation

Fitzenberger, Bernd and Furdas, Marina Dimitrova and Sajons, Christoph, End-of-Year Spending and the Long-Run Employment Effects of Training Programs for the Unemployed. IZA Discussion Paper No. 10441, Available at SSRN: https://ssrn.com/abstract=2895289

Bernd Fitzenberger (Contact Author)

Humboldt University of Berlin - School of Business and Economics ( email )

Spandauer Str. 1
Berlin, D-10099
Germany

Marina Dimitrova Furdas

University of Freiburg ( email )

Fahnenbergplatz
Freiburg, D-79085
Germany

Christoph Sajons

University of Freiburg ( email )

Fahnenbergplatz
Freiburg, D-79085
Germany

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