Long-Run Effects of Public Sector Sponsored Training in West Germany

53 Pages Posted: 11 May 2005

See all articles by Michael Lechner

Michael Lechner

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

Ruth Miquel

University of St. Gallen - Swiss Institute for International Economics and Applied Economic Research

Conny Wunsch

University of Basel; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute); University of St. Gallen

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Date Written: January 2005

Abstract

Between 1991 and 1997, West Germany spent on average about 3.6bn euro per year on public sector sponsored training programs for the unemployed. We base our empirical analysis on a new administrative database that plausibly allows for selectivity correction by microeconometric matching methods. We identify the effects of different types of training programs over a horizon of more than seven years. Using bias corrected weighted multiple neighbors matching, we find that all programs have negative effects in the short-run and positive effects over a horizon of about four years. For substantive training programs with duration of about two years, gains in employment probabilities of more than 10% points appear to be sustainable, but come at the price of large negative lock-in effects.

Keywords: Active labor market policy, matching estimation, program evaluation, panel data

JEL Classification: J68

Suggested Citation

Lechner, Michael and Miquel, Ruth and Wunsch, Conny, Long-Run Effects of Public Sector Sponsored Training in West Germany (January 2005). Available at SSRN: https://ssrn.com/abstract=721584

Michael Lechner (Contact Author)

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

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

Ruth Miquel

University of St. Gallen - Swiss Institute for International Economics and Applied Economic Research ( email )

Dufourstr. 48
St. Gallen, 9000
Switzerland

Conny Wunsch

University of Basel ( email )

Petersplatz 1
Basel, CH-4003
Switzerland

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

University of St. Gallen ( email )

Dufourstrasse 50
St. Gallen, 9000
Switzerland

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