The Curse and Blessing of Training the Unemployed in a Changing Economy: The Case of East Germany after Unification

52 Pages Posted: 25 Aug 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: August 2005

Abstract

We analyze the effects of government sponsored training for the unemployed conducted during East German transition. For the microeconometric analysis, we use a new, large and informative administrative database that allows us to use matching methods to reduce potential selection bias, to study different types of programs, and to observe interesting labor market outcomes over eight years. We find that, generally, all training programs under investigation increase long-term employment prospects and earnings. However, as an important exception, the longer training programs are on average not helpful for their male participants. At least part of the explanation for this negative result is that caseworkers severely misjudged the structure of the future demand for skills.

Keywords: Active labor market policy, nonparametric identification, matching estimation, causal effects, program evaluation, panel data, gender differences

JEL Classification: J68

Suggested Citation

Lechner, Michael and Miquel, Ruth and Wunsch, Conny, The Curse and Blessing of Training the Unemployed in a Changing Economy: The Case of East Germany after Unification (August 2005). CEPR Discussion Paper No. 5171, Available at SSRN: https://ssrn.com/abstract=790626

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)

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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