Swedish Labour Market Training and the Duration of Unemployment

48 Pages Posted: 28 Dec 2006

See all articles by Katarina Richardson

Katarina Richardson

IFAU - Office of Labour Market Policy Evaluation

Gerard J. van den Berg

VU University Amsterdam - Department of Economics; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; Tinbergen Institute

Date Written: October 2006

Abstract

The vocational employment training program is the most ambitious and expensive training program in Sweden and a cornerstone of labor market policy. We analyze its causal effects on the individual transition rate from unemployment to employment by exploiting variation in the timing of treatment and outcome, dealing with selectivity on unobservables. We demonstrate the appropriateness of this approach in our context by studying the process leading to enrollment. We also develop a model allowing for duration dependence and unobserved heterogeneity (leading to spurious duration dependence) in the treatment effect itself, and we prove non-parametric identification. The data cover the population and include multiple unemployment spells for many individuals. The results indicate a large significantly positive effect on exit to work shortly after exiting the program. The effect at the individual level diminishes after some weeks. When taking account of the time spent in the program, the effect on the mean unemployment duration is often close to zero.

Keywords: Vocational training, program evaluation, duration analysis, selectivity bias, treatment effect, duration dependence, identification, hazard rate, transition to work

JEL Classification: C14, C41, J64

Suggested Citation

Richardson, Katarina and van den Berg, Gerard J., Swedish Labour Market Training and the Duration of Unemployment (October 2006). CEPR Discussion Paper No. 5895. Available at SSRN: https://ssrn.com/abstract=953997

Katarina Richardson

IFAU - Office of Labour Market Policy Evaluation ( email )

Box 513
751 20 Uppsala
Sweden
+46 18 471 70 74 (Phone)

Gerard J. Van den Berg (Contact Author)

VU University Amsterdam - Department of Economics ( email )

De Boelelaan 1105
1081 HV Amsterdam
Netherlands
+31 20 444 6132 (Phone)
+32 20 444 6020 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

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

Tinbergen Institute

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

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