Working Paper: CEPR ID: DP5171
Authors: Michael Lechner; Ruth Miquel; Conny Wunsch
Abstract: We analyse 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 programmes, and to observe interesting labour market outcomes over eight years. We find that, generally, all training programmes under investigation increase long-term employment prospects and earnings. However, as an important exception, the longer training programmes 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 labour market policy; causal effects; gender differences; matching estimation; nonparametric identification; panel data; programme evaluation
JEL Codes: J68
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| negative effect for male participants (J16) | misjudgments by caseworkers regarding future skill demands (J68) |
| male participants trained in construction-related occupations (J24) | decline in demand shortly after training completion (J24) |
| Government-sponsored training programs (M53) | long-term employment prospects (J68) |
| Government-sponsored training programs (M53) | long-term earnings (J31) |
| longer training programs (M53) | negative effect for male participants (J16) |
| gender differences in training effectiveness (M53) | positive effects for women (J16) |
| gender differences in training effectiveness (M53) | negative or negligible effects for men (J16) |
| measuring long-run effects of training programs (J24) | significant long-term benefits (J32) |
| shorter follow-up periods (C41) | inconclusive results (Y40) |
| training programs (M53) | negative short-term lock-in effects (G41) |