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

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  • 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 8 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.

Suggested Citation

  • Michael Lechner & Ruth Miquel & Conny Wunsch, 2005. "The Curse and Blessing of Training the Unemployed in a Changing Economy: The Case of East Germany after Unification," University of St. Gallen Department of Economics working paper series 2005 2005-15, Department of Economics, University of St. Gallen.
    • Handle: RePEc:usg:dp2005:2005-15
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    as
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    JEL classification:

    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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