Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/bla/germec/v8y2007i4p468-509.html
   My bibliography  Save this article

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

Author

Listed:
  • 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 address potential selection bias, to study different types of programmes and to observe labour market outcomes over eight years. We find strong evidence that, on average, the training programmes under investigation increase long‐term employment prospects and earnings. However, as an important exception, the longer training programmes are 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, 2007. "The Curse and Blessing of Training the Unemployed in a Changing Economy: The Case of East Germany After Unification," German Economic Review, Verein für Socialpolitik, vol. 8(4), pages 468-509, November.
    • Handle: RePEc:bla:germec:v:8:y:2007:i:4:p:468-509
    DOI: 10.1111/j.1468-0475.2007.00415.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1468-0475.2007.00415.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1468-0475.2007.00415.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Michael Lechner, 2002. "Program Heterogeneity And Propensity Score Matching: An Application To The Evaluation Of Active Labor Market Policies," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 205-220, May.
    2. Michael Lechner & Ruth Miquel & Conny Wunsch, 2011. "Long‐Run Effects Of Public Sector Sponsored Training In West Germany," Journal of the European Economic Association, European Economic Association, vol. 9(4), pages 742-784, August.
    3. Patrick Puhani & Viktor Steiner, 1997. "The Effectiveness and Efficiency of Active Labour Market Policies in Poland," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 24(3), pages 209-231, October.
    4. Kluve, Jochen & Lehmann, Hartmut & Schmidt, Christoph M., 2008. "Disentangling Treatment Effects of Active Labor Market Policies: The Role of Labor Force Status Sequences," Labour Economics, Elsevier, vol. 15(6), pages 1270-1295, December.
    5. Winter-Ebmer, Rudolf, 2001. "Evaluating an Innovative Redundancy-Retraining Project: The Austrian Steel Foundation," IZA Discussion Papers 277, Institute of Labor Economics (IZA).
    6. Geweke, John & Keane, Michael P & Runkle, David, 1994. "Alternative Computational Approaches to Inference in the Multinomial Probit Model," The Review of Economics and Statistics, MIT Press, vol. 76(4), pages 609-632, November.
    7. Michael Lechner, 2000. "An Evaluation of Public-Sector-Sponsored Continuous Vocational Training Programs in East Germany," Journal of Human Resources, University of Wisconsin Press, vol. 35(2), pages 347-375.
    8. George A. Akerlof & Andrew K. Rose & Janet L. Yellen & Helga Hessenius, 1991. "East Germany in from the Cold: The Economic Aftermath of Currency Union," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 1-106.
    9. Lechner, Michael, 1999. "Identification and Estimation of Causal Effects of Multiple Treatments Under the Conditional Independence Assumption," IZA Discussion Papers 91, Institute of Labor Economics (IZA).
    10. Ashenfelter, Orley C, 1978. "Estimating the Effect of Training Programs on Earnings," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 47-57, February.
    11. Annette Bergemann & Bernd Fitzenberger & Stefan Speckesser, 2009. "Evaluating the dynamic employment effects of training programs in East Germany using conditional difference-in-differences," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(5), pages 797-823.
    12. Fougère, Denis & Crépon, Bruno & Brodaty, Thomas, 2000. "Using Matching Estimators to Evaluate Alternative Youth Employment Programs: Evidence from France, 1986-1988," CEPR Discussion Papers 2604, C.E.P.R. Discussion Papers.
    13. van Ours, Jan C., 2004. "The locking-in effect of subsidized jobs," Journal of Comparative Economics, Elsevier, vol. 32(1), pages 37-55, March.
    14. Michael Gerfin & Michael Lechner, 2002. "A Microeconometric Evaluation of the Active Labour Market Policy in Switzerland," Economic Journal, Royal Economic Society, vol. 112(482), pages 854-893, October.
    15. Lubyova, Martina & van Ours, Jan C., 1999. "Effects of Active Labor Market Programs on the Transition Rate from Unemployment into Regular Jobs in the Slovak Republic," Journal of Comparative Economics, Elsevier, vol. 27(1), pages 90-112, March.
    16. Jacobson, Louis & LaLonde, Robert & G. Sullivan, Daniel, 2005. "Estimating the returns to community college schooling for displaced workers," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 271-304.
    17. Reinhard Hujer & Stephan Thomsen & Christopher Zeiss, 2006. "The effects of vocational training programmes on the duration of unemployment in Eastern Germany," AStA Advances in Statistical Analysis, Springer;German Statistical Society, vol. 90(2), pages 299-321, June.
    18. Bernd Fitzenberger & Stefan Speckesser, 2007. "Employment effects of the provision of specific professional skills and techniques in Germany," Empirical Economics, Springer, vol. 32(2), pages 529-573, May.
    19. Dorsett, Richard, 2006. "The new deal for young people: effect on the labour market status of young men," Labour Economics, Elsevier, vol. 13(3), pages 405-422, June.
    20. Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity Score-Matching Methods For Nonexperimental Causal Studies," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 151-161, February.
    21. Borsch-Supan, Axel & Hajivassiliou, Vassilis A., 1993. "Smooth unbiased multivariate probability simulators for maximum likelihood estimation of limited dependent variable models," Journal of Econometrics, Elsevier, vol. 58(3), pages 347-368, August.
    22. Kluve, Jochen & Lehmann, Hartmut & Schmidt, Christoph M., 1999. "Active Labor Market Policies in Poland: Human Capital Enhancement, Stigmatization, or Benefit Churning?," Journal of Comparative Economics, Elsevier, vol. 27(1), pages 61-89, March.
    23. Fredriksson, Peter & Johansson, Per, 2002. "Program evaluation and random program starts," Working Paper Series 2003:1, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    24. V. Joseph Hotz & Guido W. Imbens & Jacob A. Klerman, 2000. "The Long-Term Gains from GAIN: A Re-Analysis of the Impacts of the California GAIN Program," NBER Working Papers 8007, National Bureau of Economic Research, Inc.
    25. James J. Heckman & Jeffrey A. Smith, 2004. "The Determinants of Participation in a Social Program: Evidence from a Prototypical Job Training Program," Journal of Labor Economics, University of Chicago Press, vol. 22(2), pages 243-298, April.
    26. Michael Lechner & Ruth Miquel, 2010. "Identification of the effects of dynamic treatments by sequential conditional independence assumptions," Empirical Economics, Springer, vol. 39(1), pages 111-137, August.
    27. Christopher J. O'Leary & Piotr Kolodziejczyk & Gyorgy Lazar, "undated". "The Net Impact of Active Labour Market Programmes in Hungary and Poland," Upjohn Working Papers cjo19983, W.E. Upjohn Institute for Employment Research.
    28. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097, Elsevier.
    29. Michael Lechner, 2000. "Programme Heterogeneity and Propensity Score Matching: An Application to the Evaluation of Active Labour Market Policies," Econometric Society World Congress 2000 Contributed Papers 0647, Econometric Society.
    30. Michael Lechner, 2002. "Some practical issues in the evaluation of heterogeneous labour market programmes by matching methods," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 165(1), pages 59-82, February.
    31. van Ours, J.C. & Lubyova, M., 1999. "Effects of active labour market programmes on the transition rate from unemployment into regular jobs in the Slovak Republic," Other publications TiSEM 742d0ca3-611a-4b55-a8c4-8, Tilburg University, School of Economics and Management.
    32. Guido W. Imbens, 2004. "Nonparametric Estimation of Average Treatment Effects Under Exogeneity: A Review," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 4-29, February.
    33. Puhani, Patrick A., 1996. "Poland on the dole: unemployment benefits, training, and long-term unemployment during transition," ZEW Discussion Papers 96-30, ZEW - Leibniz Centre for European Economic Research.
    34. Kraus, Florian & Puhani, Patrick A. & Steiner, Viktor, 1997. "Employment Effects of Publicly Financed Training Programs The East German Experience," ZEW Discussion Papers 97-33, ZEW - Leibniz Centre for European Economic Research.
    35. Martin, John P. & Grubb, David, 2001. "What works and for whom: a review of OECD countries' experiences with active labour market policies," Working Paper Series 2001:14, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    36. Guido W. Imbens, 1999. "The Role of the Propensity Score in Estimating Dose-Response Functions," NBER Technical Working Papers 0237, National Bureau of Economic Research, Inc.
    37. Michael Lechner, 2004. "Sequential Matching Estimation of Dynamic Causal Models," University of St. Gallen Department of Economics working paper series 2004 2004-06, Department of Economics, University of St. Gallen.
    38. Michael Lechner, 1999. "Nonparametric bounds on employment and income effects of continuous vocational training in East Germany," Econometrics Journal, Royal Economic Society, vol. 2(1), pages 1-28.
    39. Lechner, Michael, 1999. "Earnings and Employment Effects of Continuous Off-the-Job Training in East Germany after Unification," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(1), pages 74-90, January.
    40. Kraus Florian & Puhani Patrick & Steiner Viktor, 1999. "Employment Effects of Publicly Financed Training Programs – The East German Experience / Beschäftigungseffekte von Fortbildungs- und Umschulungsmaßnahmen in Ostdeutschland," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 219(1-2), pages 216-248, February.
    41. Puhani, Patrick A. & Steiner, Viktor, 1996. "Public works for Poland? Active labour market policies during transition," ZEW Discussion Papers 96-01, ZEW - Leibniz Centre for European Economic Research.
    42. Couch, Kenneth A, 1992. "New Evidence on the Long-Term Effects of Employment Training Programs," Journal of Labor Economics, University of Chicago Press, vol. 10(4), pages 380-388, October.
    43. Daniel Friedlander & David H. Greenberg & Philip K. Robins, 1997. "Evaluating Government Training Programs for the Economically Disadvantaged," Journal of Economic Literature, American Economic Association, vol. 35(4), pages 1809-1855, December.
    44. Fitzenberger, Bernd & Prey, Hedwig, 2000. "Evaluating Public Sector Sponsored Training in East Germany," Oxford Economic Papers, Oxford University Press, vol. 52(3), pages 497-520, July.
    45. James J. Heckman & Jeffrey A. Smith, 1999. "The Pre-Program Earnings Dip and the Determinants of Participation in a Social Program: Implications for Simple Program Evaluation Strategies," NBER Working Papers 6983, National Bureau of Economic Research, Inc.
    46. repec:lic:licosd:8099 is not listed on IDEAS
    47. Jespersen, Svend T. & Munch, Jakob R. & Skipper, Lars, 2008. "Costs and benefits of Danish active labour market programmes," Labour Economics, Elsevier, vol. 15(5), pages 859-884, October.
    48. Heckman, James J & Smith, Jeffrey A, 1999. "The Pre-programme Earnings Dip and the Determinants of Participation in a Social Programme. Implications for Simple Programme Evaluation Strategies," Economic Journal, Royal Economic Society, vol. 109(457), pages 313-348, July.
    49. Conny Wunsch, 2005. "Labour Market Policy in Germany: Institutions, Instruments and Reforms since Unification," University of St. Gallen Department of Economics working paper series 2005 2005-06, Department of Economics, University of St. Gallen.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:bla:germec:v:8:y:2007:i::p:468-509 is not listed on IDEAS
    2. Michael Lechner & Ruth Miquel & Conny Wunsch, 2011. "Long‐Run Effects Of Public Sector Sponsored Training In West Germany," Journal of the European Economic Association, European Economic Association, vol. 9(4), pages 742-784, August.
    3. Lechner, Michael & Wunsch, Conny, 2006. "Active Labour Market Policy in East Germany: Waiting for the Economy to Take Off," CEPR Discussion Papers 5924, C.E.P.R. Discussion Papers.
    4. Michael Lechner & Conny Wunsch, 2009. "Are Training Programs More Effective When Unemployment Is High?," Journal of Labor Economics, University of Chicago Press, vol. 27(4), pages 653-692, October.
    5. Conny Wunsch & Michael Lechner, 2008. "What Did All the Money Do? On the General Ineffectiveness of Recent West German Labour Market Programmes," Kyklos, Wiley Blackwell, vol. 61(1), pages 134-174, February.
    6. Michael Lechner & Ruth Miquel, 2010. "Identification of the effects of dynamic treatments by sequential conditional independence assumptions," Empirical Economics, Springer, vol. 39(1), pages 111-137, August.
    7. Kluve, Jochen & Lehmann, Hartmut & Schmidt, Christoph M., 2008. "Disentangling Treatment Effects of Active Labor Market Policies: The Role of Labor Force Status Sequences," Labour Economics, Elsevier, vol. 15(6), pages 1270-1295, December.
    8. Fitzenberger, Bernd & Volter, Robert, 2007. "Long-run effects of training programs for the unemployed in East Germany," Labour Economics, Elsevier, vol. 14(4), pages 730-755, August.
    9. Stefanie Behncke & Markus Frölich & Michael Lechner, 2010. "Unemployed and their caseworkers: should they be friends or foes?," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 173(1), pages 67-92, January.
    10. Marco Caliendo & Sabine Kopeinig, 2008. "Some Practical Guidance For The Implementation Of Propensity Score Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 31-72, February.
    11. Bernd Fitzenberger & Stefan Speckesser, 2007. "Employment effects of the provision of specific professional skills and techniques in Germany," Empirical Economics, Springer, vol. 32(2), pages 529-573, May.
    12. Annette Bergemann & Bernd Fitzenberger & Stefan Speckesser, 2009. "Evaluating the dynamic employment effects of training programs in East Germany using conditional difference-in-differences," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(5), pages 797-823.
    13. Lechner, Michael & Wunsch, Conny, 2013. "Sensitivity of matching-based program evaluations to the availability of control variables," Labour Economics, Elsevier, vol. 21(C), pages 111-121.
    14. Michael Lechner & Conny Wunsch, 2009. "Active labour market policy in East Germany," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 17(4), pages 661-702, October.
    15. Michael Lechner & Stephan Wiehler, 2011. "Kids or courses? Gender differences in the effects of active labor market policies," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(3), pages 783-812, July.
    16. Kluve, Jochen & Fertig, Michael & Jacobi, Lena & Nima, Leonhard & Schaffner, Sandra & Schmidt, Christoph M. & Card, David & Góra, Marek & Jensen, Peter & Leetmaa, Reelika & Patacchini, Eleonora & van , 2005. "Study on the effectiveness of ALMPs: Research project for the European Commission, DG Employment, Social Affairs and Equal Opportunities. Final report," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 69929, March.
    17. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    18. Lechner, Michael & Smith, Jeffrey, 2007. "What is the value added by caseworkers?," Labour Economics, Elsevier, vol. 14(2), pages 135-151, April.
    19. Martin Biewen & Bernd Fitzenberger & Aderonke Osikominu & Marie Paul, 2014. "The Effectiveness of Public-Sponsored Training Revisited: The Importance of Data and Methodological Choices," Journal of Labor Economics, University of Chicago Press, vol. 32(4), pages 837-897.
    20. Biewen, Martin & Fitzenberger, Bernd & Osikominu, Aderonke & Waller, Marie, 2007. "Which Program for Whom? Evidence on the Comparative Effectiveness of Public Sponsored Training Programs in Germany," ZEW Discussion Papers 07-042, ZEW - Leibniz Centre for European Economic Research.
    21. Geoff Perry & Tim Maloney, 2008. "Economic Evaluation of the Training Opportunities Programme in New Zealand," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 11(2), pages 163-185.

    More about this item

    JEL classification:

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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:germec:v:8:y:2007:i:4:p:468-509. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/vfsocea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.