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Evaluating An Innovative Redundancy-Retraining Project: The Austrian Steel Foundation

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  • Winter-Ebmer, Rudolf
Abstract
This Paper evaluates an Austrian manpower training programme, which is highly innovative in its content and financing - and could therefore serve as a role model for other programmes. In the late 1980s privatization and downsizing of nationalized steel firms have led to large-scale redundancies. A special Steel Foundation was created as part of a social plan. This Foundation acted like an independent training centre, where displaced workers would spend relatively long training periods (sometimes several years), obtaining personality and orientation training, as well as formal education. The last step of the integrative program was placement assistance as well as assistance for creating one?s own business. The Foundation was financed by (higher) contributions from unemployment insurance funds, by the previous firms themselves, as well as by a collectively-bargained special tax on the remaining workers in the Steel Firms. Moreover the trainees themselves would have to support the Foundation by depositing their redundancy payments. In evaluating post-foundation economic performance I use days worked and wage growth. As a control group I take all other displaced workers from the firms who formed the Foundation, using Instrumental Variables to solve the selection problem. The results show considerable wage gains - even for a period of five years after leaving the Foundation - as well as improved employment prospects. Finally, a cost-benefit analysis is performed to assess the long-term success of the Foundation.

Suggested Citation

  • Winter-Ebmer, Rudolf, 2001. "Evaluating An Innovative Redundancy-Retraining Project: The Austrian Steel Foundation," CEPR Discussion Papers 2776, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:2776
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    Cited by:

    1. Baird, Matthew D. & Engberg, John & Gutierrez, Italo A., 2022. "RCT evidence on differential impact of US job training programmes by pre-training employment status," Labour Economics, Elsevier, vol. 75(C).
    2. Lechner Michael & Miquel Ruth & Wunsch Conny, 2007. "The Curse and Blessing of Training the Unemployed in a Changing Economy: The Case of East Germany After Unification," German Economic Review, De Gruyter, vol. 8(4), pages 468-509, December.
    3. Bernard Gazier, 2007. "“Making transitions pay” : The “Transitional labour markets” approach to “Flexicurity"," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00186363, HAL.
    4. 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.
    5. Tauchmann, Harald & Göhlmann, Silja & Requate, Till & Schmidt, Christoph M., 2007. "Tobacco and Alcohol: Complements or Substitutes? – A Structural Model Approach," Ruhr Economic Papers 34, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    6. Johannes Schweighofer, 2013. "Erzielen die Programme der aktiven Arbeitsmarktpolitik in Österreich ihre beabsichtigten Wirkungen?," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 120, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    7. 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.
    8. 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.
    9. Viktor Steiner & Tobias Hagen, 2002. "Was kann die Aktive Arbeitsmarktpolitik in Deutschland aus der Evaluationsforschung in anderen europäischen Ländern lernen?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 3(2), pages 189-206, May.
    10. Eichhorst, Werner, 2007. "Wachstumsaspekte der Arbeitsmarktpolitik - Von den Nachbarn lernen," IZA Research Reports 13, Institute of Labor Economics (IZA).
    11. 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.
    12. Jochen Kluve, 2006. "The Effectiveness of European Active Labor Market Policy," RWI Discussion Papers 0037, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.
    13. Kluve, Jochen, 2010. "The effectiveness of European active labor market programs," Labour Economics, Elsevier, vol. 17(6), pages 904-918, December.
    14. Andreas Kuhn & Jean-Philippe Wuellrich & Josef Zweim�ller, 2010. "Fatal attraction? Access to early retirement and mortality," IEW - Working Papers 499, Institute for Empirical Research in Economics - University of Zurich.
    15. Kluve, Jochen, 2006. "The Effectiveness of European Active Labor Market Policy," RWI Discussion Papers 37, RWI - Leibniz-Institut für Wirtschaftsforschung.
    16. Stavros Rodokanakis, 2010. "Unemployment Risk in Southern Greece," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 13(35), pages 55-82, (1).
    17. Kluve, Jochen, 2006. "The Effectiveness of European Active Labor Market Policy," IZA Discussion Papers 2018, Institute of Labor Economics (IZA).
    18. Sarah Bernhard & Thomas Kruppe, 2012. "Effectiveness of Further Vocational Training in Germany – Empirical Findings for Persons Receiving Means-tested Unemployment Benefits," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 132(4), pages 501-526.
    19. repec:zbw:rwidps:0037 is not listed on IDEAS
    20. Konle-Seidl, Regina, 2005. "Lessons learned: Internationale Evaluierungsergebnisse zu Wirkungen aktiver und aktivierender Arbeitsmarktpolitik," IAB-Forschungsbericht 200509, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    21. Hedwig Lutz & Helmut Mahringer, 2007. "Wirkt die Arbeitsmarktförderung in Österreich? Überblick über Ergebnisse einer Evaluierung der Instrumente der Arbeitsmarktförderung in Österreich," WIFO Monatsberichte (monthly reports), WIFO, vol. 80(3), pages 199-218, March.
    22. repec:bla:germec:v:8:y:2007:i::p:468-509 is not listed on IDEAS
    23. Maurizio Bussolo & Maria E. Davalos & Vito Peragine & Ramya Sundaram, 2018. "Toward a New Social Contract," World Bank Publications - Books, The World Bank Group, number 30393.

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    More about this item

    Keywords

    Labour market programmes; Evaluation; Cost-benefit analysis; Instrumental variables;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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