DP4851 Long run Effects of Public Sector Sponsored Training in West Germany

Author(s):	Michael Lechner, Ruth Miquel, Conny Wunsch
Publication Date:	January 2005
Keyword(s):	active labour market policy, matching estimation, panel data, programme evaluation
JEL(s):	J68
Programme Areas:	Labour Economics
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=4851

Between 1991 and 1997 West Germany spent on average about 3.6bn euro per year on public sector sponsored training programmes for the unemployed. We base our empirical analysis on a new administrative database that plausibly allows for selectivity correction by microeconometric matching methods. We identify the effects of different types of training programmes over a horizon of more than seven years. Using bias corrected weighted multiple neighbours matching we find that all programmes have negative effects in the short run and positive effects over a horizon of about four years. For substantive training programmes with duration of about two years gains in employment probabilities of more than 10% points appear to be sustainable, but come at the price of large negative lock-in effects.