TY - JOUR

T1 - The effects of vocational training programmes on the duration of unemployment in Eastern Germany

AU - Hujer, Reinhard

AU - Thomsen, Stephan L.

AU - Zeiss, Christopher

N1 - Funding information: Unemployment in Eastern Germany is a serious problem. Its burden for the economy is not only a reduced output and consequently a decreased welfare, but also a decay of human capital. Therefore, an efficient labour market policy has to aim at a continuous adjustment of labour supply to the requirements of labour demand. Furthermore, it has to avoid an exhaustion of human capital by the provision of jobs or programmes that improve the individual qualification. The most important aim of active labour market policies (ALMP) is to improve the re-employment chances of unemployed persons. In general, ALMP consist of public employment services, labour market training and subsidised employment. ALMP have become more important over the last two decades which is reflected by their ranking in the EU Employment Guidelines, OECD Jobs Strategy, and the national labour market laws. However, there is no clear evidence on a general effectiveness in the literature. While ALMP were seen as a panacea for the labour market in the early 1990s (as the political emphasis reflects), recent studies disagree. 2 Received: 12.10.04 / Revised: 11.08.05 * The authors thank Heinz Galler and an anonymous referee for valuable comments. The paper has also benefited from fruitful discussion at the annual meeting of the German Statistical Society in 2004, Frankfurt, and in IZA seminar, Bonn. All remaining errors are on our own. Financial support of the IAB, Nuremberg, is gratefully acknowledged. 1 Bundesagentur fiir Arbeit, FEA 2 For example, the experiences of Calmfors et al. (2001) for Sweden show rather discouraging results from the efforts of the implementation of ALMP on a large scale. See also Hagen and Steiner (2000) and Wunsch (2005) for a review on German active labour market policies and Martin and Grubb (2001) for different OECD countries.

PY - 2006/6

Y1 - 2006/6

N2 - Vocational training programmes have been the most important active labour market policy instrument in Germany in the last years. However, the still unsatisfying situation of the labour market has raised doubt on the efficiency of these programmes. In this paper, we analyse the effects of the participation in vocational training programmes on the duration of unemployment in Eastern Germany. Based on administrative data for the time between the October 1999 and December 2002 of the Federal Employment Administration 1, we apply a bivariate mixed proportional hazards model. By doing so, we are able to use the information of the timing of treatment as well as observable and unobservable influences to identify the treatment effects. The results show that a participation in vocational training prolongates the unemployment duration in Eastern Germany. Furthermore, the results suggest that locking-in effects are a serious problem of vocational training programmes.

AB - Vocational training programmes have been the most important active labour market policy instrument in Germany in the last years. However, the still unsatisfying situation of the labour market has raised doubt on the efficiency of these programmes. In this paper, we analyse the effects of the participation in vocational training programmes on the duration of unemployment in Eastern Germany. Based on administrative data for the time between the October 1999 and December 2002 of the Federal Employment Administration 1, we apply a bivariate mixed proportional hazards model. By doing so, we are able to use the information of the timing of treatment as well as observable and unobservable influences to identify the treatment effects. The results show that a participation in vocational training prolongates the unemployment duration in Eastern Germany. Furthermore, the results suggest that locking-in effects are a serious problem of vocational training programmes.

KW - Duration analysis

KW - I28

KW - J24

KW - J68

KW - JEL J64

KW - Programme evaluation

KW - Treatment effect

KW - Vocational training

UR - http://www.scopus.com/inward/record.url?scp=33750151170&partnerID=8YFLogxK

U2 - 10.1007/s10182-006-0235-z

DO - 10.1007/s10182-006-0235-z

M3 - Review article

AN - SCOPUS:33750151170

VL - 90

SP - 299

EP - 321

JO - Allgemeines Statistisches Archiv

JF - Allgemeines Statistisches Archiv

SN - 0002-6018

IS - 2

ER -