The Effect of Vocational Employment Training on the Individual Transition Rate from Unemployment to Work

Amongst the active labor market policy programs for the unemployed in Sweden, the vocational employment training program is the most ambitious and expensive. We analyze its effect on the individual transition rate from unemployment to employment using a unique set of administrative data and a novel empirical approach that exploits variation in the timing of training and exit to work. The approach involves the estimation of duration models, and it allows us to quantify the individual effect of training in the presence of selectivity on unobservables. The data contain the full population of unemployed in the period 1993-2000 and include multiple unemployment spells for many individuals. The results indicate a significantly positive effect on exit to work after exiting the program. Its magnitude is very large shortly after leaving the course but diminishes afterwards. If we also take account of the time spent in the program then the net effect of participation in the program on the mean unemployment duration is close to zero.

[1]  R. M. Gritz,et al.  The impact of training on the frequency and duration of employment , 1993 .

[2]  Geert Ridder,et al.  The Non-Parametric Identification of Generalized Accelerated Failure-Time Models , 1990 .

[3]  Kurt Brännäs,et al.  Estimation in a Duration Model for Evaluating Educational Programs , 2000 .

[4]  B. Holmlund,et al.  Unemployment, Vacancies And Labour Market Programmes: Swedish Evidence , 1990 .

[5]  Laura Larsson.  Evaluation of Swedish Youth Labor Market Programs , 2003, The Journal of Human Resources.

[6]  Jan C. van Ours,et al.  Do stepping-stone jobs exist? Early career paths in the medical profession , 2002 .

[7]  M. Dahlberg,et al.  Direct displacement effects of labour market programmes : the case of Sweden , 1999 .

[8]  Jan C. van Ours,et al.  The Effect of Unemployment Insurance Sanctions on the Transition Rate from Unemployment to Employment , 1996 .

[9]  Håkan Regnér.  A nonexperimental evaluation of training programs for the unemployed in Sweden , 2002 .

[10]  Robert G. Fay.  Enhancing the Effectiveness of Active Labour Market Policies: Evidence from Programme Evaluations in OECD Countries , 1996 .

[11]  K. Carling,et al.  The relative efficiency of labour market pro-grammes: Swedish experience from the 1990s , 2004 .

[12]  B. Holmlund,et al.  Unemployment duration, unemployment benefits, and labor market programs in Sweden , 1996 .

[13]  Robert J. LaLonde,et al.  The Impact of Being Offered and Receiving Classroom Training on the Employment Histories of Disadvantaged Women: Evidence from Experimental Data , 1997 .

[14]  Gerard J. van den Berg,et al.  Duration models: specification, identification and multiple durations , 2000 .

[15]  Gerard J. van den Berg,et al.  The Effect of Unemployment Insurance Sanctions on the Transition Rate from Unemployment to Employment , 1998 .

[16]  Tony Lancaster,et al.  The Econometric Analysis of Transition Data. , 1992 .

[17]  Gerard J. van den Berg,et al.  The nonparametric identification of treatment effects in duration models , 2003 .

[18]  Denis Fougère,et al.  Evaluating the Impact of French Employment Policies on Individual Labour Market Histories , 1997 .

[19]  Håkan Regnér.  Training at the job and training for a new job : two Swedish studies , 1997 .

[20]  B. Holmlund,et al.  Do Benefit Cuts Boost Job Findings? Swedish Evidence from the 1990s , 2000, SSRN Electronic Journal.