Employment effects of the provision of specific professional skills and techniques in Germany

Based on unique administrative data, which has only recently become available, this paper estimates the employment effects of the most important type of public sector sponsored training in Germany, namely the provision of specific professional skills and techniques (SPST). Using the inflows into unemployment for the year 1993, the empirical analysis uses local linear matching based on the estimated propensity score to estimate the average treatment effect on the treated of SPST programs by elapsed duration of unemployment. The empirical results show a negative lock-in effect for the period right after the beginning of the program and significantly positive treatment effects on employment rates of about 10 percentage points and above a year after the beginning of the program. The general pattern of the estimated treatment effects is quite similar for the three time intervals of elapsed unemployment considered. The positive effects tend to persist almost completely until the end of our evaluation period. The positive effects are stronger in West Germany compared to East Germany.

[1]  Gesine Stephan,et al.  Wage distributions by wage-setting regime , 2005 .

[2]  J. Heckman,et al.  The Economics and Econometrics of Active Labor Market Programs , 1999 .

[3]  Theo Gasser,et al.  Finite-Sample Variance of Local Polynomials: Analysis and Solutions , 1996 .

[4]  M. Lechner,et al.  A Potential Outcome Approach to Dynamic Programme Evaluation: Nonparametric Identification , 2001 .

[5]  P. Johansson,et al.  Program Evaluation and Random Program Starts , 2003, SSRN Electronic Journal.

[6]  Uwe Blien,et al.  Local Economic Structure and Industry Development in Germany, 1993-2001 , 2004 .

[7]  Bernd Fitzenberger,et al.  Weiterbildungsmaßnahmen in Ostdeutschland : Ein Misserfolg der Arbeitsmarktpolitik? , 2002 .

[8]  James J. Heckman,et al.  Characterizing Selection Bias Using Experimental Data , 1998 .

[9]  Qi Li.  Nonparametric econometrics , 2006 .

[10]  Bernd Fitzenberger,et al.  Evaluating Public Sector Sponsored Training in East Germany , 2000 .

[11]  R. Blundell,et al.  PAPERS IN ECONOMICS EVALUATING THE EMPLOYMENT EFFECTS OF A MANDATORY JOB SEARCH PROGRAM , 2003 .

[12]  Susanne Rässler,et al.  Editing and multiply imputing German establishment panel data to estimate stochastic production frontier models , 2004 .

[13]  A. Bergemann,et al.  Evaluating the Dynamic Employment Effects of Training Programs in East Germany Using Conditional Difference-in-Differences , 2005, SSRN Electronic Journal.

[14]  D. Rubin.  Estimating causal effects of treatments in randomized and nonrandomized studies. , 1974 .

[15]  Gesine Stephan,et al.  How collective contracts and works councils reduce the gender wage gap , 2004 .

[16]  A. Roy.  Some thoughts on the distribution of earnings , 1951 .

[17]  Susanne Rässler,et al.  Where have all the data gone? Stochastic production frontiers with multiply imputed German establishment data , 2005 .

[18]  Uwe Blien,et al.  Formula allocation The regional allocation of budgetary funds for measures of active labour market policy in Germany , 2003 .

[19]  S. Speckesser.  Essays on Evaluation of Active Labour Market Policy , 2004 .

[20]  M. Lechner.  Sequential Matching Estimation of Dynamic Causal Models , 2004, SSRN Electronic Journal.

[21]  Jeffrey A. Smith,et al.  The Pre-Program Earnings Dip and the Determinants of Participation in a Social Program: Implications for Simple Program Evaluation Strategies , 1999 .

[22]  Bund-Länder-Kommission für Bildungsplanung und Forschungsförderung..  BLK-Bildungsfinanzbericht 1998/99. Ausgaben der Gebietskörperschaften für Bildung, Wissenschaft, Forschung und Kultur in den Jahren 1998 (Soll und Ist) und 1999 (Soll) sowie Zeitreihen ab 1975 auf der Datenbasis der Haushaltsansatzstatistik und der Meldungen des Statistischen Bundesamtes. 2. Materia , 2000 .

[23]  Thomas Hinz,et al.  Lohnunterschiede zwischen Frauen und Männern in Branchen, Berufen und Betrieben , 2005 .

[24]  Conny Wunsch,et al.  Labour Market Policy in Germany: Institutions, Instruments and Reforms Since Unification , 2005 .

[25]  James J. Heckman,et al.  Alternative methods for evaluating the impact of interventions: An overview , 1985 .

[26]  Markus Froelich,et al.  Nonparametric Covariate Adjustment: Pair-Matching versus Local Polynomial Matching , 2002 .

[27]  Susanne Rässler,et al.  Analyzing the changing gender wage gap based on multiply imputed right censored wages , 2005 .

[28]  Michael Lechner,et al.  The Curse and Blessing of Training the Unemployed in a Changing Economy: The Case of East Germany After Unification , 2005, SSRN Electronic Journal.

[29]  M. Lechner.  Identification and Estimation of Causal Effects of Multiple Treatments Under the Conditional Independence Assumption , 1999, SSRN Electronic Journal.

[30]  P. Johansson,et al.  Dynamic Treatment Assignment , 2004 .

[31]  Bund-Länder-Kommission für Bildungsplanung und Forschungsförderung.  Erstausbildung und Weiterbildung. Bezüge zwischen beruflicher Erstausbildung und Weiterbildung. Bericht der BLK , 2000 .

[32]  Lutz Bellmann,et al.  Churning and institutions: Dutch and German establishments compared with micro-level data , 2005 .

[33]  Individual tenure and collective contracts , 2005 .

[34]  G. Imbens.  Nonparametric Estimation of Average Treatment Effects Under Exogeneity: A Review , 2004 .

[35]  G. Imbens,et al.  On the Failure of the Bootstrap for Matching Estimators , 2006 .

[36]  J. Heckman,et al.  The Pre‐programme Earnings Dip and the Determinants of Participation in a Social Programme. Implications for Simple Programme Evaluation Strategies , 1999 .

[37]  B. Sianesi.  An Evaluation of the Swedish System of Active Labor Market Programs in the 1990s , 2004, Review of Economics and Statistics.

[38]  J. Abbring,et al.  Social Experiments and Instrumental Variables with Duration Outcomes , 2005 .

[39]  Claus Schnabel,et al.  Collective Bargaining Structure and its Determinants: An Empirical Analysis with British and German Establishment Data , 2006 .

[40]  Stefan Bender,et al.  Dismissal Protection and Worker Flows in Small Establishments , 2004, SSRN Electronic Journal.

[41]  Gesine Stephan,et al.  Collective Contracts, Wages and Wage Dispersion in a Multi-Level Model , 2004 .

[42]  M. Lechner.  Earnings and Employment Effects of Continuous Gff-the-Job Training in East Germany After Unification , 1995 .

[43]  G. Imbens.  The Role of the Propensity Score in Estimating Dose-Response Functions , 1999 .

[44]  Costas Meghir,et al.  Evaluating the Employment Impact of a Mandatory Job Search Program: The New Deal for Young People in the UK , 2004 .

[45]  Petra E. Todd,et al.  Matching As An Econometric Evaluation Estimator , 1998 .

[46]  Stephan L. Thomsen,et al.  Individual employment effects of job creation schemes in Germany with respect to sectoral heterogeneity , 2005 .

[47]  J. Heckman,et al.  Longitudinal Analysis of Labor Market Data: Alternative methods for evaluating the impact of interventions , 1985 .

[48]  O. Linton,et al.  Asymptotic Expansions for Some Semiparametric Program Evaluation Estimators , 2001 .

[49]  Stefan Bender,et al.  The linked employer-employee dataset of the IAB (LIAB) , 2005 .

[50]  Michael Lechner,et al.  Long-Run Effects of Public Sector Sponsored Training in West Germany , 2004, SSRN Electronic Journal.

[51]  Thomas Rothe,et al.  Labour market dynamics from a regional perspective The multi-account system , 2005 .

[52]  A. Ullah,et al.  Nonparametric Econometrics: Semiparametric and Nonparametric Estimation of Simultaneous Equation Models , 1999 .

[53]  Claus Schnabel,et al.  Do Newly Founded Firms Pay Lower Wages? First Evidence from Germany , 2007 .

[54]  O. Ashenfelter,et al.  Estimating the Effect of Training Programs on Earnings , 1976 .

[55]  D. Rubin,et al.  The central role of the propensity score in observational studies for causal effects , 1983 .

[56]  E. Nagel,et al.  Beschäftigungssituation von Teilnehmern an AFG-finanzierter beruflicher Weiterbildung (The employment situation of participants in further vocational training financed under the Employment Promotion Act) , 2003 .

[57]  Claus Schnabel,et al.  How fast do newly founded firms mature? : empirical analyses on job quality in start-ups , 2005 .

[58]  G. Imbens.  Semiparametric Estimation of Average Treatment Eects under Exogeneity: A Review , 2003 .