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The effects of training incidence and planned training duration on labor market transitions

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  • Fitzenberger, Bernd
  • Osikominu, Aderonke
  • Paul, Marie

Abstract

This paper uses a dynamic model for employment and training transitions in discrete time to estimate average employment effects of training incidence and planned training duration for the treated. We account for the dynamics of program start and continuation while treatment and outcome transitions are linked through correlated individual-specific effects. Identification relies on a consistency condition, conditional sequential randomization, time-varying covariates, and exclusion restrictions. We implement our framework applying MCMC methods to rich administrative data for a large training program in Germany. In addition to finding a positive training effect on employment between 6 and 12 percentage points 2.5 years after program start, we demonstrate that a longer planned training duration typically results in higher medium- to long-term employment gains.

Suggested Citation

  • Fitzenberger, Bernd & Osikominu, Aderonke & Paul, Marie, 2023. "The effects of training incidence and planned training duration on labor market transitions," Journal of Econometrics, Elsevier, vol. 235(1), pages 256-279.
    • Handle: RePEc:eee:econom:v:235:y:2023:i:1:p:256-279
    DOI: 10.1016/j.jeconom.2022.03.004
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    References listed on IDEAS

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    More about this item

    Keywords

    Dynamic treatment effects; Dynamic nonlinear panel data models; MCMC; Training; Active labor market programs;
    All these keywords.

    JEL classification:

    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General

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