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Evaluating the dynamic employment effects of training programs in East Germany using conditional difference-in-differences

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Author Info
Annette Bergemann
Bernd Fitzenberger
Stefan Speckesser (Westminster Business School, University of Westminster, London, UK)

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Abstract

This study analyzes the employment effects of training in East Germany. We propose and apply an extension of the widely used conditional difference-in-differences estimator. Focusing on transition rates between nonemployment and employment, we take into account that employment is a state- and duration-dependent process. Our results show that using transition rates is more informative than using unconditional employment rates as commonly done in the literature. Moreover, the results indicate that due to the labor market turbulence during the East German transformation process the focus on labor market dynamics is important. Training as a first participation in a program of Active Labor Market Policies shows zero to positive effects both on re-employment probabilities and on probabilities of remaining employed with notable variation over the different start dates of the program. Copyright © 2008 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/jae.1054
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File URL: http://qed.econ.queensu.ca:80/jae/2009-v24.5/
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Article provided by John Wiley & Sons, Ltd. in its journal Journal of Applied Econometrics.

Volume (Year): 24 (2009)
Issue (Month): 5 ()
Pages: 797-823
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Handle: RePEc:jae:japmet:v:24:y:2009:i:5:p:797-823

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Peter Fredriksson & Per Johansson, 2003. "Program Evaluation and Random Program Starts," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  2. Robert G. Fay, 1996. "Enhancing the Effectiveness of Active Labour Market Policies: Evidence from Programme Evaluations in OECD Countries," OECD Labour Market and Social Policy Occasional Papers 18, OECD, Directorate for Employment, Labour and Social Affairs. [Downloadable!]
  3. Kluve, Jochen & Lehmann, Hartmut & Schmidt, Christoph M., 1999. "Active Labor Market Policies in Poland: Human Capital Enhancement, Stigmatization or Benefit Churning," IZA Discussion Papers 30, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  4. Fitzenberger, Bernd & Prey, Hedwig, 2000. "Evaluating Public Sector Sponsored Training in East Germany," Oxford Economic Papers, Oxford University Press, vol. 52(3), pages 497-520, July.
  5. James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998. "Characterizing Selection Bias Using Experimental Data," Econometrica, Econometric Society, vol. 66(5), pages 1017-1098, September.
    Other versions:
  6. Puhani, Patrick A., 1999. "Estimating the effects of public training on Polish unemployment by way of the augmented matching function approach," ZEW Discussion Papers 99-38, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  7. Jeremy Lise & Shannon Seitz & Jeffrey Smith, 2005. "Equilibrium Policy Experiments and the Evaluation of Social Programs," Working Papers 1076, Queen's University, Department of Economics. [Downloadable!]
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  8. Eichler, Martin & Lechner, Michael, 2002. "An evaluation of public employment programmes in the East German State of Sachsen-Anhalt," Labour Economics, Elsevier, vol. 9(2), pages 143-186, April. [Downloadable!] (restricted)
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  9. Thierry Magnac & Michael Visser, 1999. "Transition Models With Measurement Errors," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 466-474, August. [Downloadable!] (restricted)
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  10. Martin, John P. & Grubb, David, 2001. "What works and for whom: a review of OECD countries' experiences with active labour market policies," Working Paper Series 2001:14, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
  11. Hidehiko Ichimura & Oliver Linton, 2001. "Asymptotic expansions for some semiparametric program evaluation estimators," CeMMAP working papers CWP04/01, Centre for Microdata Methods and Practice, Institute for Fiscal Studies. [Downloadable!]
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  12. James J. Heckman & Jeffrey A. Smith, 1999. "The Pre-Program Earnings Dip and the Determinants of Participation in a Social Program: Implications for Simple Program Evaluation Strategies," NBER Working Papers 6983, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  13. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Blackwell Publishing, vol. 65(2), pages 261-94, April. [Downloadable!] (restricted)
  14. Alberto Abadie & Guido W. Imbens, 2006. "On the Failure of the Bootstrap for Matching Estimators," NBER Technical Working Papers 0325, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  15. Bernd Fitzenberger & Stefan Speckesser, 2007. "Employment effects of the provision of specific professional skills and techniques in Germany," Empirical Economics, Springer, vol. 32(2), pages 529-573, May. [Downloadable!] (restricted)
  16. Michael Lechner & Ruth Miquel & Conny Wunsch, 2007. "The Curse and Blessing of Training the Unemployed in a Changing Economy: The Case of East Germany After Unification," German Economic Review, Blackwell Publishing, vol. 8, pages 468-509, November. [Downloadable!] (restricted)
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  17. George A. Akerlof & Andrew K. Rose & Janet L. Yellen & Helga Hessenius, 1991. "East Germany in from the Cold: The Economic Aftermath of Currency Union," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1991-1), pages 1-106. [Downloadable!]
  18. Ashenfelter, Orley C, 1978. "Estimating the Effect of Training Programs on Earnings," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 47-57, February. [Downloadable!] (restricted)
  19. James Albrecht & Gerard van den Berg & Susan Vroman, 2009. "The Aggregate Labor Market Effects of the Swedish Knowledge Lift Program," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 129-146, January. [Downloadable!] (restricted)
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  20. Jaap H. Abbring & Gerard J. van den Berg, 2003. "The Nonparametric Identification of Treatment Effects in Duration Models," Econometrica, Econometric Society, vol. 71(5), pages 1491-1517, 09. [Downloadable!] (restricted)
  21. Ashenfelter, Orley & Card, David, 1985. "Using the Longitudinal Structure of Earnings to Estimate the Effect of Training Programs," The Review of Economics and Statistics, MIT Press, vol. 67(4), pages 648-60, November. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Lechner, Michael & Wunsch, Conny, 2006. "Active labour market policy in East Germany : waiting for the economy to take off," IAB Discussion Paper 200620, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
    Other versions:
  2. Jochen Kluve & Lena Jacobi, 2006. "Before and After the Hartz Reforms: The Performance of Active Labour Market Policy in Germany," RWI Discussion Papers 0041, Rheinisch-Westfälisches Institut für Wirtschaftsforschung. [Downloadable!]
  3. Albrecht, James & van den Berg, Gerard J & Vroman, Susan, 2004. "The knowledge lift: The Swedish adult education program that aimed to eliminate low worker skill levels," Working Paper Series 2004:17, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
    Other versions:
  4. Osikominu, Aderonke & Orlyanskaya, Olga & Fitzenberger, Bernd & Waller, Marie, 2008. "Déj? Vu? Short-Term Training in Germany 1980-1992 and 2000-2003," ZEW Discussion Papers 08-038, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
    Other versions:
  5. Christoph Wunder & Johannes Schwarze & Gerhard Krug & Bodo Herzog, 2006. "Welfare Effects of the Euro Cash Changeover," IZA Discussion Papers 2508, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  6. Eva Reinowski, 2004. "Mikroökonometrische Evaluation und das Selektionsproblem – Ein anwendungsorientierter Überblick über nichtparametrische Lösungsverfahren –," IWH Discussion Papers 200, Halle Institute for Economic Research. [Downloadable!]
  7. Bernd Fitzenberger & Stefan Speckesser, 2005. "Employment Effects of the Provision of Specific Professional Skills and Techniques in Germany," IZA Discussion Papers 1868, Institute for the Study of Labor (IZA). [Downloadable!]
  8. Buscha, Franz & Maurel, Arnaud & Page, Lionel & Speckesser, Stefan, 2008. "The Effect of High School Employment on Educational Attainment: A Conditional Difference-in-Differences Approach," IZA Discussion Papers 3696, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  9. Bernd Fitzenberger & Stefan Speckesser, 2007. "Employment effects of the provision of specific professional skills and techniques in Germany," Empirical Economics, Springer, vol. 32(2), pages 529-573, May. [Downloadable!] (restricted)
  10. Michael Lechner & Ruth Miquel, 2005. "Identification of the Effects of Dynamic Treatments by Sequential Conditional Independence Assumptions," University of St. Gallen Department of Economics working paper series 2005 2005-17, Department of Economics, University of St. Gallen. [Downloadable!]
  11. Jose Galdo & Jeffrey Smith & Dan Black, 2007. "Bandwidth Selection and the Estimation of Treatment Effects with Unbalanced Data," IZA Discussion Papers 3095, Institute for the Study of Labor (IZA). [Downloadable!]
  12. Fitzenberger, Bernd & Speckesser, Stefan, 2005. "Employment effects of the provision of specific professional skills and techniques in Germany," IAB Discussion Paper 200521, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
  13. Bergemann, Annette & van den Berg, Gerard J., 2008. "From Giving Birth to Paid Labor: The Effects of Adult Education for Prime-Aged Mothers," IZA Discussion Papers 3600, Institute for the Study of Labor (IZA). [Downloadable!]
  14. Conny Wunsch, 2005. "Labour Market Policy in Germany: Institutions, Instruments and Reforms since Unification," University of St. Gallen Department of Economics working paper series 2005 2005-06, Department of Economics, University of St. Gallen. [Downloadable!]
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