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Estimating the Effect of a Retraining Program for Displaced Workers on Their Transition to Permanent Jobs

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Author Info

  • Cavaco, Sandra

    ()
    (University of Paris 2)

  • Fougère, Denis

    ()
    (CREST)

  • Pouget, Julien

    ()
    (CREST (ENSAE))

Abstract

In this paper we estimate the short-term effects of a French retraining program that was intended to improve reemployment prospects of displaced workers. Our empirical analysis uses non-experimental data collected by the French Ministry of Labour. Transitions from unemployment to permanent vs. temporary jobs are assumed to be generated by a dependent competing risks duration model. Moreover we assume that program entry but also direct transitions from the program to employment are both affected by a selectivity process depending on observable and unobservable individual heterogeneity. We find mixed evidence regarding relevance of the program. For displaced workers who join the program, program participation increases the average probability to obtain a permanent job by 8 points (passing from 42 to 50%). However, for displaced workers who do not join the program, this average probability would have been increased by 28 points (passing from 43 to 71%) had they participated in the program. We conclude that, although the program has been globally effective, it has been insufficiently proposed to the displaced workers who would have benefited the most from it.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1513.

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Length: 27 pages
Date of creation: Mar 2005
Date of revision:
Publication status: published in French under the title: "Conventions de conversion et retour à l'emploi", Economie et Prévision, 2004 (164-165), 93-111
Handle: RePEc:iza:izadps:dp1513

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Related research

Keywords: re-employment program; displaced workers; unemployment duration; dependent competing risks model; evaluation;

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References

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  1. Ruhm, Christopher J, 1991. "Are Workers Permanently Scarred by Job Displacements?," American Economic Review, American Economic Association, vol. 81(1), pages 319-24, March.
  2. Fougère & Kramarz & Thierry Magnac, 2000. "Youth employment policies in France," Working Papers 156232, Institut National de la Recherche Agronomique, France.
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  6. FLORENS, Jean-Pierre & FOUGERE, Denis & MOUCHART, Michel, 1995. "Duration Models," CORE Discussion Papers 1995016, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  7. Margolis, D.N., 2000. "Worker Displacement in France," Papiers d'Economie Mathématique et Applications 2000.03, Université Panthéon-Sorbonne (Paris 1).
  8. Bruce C. Fallick, 1995. "A review of the recent empirical literature on displaced workers," Finance and Economics Discussion Series 95-14, Board of Governors of the Federal Reserve System (U.S.).
  9. Paul Swaim & Michael Podgursky, 1991. "The Distribution of Economic Losses among Displaced Workers: A Replication," Journal of Human Resources, University of Wisconsin Press, vol. 26(4), pages 742-755.
  10. Bonnal, Liliane & Fougere, Denis & Serandon, Anne, 1997. "Evaluating the Impact of French Employment Policies on Individual Labour Market Histories," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 683-713, October.
  11. Mitali Das & Whitney K. Newey & Francis Vella, 2003. "Nonparametric Estimation of Sample Selection Models," Review of Economic Studies, Wiley Blackwell, vol. 70(1), pages 33-58, January.
  12. Dar, Amit & Gill, Indermit S, 1998. "Evaluating Retraining Programs in OECD Countries: Lessons Learned," World Bank Research Observer, World Bank Group, vol. 13(1), pages 79-101, February.
  13. Lalive, R. & Ours, J.C. van & Zweimüller, J., 2000. "The Impact of Active Labor Market Programs and Benefit Entitlement Rules on the Duration of Unemployment," Discussion Paper 2000-41, Tilburg University, Center for Economic Research.
  14. Henry S. Farber, 1999. "Alternative and Part-Time Employment Arrangements as a Response to Job Loss," NBER Working Papers 7002, National Bureau of Economic Research, Inc.
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  16. Addison, John T & Portugal, Pedro, 1989. "Job Displacement, Relative Wage Changes, and Duration of Unemployment," Journal of Labor Economics, University of Chicago Press, vol. 7(3), pages 281-302, July.
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Citations

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Cited by:
  1. Cavaco, Sandra & Fougère, Denis & Pouget, Julien, 2008. "Estimating the Effect of a Retraining Program on the Re-Employment Rate of Displaced Workers," CEPR Discussion Papers 7094, C.E.P.R. Discussion Papers.
  2. Kluve, Jochen, 2006. "The Effectiveness of European Active Labor Market Policy," IZA Discussion Papers 2018, Institute for the Study of Labor (IZA).
  3. Bergemann, Annette & van den Berg, Gerard J., 2006. "Active Labor Market Policy Effects for Women in Europe: A Survey," IZA Discussion Papers 2365, Institute for the Study of Labor (IZA).
  4. Kluve, Jochen, 2010. "The effectiveness of European active labor market programs," Labour Economics, Elsevier, vol. 17(6), pages 904-918, December.
  5. Wulfgramm, Melike & Fervers, Lukas, 2013. "Unemployment and Subsequent Employment Stability: Does Labour Market Policy Matter?," IZA Discussion Papers 7193, Institute for the Study of Labor (IZA).
  6. Stavros Rodokanakis, 2010. "Unemployment Risk in Southern Greece," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 13(35), pages 55-82, (1).
  7. Stavros Rodokanakis, 2010. "A Non-Experimental Evaluation of Unemployment Risk in Crete and the Ionian Islands: Regional Evidence for Greece," Acta Oeconomica Pragensia, University of Economics, Prague, vol. 2010(4), pages 44-63.
  8. RODOKANAKIS, Stavros & VLACHOS, Vasileios, 2010. "A Non-Experimental Evaluation Of Education And Training In Greece: The Cases Of Northern Aegean And Crete," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 10(1).
  9. Stavros Rodokanakis & Vasileios A. Vlachos Author-Workplace-Department of European and International Studies, University of Macedonia, 2012. "Measuring the Unemployment Risk in Northern Greece from the LFS Micro-Data during the Period 1994-2006," Review of Economic Analysis, Rimini Centre for Economic Analysis, vol. 4(2), pages 224-246, December.

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