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

Author

Listed:
  • Cavaco, Sandra

    (University of Paris 2)

  • Fougère, Denis

    (Sciences Po, Paris)

  • Pouget, Julien

    (ENSAE ParisTech)

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.

Suggested Citation

  • Cavaco, Sandra & Fougère, Denis & Pouget, Julien, 2005. "Estimating the Effect of a Retraining Program for Displaced Workers on Their Transition to Permanent Jobs," IZA Discussion Papers 1513, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp1513
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    References listed on IDEAS

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    Cited by:

    1. Annette Bergemann & Gerard J. Van Den Berg, 2008. "Active Labor Market Policy Effects for Women in Europe - A Survey," Annals of Economics and Statistics, GENES, issue 91-92, pages 385-408.
    2. Bernhard Boockmann & Tobias Brändle, 2015. "Integrating Older Employees into the Labour Market – Evidence from a German Labour Market Programme," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(3), pages 59-64, October.
    3. Sandra Cavaco & Denis Fougère & Julien Pouget, 2013. "Estimating the effect of a retraining program on the re-employment rate of displaced workers," Empirical Economics, Springer, vol. 44(1), pages 261-287, February.
    4. repec:ces:ifodic:v:13:y:2015:i:3:p:19172607 is not listed on IDEAS
    5. Kluve, Jochen & Fertig, Michael & Jacobi, Lena & Nima, Leonhard & Schaffner, Sandra & Schmidt, Christoph M. & Card, David & Góra, Marek & Jensen, Peter & Leetmaa, Reelika & Patacchini, Eleonora & van , 2005. "Study on the effectiveness of ALMPs: Research project for the European Commission, DG Employment, Social Affairs and Equal Opportunities. Final report," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 69929.
    6. Rodokanakis Stavros, 2010. "The Dynamics of Regional Labour Markets and Training Programmes: Greek Evidence," European Spatial Research and Policy, Sciendo, vol. 17(1), pages 93-115, June.
    7. Jochen Kluve, 2006. "The Effectiveness of European Active Labor Market Policy," RWI Discussion Papers 0037, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.
    8. Kluve, Jochen, 2010. "The effectiveness of European active labor market programs," Labour Economics, Elsevier, vol. 17(6), pages 904-918, December.
    9. Stavros Rodokanakis & Vasileios A. Vlachos, 2012. "Measuring the Unemployment Risk in Northern Greece from the LFS Micro-Data during the Period 1994-2006," Review of Economic Analysis, Digital Initiatives at the University of Waterloo Library, vol. 4(2), pages 224-246, December.
    10. Kluve, Jochen, 2006. "The Effectiveness of European Active Labor Market Policy," RWI Discussion Papers 37, RWI - Leibniz-Institut für Wirtschaftsforschung.
    11. 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).
    12. Kluve, Jochen, 2006. "The Effectiveness of European Active Labor Market Policy," IZA Discussion Papers 2018, Institute of Labor Economics (IZA).
    13. repec:zbw:rwidps:0037 is not listed on IDEAS
    14. Fervers, Lukas & Brändle, Tobias & Webel, Carina, 2014. "Decomposing a Matching Estimation - Correlated Unobserved non-random Selection, Substitution, and Causal Effects in a Large Scale ALMP Program in Germany," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100500, Verein für Socialpolitik / German Economic Association.
    15. 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).
    16. Stavros Rodokanakis, 2010. "A Non-Experimental Evaluation of Unemployment Risk in Crete and the Ionian Islands: Regional Evidence for Greece," Acta Oeconomica Pragensia, Prague University of Economics and Business, vol. 2010(4), pages 44-63.
    17. Bernhard Boockmann & Tobias Brändle, 2015. "Integrating Older Employees into the Labour Market – Evidence from a German Labour Market Programme," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(03), pages 59-64, October.
    18. Rodokanakis Stavros, 2009. "Comparing the Probability of Unemployment in Southern Greece Vis-À-Vis the Entire Country," Bulletin of Geography. Socio-economic Series, Sciendo, vol. 12(12), pages 17-43, January.
    19. Wulfgramm, Melike & Fervers, Lukas, 2013. "Unemployment and Subsequent Employment Stability: Does Labour Market Policy Matter?," IZA Discussion Papers 7193, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    re-employment program; displaced workers; unemployment duration; dependent competing risks model; evaluation;
    All these keywords.

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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