Evaluating an Innovative Redundancy-Retraining Project: The Austrian Steel Foundation
AbstractThis paper evaluates an Austrian manpower training program, which is highly innovative in its content and financing - and could therefore serve as a role model for other programs. In the late 1980s privatization and down-sizing of nationalized steel firms have lead to large-scale redundancies. A special Steel Foundation was created as part of a social plan. This Foundation acted like an independent training center, where displaced workers would spend relatively long training periods (sometimes several years), obtaining personality and orientation training, as well as formal education. The last step of the integrative program was placement assistance as well as assistance for creating one’s own business. The Foundation was financed by (higher) contributions from unemployment insurance funds, by the previous firms themselves, as well as by a collectively-bargained special tax on the remaining workers in the Steel Firms. Moreover the trainees themselves would have to support the Foundation by depositing their redundancy payments. In evaluating post-foundation economic performance I use days worked and wage growth. As a control group I take all other displaced workers from the firms who formed the Foundation, using Instrumental Variables to solve the selection problem. The results show considerable wage gains - even for a period of five years after leaving the Foundation - as well as improved employment prospects. Finally, a cost-benefit analysis is performed to assess the long-term success of the Foundation.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 277.
Length: 42 pages
Date of creation: Mar 2001
Date of revision:
Publication status: published as 'Coping with a structural crisis: evaluating an innovative redundancy-retraining project' in: International Journal of Manpower, 2006, 27 (8), 700 - 721
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Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
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Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Other versions of this item:
- Winter-Ebmer, Rudolf, 2001. "Evaluating An Innovative Redundancy-Retraining Project: The Austrian Steel Foundation," CEPR Discussion Papers 2776, C.E.P.R. Discussion Papers.
- H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
- J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
- J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
- J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-03-13 (All new papers)
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