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Is Labour Market Training a Curse for the Unemployed? Evidence from a Social Experiment

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Author Info

  • Rosholm, Michael

    ()
    (Aarhus University)

  • Skipper, Lars

    ()
    (KORA - Danish Institute for Local and Regional Government Research)

Abstract

In this paper, we investigate the impact of classroom training programmes on individual unemployment rates in Denmark. In 1994 a social experiment was conducted, where unemployed applicants for labour market training were randomised into treatment and control groups. We formulate and estimate experimental impact estimators of the effect of treatment on the treated. The experimental data is polluted by the presence of no-shows and crossovers, which implies that traditional experimental estimators are biased. Therefore we formulate and estimate an endogenous variables model (using the randomisation indicator as a perfect exclusion restriction) and implement various matching estimators. We find – surprisingly – that classroom training significantly increases individual unemployment rates. We discuss some possible reasons for this surprising finding and some related policy issues.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 716.

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Length: 37 pages
Date of creation: Feb 2003
Date of revision:
Publication status: published in: Journal of Applied Econometrics, 2009, 24 (2), 338-365.
Handle: RePEc:iza:izadps:dp716

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Related research

Keywords: experimental and nonexperimental estimators; classroom training; programme evaluation; social experiment;

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Cited by:
  1. Ott-Siim Toomet, 2005. "Does an Increase in Unemployment Income Lead to Longer Unemployment Spells? Evidence Using Danish Unemployment Assistance Data," Bank of Estonia Working Papers 2005-09, Bank of Estonia, revised 10 Oct 2005.
  2. Rosholm, Michael & Svarer, Michael, 2004. "Estimating the Threat Effect of Active Labour Market Programmes," IZA Discussion Papers 1300, Institute for the Study of Labor (IZA).
  3. 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.
  4. Spermann, Alexander & Strotmann, Harald, 2005. "The Targeted Negative Income Tax (TNIT) in Germany: Evidence from a Quasi Experiment," ZEW Discussion Papers 05-68, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  5. Begoña Cueto & F. Mato, 2009. "A nonexperimental evaluation of training programmes: regional evidence for Spain," The Annals of Regional Science, Springer, vol. 43(2), pages 415-433, June.
  6. Sarah Bernhard & Thomas Kruppe, 2012. "Effectiveness of Further Vocational Training in Germany – Empirical Findings for Persons Receiving Means-tested Unemployment Benefits," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 132(4), pages 501-526.
  7. McGuinness, Seamus & O'Connell, Philip J. & Kelly, Elish & Walsh, John R., 2011. "Activation in Ireland: An Evaluation of the National Employment Action Plan," Research Series, Economic and Social Research Institute (ESRI), number RS20.
  8. Weber, Andrea & Hofer, Helmut, 2003. "Active Job-search Programs a Promising Tool? A Microeconometric Evaluation for Austria," Economics Series 131, Institute for Advanced Studies.

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