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Estimating the Effect of Training on Employment and Unemployment Durations: Evidence From Experimental Data

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  • John C. Ham
  • Robert J. LaLonde

Abstract

Using data from a social experiment, we estimate the impact of training on the duration of employment and unemployment spells for AFDC recipients. Although an experimental design eliminates the need to construct a comparison group for this analysis, simple comparisons between the average durations or the transition rates of treatments' and controls' employment and unemployment spells lead to biased estimates of the effects of training. We present and implement several econometric approaches that demonstrate the importance of and correct for these biases. For the training program studied in the paper, we find that it raised employment rates because employment durations increased. In contrast, training did not lead to shorter unemployment spells.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3912.

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Date of creation: Nov 1991
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Publication status: Published as "The Effect of Sample Selection and Initial Conditions in Duration Models: Evidence from Experimental Data on Training", Econometrica Vol. 64 (1), 1996, pp. 175-205.
Handle: RePEc:nbr:nberwo:3912

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  1. Lancaster, Tony, 1979. "Econometric Methods for the Duration of Unemployment," Econometrica, Econometric Society, Econometric Society, vol. 47(4), pages 939-56, July.
  2. Heckman, James J. & Singer, Burton, 1984. "Econometric duration analysis," Journal of Econometrics, Elsevier, Elsevier, vol. 24(1-2), pages 63-132.
  3. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
  4. 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.
  5. Ridder, G, 1986. "An Event History Approach to the Evaluation of Training, Recruitment and Employment Programmes," Journal of Applied Econometrics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 1(2), pages 109-26, April.
  6. Burt S. Barnow, 1987. "The Impact of CETA Programs on Earnings: A Review of the Literature," Journal of Human Resources, University of Wisconsin Press, vol. 22(2), pages 157-193.
  7. 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.
  8. Christopher J. Flinn & James J. Heckman, 1982. "Models for the Analysis of Labor Force Dynamics," NBER Working Papers 0857, National Bureau of Economic Research, Inc.
  9. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, Econometric Society, vol. 52(2), pages 271-320, March.
  10. Nickell, Stephen J, 1979. "Estimating the Probability of Leaving Unemployment," Econometrica, Econometric Society, Econometric Society, vol. 47(5), pages 1249-66, September.
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Cited by:
  1. Costas Meghir & Whitehouse, E, 1995. "Labour market transitions and retirement of men in the UK," IFS Working Papers, Institute for Fiscal Studies W95/10, Institute for Fiscal Studies.
  2. Holm, Anders, 2002. "The effect of training on search durations: a random effects approach," Labour Economics, Elsevier, Elsevier, vol. 9(3), pages 433-450, July.
  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.

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