Long-term consequences of an innovative redundancy - retraining project : the Austrian Steel Foundation
AbstractIn the late 1980s, privatization and downsizing of nationalized steel mills, and related firms in the metal industry, have lead to large-scale redundancy plans. 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, 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 giving up the interest accruing to their redundancy payments. The report combined data from Austrian social security records, and from the Employment Service, to look at participation decisions, and at post-foundation economic performance. Then, as a control group, all displaced workers were taken into consideration, using instrumental variables to solve the selection problem. Results show considerable wage gains - even for a period of five years after leaving the Foundation - as well as improved employments prospects, and, finally, a cost-benefit analysis assesses the long-term success of the Foundation.
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Bibliographic InfoPaper provided by The World Bank in its series Social Protection Discussion Papers with number 23155.
Date of creation: 31 Jan 2001
Date of revision:
Health Monitoring&Evaluation; Labor Standards; Teaching and Learning; Tertiary Education; Environmental Economics&Policies;
Other versions of this item:
- Rudolf Winter-Ebmer, 2000. "Long-term consequences of an innovative redundancy-retraining project: The Austrian Steel Foundation," Economics working papers 2000-29, Department of Economics, Johannes Kepler University Linz, Austria.
- 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
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