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The Impact of Training on Unemployment Duration in West Germany -Combining a Discrete Hazard Rate Model with Matching Techniques-

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Author Info

  • R. Hujer

    (Johann Wolfgang Goethe-University, Frankfurt/Main)

  • K.-O. Maurer

    (Johann Wolfgang Goethe-University, Frankfurt/Main)

  • M. Wellner

    (Johann Wolfgang Goethe-University, Frankfurt/Main)

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    Abstract

    In this study we are concerned with the impact of vocational training on the individual's unemployment duration in West Germany. The data basis used is the German Socio-Economic Panel (GSOEP) for the period from 1984 to 1994. To resolve the intriguing sample selection problem, i.e. to find an adequate control group for the group of trainees, we employ a matching algorithm which was developed in the statistical literature. This matching algorithm uses as the main matching variable the individual propensity score to pariticipate in training, which is obtained by estimating a random effects probit model. On the basis of the matched sample a discrete time hazard rate model is utilized to assess the impact of vocational training on unemployment duration. Our results indicate, that training raises the transition rate of unemployed into employment in the short as well as in the long run.

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    Bibliographic Info

    Paper provided by EconWPA in its series Econometrics with number 9705001.

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    Length: 36 pages
    Date of creation: 05 May 1997
    Date of revision:
    Handle: RePEc:wpa:wuwpem:9705001

    Note: 36 pages, 6 figures, 4 tables
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    Web page: http://128.118.178.162

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    References

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    1. Michael Lechner, 2000. "An Evaluation of Public-Sector-Sponsored Continuous Vocational Training Programs in East Germany," Journal of Human Resources, University of Wisconsin Press, vol. 35(2), pages 347-375.
    2. Butler, J S & Moffitt, Robert, 1982. "A Computationally Efficient Quadrature Procedure for the One-Factor Multinomial Probit Model," Econometrica, Econometric Society, vol. 50(3), pages 761-64, May.
    3. Orley Ashenfelter & David Card, 1984. "Using the Longitudinal Structure of Earnings to Estimate the Effect of Training Programs," Working Papers 554, Princeton University, Department of Economics, Industrial Relations Section..
    4. Heckman, J.J. & Hotz, V.J., 1988. "Choosing Among Alternative Nonexperimental Methods For Estimating The Impact Of Social Programs: The Case Of Manpower Training," University of Chicago - Economics Research Center 88-12, Chicago - Economics Research Center.
    5. Heckman, James J. & Robb, Richard Jr., 1985. "Alternative methods for evaluating the impact of interventions : An overview," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 239-267.
    6. Gary Burtless & Larry L. Orr, 1986. "Are Classical Experiments Needed for Manpower Policy," Journal of Human Resources, University of Wisconsin Press, vol. 21(4), pages 606-639.
    7. Fitzenberger, Bernd & Prey, Hedwig, 1996. "Training in East Germany: An evaluation of the effects on employment and wages," Discussion Papers 36, University of Konstanz, Center for International Labor Economics (CILE).
    8. Fitzenberger, Bernd & Prey, Hedwig, 1995. "Assessing the impact of training on employment: The case of East Germany," Discussion Papers 23, University of Konstanz, Center for International Labor Economics (CILE).
    9. Card, David & Sullivan, Daniel G, 1988. "Measuring the Effect of Subsidized Training Programs on Movements in and out of Employment," Econometrica, Econometric Society, vol. 56(3), pages 497-530, May.
    10. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
    11. Ham, John C & LaLonde, Robert J, 1996. "The Effect of Sample Selection and Initial Conditions in Duration Models: Evidence from Experimental Data on Training," Econometrica, Econometric Society, vol. 64(1), pages 175-205, January.
    12. LaLonde, Robert J, 1986. "Evaluating the Econometric Evaluations of Training Programs with Experimental Data," American Economic Review, American Economic Association, vol. 76(4), pages 604-20, September.
    13. Gritz, R. Mark, 1993. "The impact of training on the frequency and duration of employment," Journal of Econometrics, Elsevier, vol. 57(1-3), pages 21-51.
    14. Elbers, Chris & Ridder, Geert, 1982. "True and Spurious Duration Dependence: The Identifiability of the Proportional Hazard Model," Review of Economic Studies, Wiley Blackwell, vol. 49(3), pages 403-09, July.
    15. James J. Heckman & Jeffrey A. Smith, 1995. "Assessing the Case for Social Experiments," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 85-110, Spring.
    16. Lechner, Michael, 1995. "Effects of continuous off-the-job training in East Germany after unification," ZEW Discussion Papers 95-27, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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    Cited by:
    1. R. Hujer & K.-O. Maurer & M. Wellner, 1997. "Estimating the Effect of Training on Unemployment Duration in West Germany - A Discrete Hazard-Rate Model with Instrumental Variables," Econometrics 9704001, EconWPA.
    2. Michael Lechner, 2002. "Mikroökonometrische Evaluation arbeitsmarktpolitischer Massnahmen," University of St. Gallen Department of Economics working paper series 2002 2002-20, Department of Economics, University of St. Gallen.

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