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Effects of continuous off-the-job training in East Germany after unification

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  • Lechner, Michael

Abstract

Retraining the labor force to match the demands of a modern economy is an important task during the transition process from a centrally planned to a market economy. This need is particular pressing in East Germany, because the transition process is much faster there than in the rest of Eastern Europe. Therefore, substantial resources are devoted to this purpose. This paper analyses the impact of continuous off-the-job training in East Germany from the point of view of the individuals who were in the labor force before German unification in 1990. It answers questions about the average gains from participating in a specific type of training. Typical outcomes considered to measure these gains are income, employment status, job security and expected career prospects. The methodology used for the empirical evaluation is the potential outcome approach to causality. This approach has received considerable attention in the statistical literature over the last 15 years and it has been recently rediscovered by the econometric literature as well. Here, it is adapted to allow for important permanent and transitory shocks that influence the decision to participate in the training as well as future labor market outcomes. The empirical results are based on the first five waves of the Socio-Economic Pariel (GSOEP)-East (1990-1994). This panel data set has the advantage that the fourth wave contains a special survey on continuous training and that it allows to keep track of individual behaviour on a monthly, respectively yearly, basis. The econometric analysis focuses on off-the-job training courses that began after unification. Although it is obviously too early to evaluate the long-run implications, the results suggest that at least in the short-run there are no positive effects. --

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Bibliographic Info

Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 95-27.

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Date of creation: 1995
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Handle: RePEc:zbw:zewdip:9527

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  1. Orley Ashenfelter & David Card, 1984. "Using the Longitudinal Structure of Earnings to Estimate the Effect of Training Programs," NBER Working Papers 1489, National Bureau of Economic Research, Inc.
  2. Blundell, Richard & Laisney, Francois & Lechner, Michael, 1993. "Alternative Interpretations of Hours Information in an Econometric Model of Labour Supply," Empirical Economics, Springer, vol. 18(3), pages 393-415.
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  7. Orme, Christopher, 1988. "The Calculation of the Information Matrix Test for Binary Data Models," The Manchester School of Economic & Social Studies, University of Manchester, vol. 56(4), pages 370-76, December.
  8. Gabler, Siegfried & Laisney, Francois & Lechner, Michael, 1993. "Seminonparametric Estimation of Binary-Choice Models with an Application to Labor-Force Participation," Journal of Business & Economic Statistics, American Statistical Association, vol. 11(1), pages 61-80, January.
  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. Bera, Anil K & Jarque, Carlos M & Lee, Lung-Fei, 1984. "Testing the Normality Assumption in Limited Dependent Variable Models," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 25(3), pages 563-78, October.
  11. 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).
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Cited by:
  1. repec:iab:iabmit:v:35:i:3:p:327-351 is not listed on IDEAS
  2. R. Hujer & K.-O. Maurer & M. Wellner, 1997. "The Impact of Training on Unemployment Duration in West Germany -Combining a Discrete Hazard Rate Model with Matching Techniques-," Econometrics 9705001, EconWPA.
  3. 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.
  4. Huber, Martin & Lechner, Michael & Wunsch, Conny & Walter, Thomas, 2009. "Do German Welfare-to-Work Programmes Reduce Welfare and Increase Work?," IZA Discussion Papers 4090, Institute for the Study of Labor (IZA).
  5. Augusto Castillo R., 2001. "Long-Run Performance Of Stock Returns Following Junk Bond Offerings," Abante, Escuela de Administracion. Pontificia Universidad Católica de Chile., vol. 4(1), pages 95-129.
  6. Dorothea Schäfer & Oleksandr Talavera, 2009. "Small business survival and inheritance: evidence from Germany," Small Business Economics, Springer, vol. 32(1), pages 95-109, January.
  7. Eichler, Martin & Lechner, Michael, 1996. "Public Sector Sponsored Continuous Vocational Training in East Germany : Institutional Arrangements, Participants, and Results of Empirical Evaluations," Discussion Papers 549, Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre.
  8. Patrick Puhani & Viktor Steiner, 1997. "The Effectiveness and Efficiency of Active Labour Market Policies in Poland," Empirica, Springer, vol. 24(3), pages 209-231, October.
  9. Maria Guadalupe & Olga Kuzmina & Catherine Thomas, 2010. "Innovation and Foreign Ownership," NBER Working Papers 16573, National Bureau of Economic Research, Inc.
  10. Wooldridge, Jeffrey M. & Imbens, Guido, 2009. "Recent Developments in the Econometrics of Program Evaluation," Scholarly Articles 3043416, Harvard University Department of Economics.
  11. Prey, Hedwig, 1997. "Beschäftigungswirkungen von öffentlich geförderten Qualifizierungsmaßnahmen: Eine Paneluntersuchung für Westdeutschland," Discussion Papers 41, University of Konstanz, Center for International Labor Economics (CILE).
  12. repec:iab:iabzaf:v:39:i:3/4:p:425-445 is not listed on IDEAS
  13. Lechner, Michael, 1996. "Nonparametric bounds on employment and income effects of continuous vocational training in East Germany," ZEW Discussion Papers 96-31, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  14. Prey, Hedwig & Fitzenberger, Bernd & Franz, Wolfgang, 1997. "Wirkungen von Maßnahmen staatlicher Arbeitsmarkt- und Beschäftigungspolitik," Discussion Papers 45, University of Konstanz, Center for International Labor Economics (CILE).

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