Coping with a structural crisis: evaluating an innovative redundancy‐retraining project

Purpose - The purpose of this article is to evaluate a specific manpower training program in Austria; a program which was particularly designed for workers affected by a structural crisis in the steel industry. Design/methodology/approach - Microeconometric evaluation methods were used to assess earnings and employment probabilities up to five years after training. A treatment/control group approach was used together with instrumental variables estimates to control for selective entry into training. Findings - The results show considerable wage gains – even for a period of five years after leaving the Foundation – as well as improved employment prospects. Research limitations/implications - The research has concentrated on a very specific project, which was exceptional in terms of broad training and counseling as well as in terms of funding and selection of trainees; therefore, it is not easily generalisable to other programs. Practical implications - The success of the program can be traced back to high incentives of all participants which, in turn, was caused by joint financing by local government, the workers themselves and the firm which made these workers redundant in the first place. Moreover, a combination of job counseling, search activities and training in capabilities which give presentable certificates turned out to be successful. Originality/value - The study will be valuable to those who look at specifics of job training programs as well as to those who are interested in designing programs for structural change.