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Quick Job Entry or Long-Term Human Capital Development? The Dynamic Effects of Alternative Training Schemes

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  • Aderonke Osikominu

Abstract

This article investigates how precisely short-term, job search-oriented training programs as opposed to long-term, human capital intensive training programs work. We evaluate and compare their effects on time until job entry, stability of employment, and earnings. Further, we examine the heterogeneity of treatment effects according to the timing of training during unemployment as well as across different subgroups of participants. We find that participating in short-term training reduces the remaining time in unemployment and moderately increases job stability. Long-term training programs initially prolong the remaining time in unemployment, but once the scheduled program end is reached participants exit to employment at a much faster rate than without training. In addition, they benefit from substantially more stable employment spells and higher earnings. Overall, long-term training programs are well effective in supporting the occupational advancement of very heterogeneous groups of participants, including those with generally weak labor market prospects. However, from a fiscal perspective only the low-cost short-term training schemes are cost efficient in the short run. Copyright , Oxford University Press.

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  • Aderonke Osikominu, 2013. "Quick Job Entry or Long-Term Human Capital Development? The Dynamic Effects of Alternative Training Schemes," Review of Economic Studies, Oxford University Press, vol. 80(1), pages 313-342.
  • Handle: RePEc:oup:restud:v:80:y:2013:i:1:p:313-342
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    File URL: http://hdl.handle.net/10.1093/restud/rds022
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    Cited by:

    1. Robert W. Fairlie & Dean Karlan & Jonathan Zinman, 2015. "Behind the GATE Experiment: Evidence on Effects of and Rationales for Subsidized Entrepreneurship Training," American Economic Journal: Economic Policy, American Economic Association, vol. 7(2), pages 125-161, May.
    2. Kruppe, Thomas & Lang, Julia, 2014. "Labour market effects of retraining for the unemployed : the role of occupations," IAB Discussion Paper 201420, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Dengler, Katharina, 2015. "Effectiveness of Sequences of Classroom Training for Welfare Recipients: What works best in West Germany?," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113119, Verein für Socialpolitik / German Economic Association.
    4. Jochen Kluve & Laura Ripani & David Rosas-Shady & Pablo Ibarraran, 2015. "Experimental Evidence on the Long Term Impacts of a Youth Training Program," IDB Publications (Working Papers) 7367, Inter-American Development Bank.
    5. Fitzenberger, Bernd & Furdas, Marina & Sajons, Christoph, 2016. "End-of-year spending and the long-run employment effects of training programs for the unemployed," ZEW Discussion Papers 16-084, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    6. Martin Biewen & Bernd Fitzenberger & Aderonke Osikominu & Marie Paul, 2014. "The Effectiveness of Public-Sponsored Training Revisited: The Importance of Data and Methodological Choices," Journal of Labor Economics, University of Chicago Press, vol. 32(4), pages 837-897.
    7. Heyer, Gerd & Koch, Susanne & Stephan, Gesine & Wolff, Joachim, 2011. "Evaluation der aktiven Arbeitsmarktpolitik: Ein Sachstandsbericht für die Instrumentenreform 2011 (Evaluation of active labor market programs : a summary of recent results for the German program refor," IAB Discussion Paper 201117, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    8. John C. Ham & Xianghong Li & Lara D. Shore-Sheppard, 2016. "The Employment Dynamics of Disadvantaged Women: Evidence from the SIPP," Journal of Labor Economics, University of Chicago Press, vol. 34(4), pages 899-944.
    9. Lang, Julia & Dauth, Christine, 2017. "Should the unemployed care for the elderly? The effect of subsidized occupational and further training in geriatric care," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168130, Verein für Socialpolitik / German Economic Association.
    10. Caliendo, Marco & Künn, Steffen & Uhlendorff, Arne, 2016. "Earnings exemptions for unemployed workers: The relationship between marginal employment, unemployment duration and job quality," Labour Economics, Elsevier, vol. 42(C), pages 177-193.
    11. Böhm, Sebastian & Grossmann, Volker & Steger, Thomas M., 2015. "Does expansion of higher education lead to trickle-down growth?," Journal of Public Economics, Elsevier, vol. 132(C), pages 79-94.
    12. Eva M. Berger & Guenther Koenig & Henning Mueller & Felix Schmidt & Daniel Schunk, 2016. "Self-Regulation Training, Labor Market Reintegration of Unemployed Individuals, and Locus of Control Evidence from a Natural Field Experiment," Working Papers 1622, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz, revised 2016.
    13. Bernd Fitzenberger & Olga Orlanski & Aderonke Osikominu & Marie Paul, 2013. "Déjà Vu? Short-term training in Germany 1980–1992 and 2000–2003," Empirical Economics, Springer, vol. 44(1), pages 289-328, February.
    14. Eva m. Berger & Guenther Koenig & Henning Müller & Felix Schmidt & Daniel Schunk, 2017. "Self-Regulation Training and Job Search Effort: A Natural Field Experiment within an Active Labor Market Program," Working Papers 1712, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz.
    15. Reinhard Hujer, 2011. "Mikroökonometrie und Kausalität: Zur Bedeutung arbeitsmarktpolitischer Evaluationsstudien," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer;Deutsche Statistische Gesellschaft - German Statistical Society, vol. 5(1), pages 5-18, March.
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    17. Aderonke Osikominu, 2016. "The dynamics of training programs for the unemployed," IZA World of Labor, Institute for the Study of Labor (IZA), pages 277-277, July.
    18. Biewen, Martin & Tapalaga, Madalina, 2017. "Early Tracking, Academic vs. Vocational Training and the Value of 'Second Chance' Options," IZA Discussion Papers 11080, Institute for the Study of Labor (IZA).
    19. Dauth, Christine & Lang, Julia, "undated". "Should the unemployed care for the elderly? : The effect of subsidized occupational and further training in elderly care," IAB Discussion Paper 201713, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    20. Govert Bijwaard & Stijn Doeselaar, 2014. "The impact of changes in the marital status on return migration of family migrants," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(4), pages 961-997, October.

    More about this item

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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