IDEAS home Printed from https://ideas.repec.org/a/spr/izaels/v4y2015i1p1-2610.1186-s40174-015-0047-9.html
   My bibliography  Save this article

The long-term earnings consequences of general vs. specific training of the unemployed

Author

Listed:
  • Anders Stenberg

    ()

  • Olle Westerlund

    ()

Abstract

Training programs for the unemployed typically involve training specific skills in demand amongst employers. In 1997, Swedish unemployed could also choose general schooling at the upper secondary level. This offers a unique opportunity to assess the theoretically ambiguous long-term relative earnings of general vs. specific training for unemployed. Analyzing detailed administrative data 1990–2010, we find 1) that specific training is associated with higher earnings in the short run, 2) that earnings converge 5–7 years post program and 3) that individuals act on their comparative advantages. When we extrapolate our estimates to life-time earnings, there is overall a relative advantage of specific training. However, for females with limited prior education, we find a relative life-time earnings advantage of general training. JEL-codes: I21, J62, J68 Copyright Stenberg and Westerlund. 2015

Suggested Citation

  • Anders Stenberg & Olle Westerlund, 2015. "The long-term earnings consequences of general vs. specific training of the unemployed," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-26, December.
  • Handle: RePEc:spr:izaels:v:4:y:2015:i:1:p:1-26:10.1186/s40174-015-0047-9
    DOI: 10.1186/s40174-015-0047-9
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1186/s40174-015-0047-9
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bruno Crépon & Esther Duflo & Marc Gurgand & Roland Rathelot & Philippe Zamora, 2013. "Do Labor Market Policies have Displacement Effects? Evidence from a Clustered Randomized Experiment," The Quarterly Journal of Economics, Oxford University Press, vol. 128(2), pages 531-580.
    2. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde, 2010. "Are Risk Aversion and Impatience Related to Cognitive Ability?," American Economic Review, American Economic Association, vol. 100(3), pages 1238-1260, June.
    3. David Card & Jochen Kluve & Andrea Weber, 2010. "Active Labour Market Policy Evaluations: A Meta-Analysis," Economic Journal, Royal Economic Society, vol. 120(548), pages 452-477, November.
    4. A. Smith, Jeffrey & E. Todd, Petra, 2005. "Does matching overcome LaLonde's critique of nonexperimental estimators?," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 305-353.
    5. James Albrecht & Gerard van den Berg & Susan Vroman, 2009. "The Aggregate Labor Market Effects of the Swedish Knowledge Lift Program," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 129-146, January.
    6. Michael Lechner & Ruth Miquel & Conny Wunsch, 2011. "Long‐Run Effects Of Public Sector Sponsored Training In West Germany," Journal of the European Economic Association, European Economic Association, vol. 9(4), pages 742-784, August.
    7. 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.
    8. Eric A. Hanushek & Guido Schwerdt & Ludger Woessmann & Lei Zhang, 2017. "General Education, Vocational Education, and Labor-Market Outcomes over the Lifecycle," Journal of Human Resources, University of Wisconsin Press, vol. 52(1), pages 48-87.
    9. Ashenfelter, Orley C, 1978. "Estimating the Effect of Training Programs on Earnings," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 47-57, February.
    10. Anders Stenberg & Xavier Luna & Olle Westerlund, 2014. "Does Formal Education for Older Workers Increase Earnings? — Evidence Based on Rich Data and Long-term Follow-up," LABOUR, CEIS, vol. 28(2), pages 163-189, June.
    11. Jacobson, Louis & LaLonde, Robert & G. Sullivan, Daniel, 2005. "Estimating the returns to community college schooling for displaced workers," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 271-304.
    12. Kluve, Jochen, 2010. "The effectiveness of European active labor market programs," Labour Economics, Elsevier, vol. 17(6), pages 904-918, December.
    13. Acemoglu, Daron & Pischke, Jorn-Steffen, 1999. "Beyond Becker: Training in Imperfect Labour Markets," Economic Journal, Royal Economic Society, vol. 109(453), pages 112-142, February.
    14. Dirk Krueger & Krishna B. Kumar, 2004. "Skill-Specific rather than General Education: A Reason for US--Europe Growth Differences?," Journal of Economic Growth, Springer, vol. 9(2), pages 167-207, June.
    15. Anders Stenberg & Olle Westerlund, 2015. "The long-term earnings consequences of general vs. specific training of the unemployed," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-26, December.
    16. Ben Jann, 2010. "Heterogeneous treatment-effect analysis," German Stata Users' Group Meetings 2010 03, Stata Users Group.
    17. Marco Caliendo & Sabine Kopeinig, 2008. "Some Practical Guidance For The Implementation Of Propensity Score Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 31-72, February.
    18. Lars Calmfors & Anders Forslund & Maria Hemström, 2002. "Does Active Labour Market Policy Work? Lessons from the Swedish Experiences," CESifo Working Paper Series 675, CESifo Group Munich.
    19. Carlos A. Flores & Alfonso Flores-Lagunes & Arturo Gonzalez & Todd C. Neumann, 2012. "Estimating the Effects of Length of Exposure to Instruction in a Training Program: The Case of Job Corps," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 153-171, February.
    20. Chabé-Ferret, Sylvain, 2015. "Analysis of the bias of Matching and Difference-in-Difference under alternative earnings and selection processes," Journal of Econometrics, Elsevier, vol. 185(1), pages 110-123.
    21. Stenberg, Anders & de Luna, Xavier & Westerlund, Olle, 2011. "Does Formal Education for Older Workers Increase Earnings? – Analyzing Annual Data Stretching over 25 Years," Umeå Economic Studies 823, Umeå University, Department of Economics.
    22. Krueger, Dirk & Kumar, Krishna B., 2004. "US-Europe differences in technology-driven growth: quantifying the role of education," Journal of Monetary Economics, Elsevier, vol. 51(1), pages 161-190, January.
    23. Anders Stenberg, 2007. "Comprehensive education or vocational training for the unemployed?," International Journal of Manpower, Emerald Group Publishing, vol. 28(1), pages 42-61, April.
    24. Stenberg, Anders, 2011. "Using longitudinal data to evaluate publicly provided formal education for low skilled," Economics of Education Review, Elsevier, vol. 30(6), pages 1262-1280.
    25. Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 2003. "Should we teach old dogs new tricks? the impact of community college retraining on older displaced workers," Working Paper Series WP-03-25, Federal Reserve Bank of Chicago.
    26. Stenberg, Anders & Westerlund, Olle, 2008. "Does comprehensive education work for the long-term unemployed," Labour Economics, Elsevier, vol. 15(1), pages 54-67, February.
    27. Joshua D. Angrist, 1998. "Estimating the Labor Market Impact of Voluntary Military Service Using Social Security Data on Military Applicants," Econometrica, Econometric Society, vol. 66(2), pages 249-288, March.
    28. James J. Heckman & Jeffrey A. Smith, 1999. "The Pre-Program Earnings Dip and the Determinants of Participation in a Social Program: Implications for Simple Program Evaluation Strategies," NBER Working Papers 6983, National Bureau of Economic Research, Inc.
    29. Xavier De Luna & Ingeborg Waernbaum & Thomas S. Richardson, 2011. "Covariate selection for the nonparametric estimation of an average treatment effect," Biometrika, Biometrika Trust, vol. 98(4), pages 861-875.
    30. Jochen Kluve & Hilmar Schneider & Arne Uhlendorff & Zhong Zhao, 2012. "Evaluating continuous training programmes by using the generalized propensity score," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 175(2), pages 587-617, April.
    31. David H. Greenberg & Charles Michalopoulos & Philip K. Robin, 2006. "Do experimental and nonexperimental evaluations give different answers about the effectiveness of government-funded training programs?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 25(3), pages 523-552.
    32. Heckman, James J & Smith, Jeffrey A, 1999. "The Pre-programme Earnings Dip and the Determinants of Participation in a Social Programme. Implications for Simple Programme Evaluation Strategies," Economic Journal, Royal Economic Society, vol. 109(457), pages 313-348, July.
    33. repec:sip:wpaper:11-003 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. López Mourelo, Elva & Escudero, Verónica, 2017. "Effectiveness of Active Labor Market Tools in Conditional Cash Transfers Programs: Evidence for Argentina," World Development, Elsevier, vol. 94(C), pages 422-447.
    2. repec:oup:cesifo:v:63:y:2017:i:3:p:255-269. is not listed on IDEAS
    3. Bart H. H. Golsteyn & Anders Stenberg, 2017. "Earnings over the Life Course: General versus Vocational Education," Journal of Human Capital, University of Chicago Press, vol. 11(2), pages 167-212.
    4. Anders Stenberg & Olle Westerlund, 2015. "The long-term earnings consequences of general vs. specific training of the unemployed," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-26, December.
    5. Franziska Hampf & Ludger Woessmann, 2017. "Vocational vs. General Education and Employment over the Life Cycle: New Evidence from PIAAC," CESifo Economic Studies, CESifo, vol. 63(3), pages 255-269.
    6. Jan O. Jonsson & Carina Mood & Erik Bihagen, 2016. "Poverty trends during two recessions and two recoveries: lessons from Sweden 1991–2013," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-20, December.
    7. repec:cep:cverdp:003 is not listed on IDEAS
    8. Verhaest, Dieter & Baert, Stijn, 2015. "The Early Labour Market Effects of Generally and Vocationally Oriented Higher Education: Is There a Trade-off?," IZA Discussion Papers 9137, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    Active labor market programs; Adult education; Vocational training; Earnings;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:izaels:v:4:y:2015:i:1:p:1-26:10.1186/s40174-015-0047-9. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: http://www.springer.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.