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Labour market effects of retraining for the unemployed: the role of occupations

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  • Thomas Kruppe
  • Julia Lang

Abstract

We analyse the impact of retraining for unemployed low-skilled job-seekers in Germany. This extensive training programme leads to a formal vocational degree, which is often required to access certain professions. Applying statistical matching methods, we find that on average, after a period with large lock-in effects, retraining strongly increases the employment probability of participants, especially women. We add to the literature by estimating the employment effects for different occupations for which participants are trained. Our results show that there are substantial differences depending on the occupation. As the composition of trained occupations differs for men and women, segregation could be a driver of higher employment effects for women. However, comparisons of men and women trained for the same occupations reveal that even after controlling for segregation, women profit more from retraining. While caseworkers are instructed to choose professions with high labour demand, other aspects, such as working conditions, preferences and aptitudes of participants, should be crucial in the choice of a suitable occupation. An individual assessment of the suitability of an occupation could therefore improve the overall effectiveness of the programme.

Suggested Citation

  • Thomas Kruppe & Julia Lang, 2018. "Labour market effects of retraining for the unemployed: the role of occupations," Applied Economics, Taylor & Francis Journals, vol. 50(14), pages 1578-1600, March.
  • Handle: RePEc:taf:applec:v:50:y:2018:i:14:p:1578-1600
    DOI: 10.1080/00036846.2017.1368992
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    2. Büttner, Thomas & Schewe, Torben & Stephan, Gesine, 2015. "Wirkung arbeitsmarktpolitischer Instrumente im SGB III: Maßnahmen auf dem Prüfstand (Measures under scrutiny : The effectiveness of active labor market policy instruments in Germany)," IAB-Kurzbericht 201508, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Anja Bauer & Ian King, 2015. "The Hartz Reforms, the German Miracle, and the Reallocation Puzzle," Discussion Papers Series 550, School of Economics, University of Queensland, Australia.
    4. Lang, Julia & Dauth, Christine, 2017. "Should the unemployed care for the elderly? The effect of subsidized occupational and further training in geriatric care," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168130, Verein für Socialpolitik / German Economic Association.
    5. Grigoli, Francesco & Koczan, Zsoka & Topalova, Petia, 2020. "Automation and labor force participation in advanced economies: Macro and micro evidence," European Economic Review, Elsevier, vol. 126(C).
    6. Kruppe, Thomas & Lang, Julia, 2015. "Weiterbildungen mit Berufsabschluss: Arbeitslose profitieren von Qualifizierungen (Retraining: Unemployed individuals gain from vocational training)," IAB-Kurzbericht 201522, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    7. Zachary J Ward & Michael W Long & Stephen C Resch & Steven L Gortmaker & Angie L Cradock & Catherine Giles & Amber Hsiao & Y Claire Wang, 2016. "Redrawing the US Obesity Landscape: Bias-Corrected Estimates of State-Specific Adult Obesity Prevalence," PLOS ONE, Public Library of Science, vol. 11(3), pages 1-13, March.
    8. Rüdiger Wapler & Daniel Werner & Katja Wolf, 2018. "Active labour market policies in Germany: do regional labour markets benefit?," Applied Economics, Taylor & Francis Journals, vol. 50(51), pages 5561-5578, November.
    9. Kruppe, Thomas & Mühlhan, Jannek & Weber, Enzo & Wiemers, Jürgen, 2019. "Gesamtfiskalische Wirkungen von Weiterbildungsförderung: Öffentliche Ausgaben generieren hohe Rückflüsse," IAB-Kurzbericht 201908, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    10. Bläsche, Alexandra & Brandherm, Ruth & Eckhardt, Christoph & Käpplinger, Bernd & Knuth, Matthias & Kruppe, Thomas & Kuhnhenne, Michaela & Schütt, Petra, 2017. "Qualitätsoffensive strukturierte Weiterbildung in Deutschland," Working Paper Forschungsförderung 025, Hans-Böckler-Stiftung, Düsseldorf.
    11. Bauer, Anja & King, Ian, 2018. "The Hartz reforms, the German Miracle, and labor reallocation," European Economic Review, Elsevier, vol. 103(C), pages 1-17.
    12. Christine Dauth & Julia Lang, 2019. "Can the unemployed be trained to care for the elderly? The effects of subsidized training in elderly care," Health Economics, John Wiley & Sons, Ltd., vol. 28(4), pages 543-555, April.
    13. Dauth, Christine & Lang, Julia, 2017. "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].
    14. Vom Berge, Philipp & Klingert, Isabell & Becker, Sebastian & Lenhart, Julia & Trenkle, Simon & Umkehrer, Matthias, 2016. "Mindestlohnbegleitforschung - Überprüfung der Ausnahmeregelung für Langzeitarbeitslose : Forschungsauftrag des Bundesministeriums für Arbeit und Soziales (BMAS)," IAB-Forschungsbericht 201608, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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    More about this item

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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