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Skill formation among vocational rehabilitation clients - public policy vs private incentives


  • Arild Aakvik
  • Egil Kjerstad


In this paper we analyse individual vocational rehabilitation clients' decisions to enter active training or not. Although the Government pays the direct costs of training, the composition of the total costs of training may be decisive for individual choices. Based on labour market theory, we relate background characteristics of the clients to monetary opportunity costs and non-monetary costs of training, arguing that training choices are a consequence of differences in costs of training. We use a ten percent sample of participants in educational programs, work related training and non-participants who entered the Norwegian vocational rehabilitation sector in the period from 1989 to 1993, a total of 6653 persons. We find that the background characteristics of persons investing in educational training differ along several dimensions compared both to persons attending work related training and to clients not participating in training at all.

Suggested Citation

  • Arild Aakvik & Egil Kjerstad, 2003. "Skill formation among vocational rehabilitation clients - public policy vs private incentives," Education Economics, Taylor & Francis Journals, vol. 11(3), pages 219-237.
  • Handle: RePEc:taf:edecon:v:11:y:2003:i:3:p:219-237 DOI: 10.1080/0964529032000178428

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    References listed on IDEAS

    1. George Psacharopoulos, 1985. "Returns to Education: A Further International Update and Implications," Journal of Human Resources, University of Wisconsin Press, vol. 20(4), pages 583-604.
    2. Janankar, P.N. & Kapuscinski, C.A., 1991. "Aboriginal Employment and Unemployment : An Overview," CEPR Discussion Papers 255, Centre for Economic Policy Research, Research School of Economics, Australian National University.
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    5. Chapman, Bruce, 1997. "Conceptual Issues and the Australian Experience with Income Contingent Charges for Higher Education," Economic Journal, Royal Economic Society, vol. 107(442), pages 738-751, May.
    6. Weale, Martin, 1993. "A Critical Evaluation of Rate of Return Analysis," Economic Journal, Royal Economic Society, vol. 103(418), pages 729-737, May.
    7. Miller, Paul W & Mulvey, Charles & Martin, Nick, 1995. "What Do Twins Studies Reveal about the Economic Returns to Education? A Comparison of Australian and U.S. Findings," American Economic Review, American Economic Association, vol. 85(3), pages 586-599, June.
    8. Ashenfelter, Orley & Krueger, Alan B, 1994. "Estimates of the Economic Returns to Schooling from a New Sample of Twins," American Economic Review, American Economic Association, vol. 84(5), pages 1157-1173, December.
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    Cited by:

    1. McInerney, Melissa, 2010. "Privatizing public services and strategic behavior: The impact of incentives to reduce workers' compensation claim duration," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 777-789, October.

    More about this item


    public policy; private incentives; costs of training; educational training; work related training; vocational rehabilitation;

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • I10 - Health, Education, and Welfare - - Health - - - General


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