Training in the Great Recession - Evidence from an Individual Perspective

This paper analyses the effect of the economic crisis in 2008 and 2009 on individual training activities of different employee groups within establishments. We use a unique German linked employer-employee panel data set with detailed information on individual training history (WeLL-ADIAB). The so-called Great Recession can be seen as an exogenous, unexpected, and time-limited shock. Therefore, our quasi-experimental setting using Diff-in-Diff analyses reveals the causal impact of the crisis on the training participation and the number of training measures. We find a direct negative effect of the crisis on individual training activities in 2009 and 2010. The negative effect therefore sets in with a time lag and lasts until after the recession. Furthermore, the recession effect is stronger for employees in unskilled jobs than for employees in skilled jobs.