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The Curse and Blessing of Training the Unemployed in a Changing Economy: The Case of East Germany After Unification

  • Lechner, Michael


    (University of St. Gallen)

  • Miquel, Ruth


    (University of St. Gallen)

  • Wunsch, Conny


    (University of Basel)

We analyse the effects of government-sponsored training for the unemployed conducted during East German transition. For the microeconometric analysis, we use a new, large and informative administrative database that allows us to use matching methods to reduce potential selection bias, to study different types of programmes, and to observe interesting labour market outcomes over 8 years. We find that, generally, all training programmes under investigation increase long-term employment prospects and earnings. However, as an important exception, the longer training programmes are on average not helpful for their male participants. At least part of the explanation for this negative result is that caseworkers severely misjudged the structure of the future demand for skills.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1684.

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Length: 51 pages
Date of creation: Jul 2005
Date of revision:
Publication status: published in: German Economic Review, 2007, 8 (4), 468-509
Handle: RePEc:iza:izadps:dp1684
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