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Swedish Labor Market Training and the Duration of Unemployment

Author

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  • Richardson, Katarina

    () (IFAU)

  • van den Berg, Gerard J.

    () (University of Bristol)

Abstract

The vocational employment training program is the most ambitious and expensive training program in Sweden and a cornerstone of labor market policy. We analyze causal effects on the individual transition rate from unemployment to employment by exploiting variation in the timing of treatment and outcome, dealing with selectivity on unobservables. We demonstrate the appropriateness of this approach in our context by studying the assignment. We also develop a model allowing for duration dependence and unobserved heterogeneity (leading to spurious duration dependence) in the treatment effect, and we prove non-parametric identification. The data cover the population and include multiple unemployment spells for many individuals. The results indicate a large significantly positive effect on exit to work shortly after exiting the program. The effect at the individual level diminishes after some weeks. When taking account of the time spent in the program, the effect on the mean unemployment duration is often close to zero.

Suggested Citation

  • Richardson, Katarina & van den Berg, Gerard J., 2006. "Swedish Labor Market Training and the Duration of Unemployment," IZA Discussion Papers 2314, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp2314
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    References listed on IDEAS

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    1. Jaap H. Abbring & Gerard J. van den Berg, 2004. "Analyzing the effect of dynamically assigned treatments using duration models, binary treatment models, and panel data models," Empirical Economics, Springer, vol. 29(1), pages 5-20, January.
    2. Carling, Kenneth & Edin, Per-Anders & Harkman, Anders & Holmlund, Bertil, 1996. "Unemployment duration, unemployment benefits, and labor market programs in Sweden," Journal of Public Economics, Elsevier, vol. 59(3), pages 313-334, March.
    3. Geert Ridder, 1990. "The Non-Parametric Identification of Generalized Accelerated Failure-Time Models," Review of Economic Studies, Oxford University Press, vol. 57(2), pages 167-181.
    4. Edin, P-A. & Holmlund, B., 1990. "Unemployment, Vacancies And Labour Market Programmes: Swedish Evidence," Papers 1990j, Uppsala - Working Paper Series.
    5. Regner, Hakan, 2002. "A nonexperimental evaluation of training programs for the unemployed in Sweden," Labour Economics, Elsevier, vol. 9(2), pages 187-206, April.
    6. Matz Dahlberg & Anders Forslund, 2005. "Direct Displacement Effects of Labour Market Programmes," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(3), pages 475-494, September.
    7. Van den Berg, Gerard J., 2001. "Duration models: specification, identification and multiple durations," Handbook of Econometrics,in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 55, pages 3381-3460 Elsevier.
    8. James J. Heckman & Christopher R. Taber, 1994. "Econometric Mixture Models and More General Models for Unobservables in Duration Analysis," NBER Technical Working Papers 0157, National Bureau of Economic Research, Inc.
    9. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier.
    10. Brännäs, Kurt, 2000. "Estimation in a Duration Model for Evaluating Educational Programs," IZA Discussion Papers 103, Institute for the Study of Labor (IZA).
    11. Jaap H. Abbring & Gerard J. van den Berg, 2003. "The Nonparametric Identification of Treatment Effects in Duration Models," Econometrica, Econometric Society, vol. 71(5), pages 1491-1517, September.
    12. Robert G. Fay, 1996. "Enhancing the Effectiveness of Active Labour Market Policies: Evidence from Programme Evaluations in OECD Countries," OECD Labour Market and Social Policy Occasional Papers 18, OECD Publishing.
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    Citations

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    Cited by:

    1. Michael Lechner & Conny Wunsch, 2009. "Are Training Programs More Effective When Unemployment Is High?," Journal of Labor Economics, University of Chicago Press, vol. 27(4), pages 653-692, October.
    2. 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.
    3. Reinhard Hujer & Stephan Thomsen & Christopher Zeiss, 2006. "The effects of vocational training programmes on the duration of unemployment in Eastern Germany," AStA Advances in Statistical Analysis, Springer;German Statistical Society, vol. 90(2), pages 299-321, June.
    4. Vincent Touzé, 2008. "Marché du travail et emploi des seniors en Suède," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(2), pages 55-85.
    5. Annette Bergemann & Gerard J. Van Den Berg, 2008. "Active Labor Market Policy Effects for Women in Europe - A Survey," Annals of Economics and Statistics, GENES, issue 91-92, pages 385-408.
    6. Seamus McGuinness & Philip J. O'Connell & Elish Kelly, 2014. "The Impact of Training Programme Type and Duration on the Employment Chances of the Unemployed in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 45(3), pages 425-450.
    7. Terracol, Antoine, 2009. "Guaranteed minimum income and unemployment duration in France," Labour Economics, Elsevier, vol. 16(2), pages 171-182, April.

    More about this item

    Keywords

    duration dependence; treatment effect; selectivity bias; duration analysis; program evaluation; vocational training; identification;

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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