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Do Dropouts Benefit from Training Programs? Korean Evidence Employing Methods for Continuous Treatments

  • Choe, Chung

    ()

    (KU Leuven)

  • Flores-Lagunes, Alfonso

    ()

    (Syracuse University)

  • Lee, Sang-Jun

    ()

    (Korea Research Institute for Vocational Education and Training)

Failure of participants to complete training programs is pervasive in existing active labor market programs both in developed and developing countries. The proportion of dropouts in prototypical programs ranges from 10 to 50 percent of all participants. From a policy perspective, it is of interest to know if dropouts benefit from the time they spend in training since these programs require considerable resources. We shed light on this issue by estimating the average employment effects of different lengths of exposure to a program by dropouts in a Korean job training program. To do this, we employ parametric and semiparametric methods to estimate effects from continuous treatments using the generalized propensity score, under the assumption that selection into different lengths of exposure is based on a rich set of observed covariates. We find that participants who drop out later – thereby having longer exposures – exhibit higher employment probabilities one year after receiving training, and that marginal effects of additional exposure to training are initially fairly small, but increase sharply past a certain threshold of exposure. One implication of these results is that this and similar programs could benefit from providing incentives for participants to stay longer in the program.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6064.

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Length: 39 pages
Date of creation: Oct 2011
Date of revision:
Publication status: published in: Empirical Economics, 2014, [Online First]
Handle: RePEc:iza:izadps:dp6064
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  1. Núria Rodríguez-Planas & Benus Jacob, 2010. "Evaluating active labor market programs in Romania," Empirical Economics, Springer, vol. 38(1), pages 65-84, February.
  2. Newey, W.K., 1992. "Kernel Estimation of Partial Means and a General Variance Estimator," Working papers 93-3, Massachusetts Institute of Technology (MIT), Department of Economics.
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  11. James Heckman & Jeffrey Smith & Christopher Taber, 1998. "Accounting For Dropouts In Evaluations Of Social Programs," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 1-14, February.
  12. Jeffrey Smith & Petra Todd, 2003. "Does Matching Overcome Lalonde's Critique of Nonexperimental Estimators?," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20035, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
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  14. Carlos A. Flores & Oscar A. Mitnik, 2009. "Evaluating Nonexperimental Estimators for Multiple Treatments: Evidence from Experimental Data," Working Papers 2010-10, University of Miami, Department of Economics.
  15. Oscar A. Mitnik, 2007. "Intergenerational transmission of welfare dependency: The effects of length of exposure," Working Papers 0715, University of Miami, Department of Economics.
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