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Is Labour Market Training a Curse for the Unemployed? Evidence from a Social Experiment

Author

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  • Rosholm, Michael

    () (Aarhus University)

  • Skipper, Lars

    () (KORA - Danish Institute for Local and Regional Government Research)

Abstract

In this paper, we investigate the impact of classroom training programmes on individual unemployment rates in Denmark. In 1994 a social experiment was conducted, where unemployed applicants for labour market training were randomised into treatment and control groups. We formulate and estimate experimental impact estimators of the effect of treatment on the treated. The experimental data is polluted by the presence of no-shows and crossovers, which implies that traditional experimental estimators are biased. Therefore we formulate and estimate an endogenous variables model (using the randomisation indicator as a perfect exclusion restriction) and implement various matching estimators. We find – surprisingly – that classroom training significantly increases individual unemployment rates. We discuss some possible reasons for this surprising finding and some related policy issues.

Suggested Citation

  • Rosholm, Michael & Skipper, Lars, 2003. "Is Labour Market Training a Curse for the Unemployed? Evidence from a Social Experiment," IZA Discussion Papers 716, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp716
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    Cited by:

    1. Goulas, Eleftherios & Zervoyianni, Athina, 2018. "Active labour-market policies and output growth: Is there a causal relationship?," Economic Modelling, Elsevier, vol. 73(C), pages 1-14.
    2. McGuinness, Seamus & O'Connell, Philip J. & Kelly, Elish & Walsh, John R., 2011. "Activation in Ireland: An Evaluation of the National Employment Action Plan," Research Series, Economic and Social Research Institute (ESRI), number RS20.
    3. Florent Bedecarrats & Isabelle Guérin & François Roubaud, 2017. "L'étalon-or des évaluations randomisées : du discours de la méthode à l'économie politique," Working Papers ird-01445209, HAL.
    4. Rodokanakis Stavros, 2010. "The Dynamics of Regional Labour Markets and Training Programmes: Greek Evidence," European Spatial Research and Policy, Sciendo, vol. 17(1), pages 93-115, June.
    5. Michael Rosholm & Michael Svarer, 2004. "Estimating the Threat Effect of Active Labour Market Programmes," CAM Working Papers 2004-14, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
    6. Stavros Rodokanakis & Vasileios A. Vlachos, 2012. "Measuring the Unemployment Risk in Northern Greece from the LFS Micro-Data during the Period 1994-2006," Review of Economic Analysis, Rimini Centre for Economic Analysis, vol. 4(2), pages 224-246, December.
    7. Begoña Cueto & F. Mato, 2009. "A nonexperimental evaluation of training programmes: regional evidence for Spain," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 43(2), pages 415-433, June.
    8. Sarah Bernhard & Thomas Kruppe, 2012. "Effectiveness of Further Vocational Training in Germany – Empirical Findings for Persons Receiving Means-tested Unemployment Benefits," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 132(4), pages 501-526.
    9. Spermann, Alexander & Strotmann, Harald, 2005. "The Targeted Negative Income Tax (TNIT) in Germany: Evidence from a Quasi Experiment," ZEW Discussion Papers 05-68, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    10. Florent Bédécarrats & Isabelle Guérin & François Roubaud, 2015. "The gold standard for randomized evaluations: from discussion of method to political economy," Working Papers DT/2015/01, DIAL (Développement, Institutions et Mondialisation).
    11. 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.
    12. Jonas Maibom & Michael Rosholm & Michael Svarer, 2017. "Experimental Evidence on the Effects of Early Meetings and Activation," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(3), pages 541-570, July.
    13. Florent Bédécarrats & Isabelle Guérin & François Roubaud, 2015. "The gold standard for randomised evaluations: from discussion of method to political economics," Working Papers CEB 15-009, ULB -- Universite Libre de Bruxelles.
    14. Stavros Rodokanakis, 2010. "A Non-Experimental Evaluation of Unemployment Risk in Crete and the Ionian Islands: Regional Evidence for Greece," Acta Oeconomica Pragensia, University of Economics, Prague, vol. 2010(4), pages 44-63.
    15. Ott-Siim Toomet, 2005. "Does an Increase in Unemployment Income Lead to Longer Unemployment Spells? Evidence Using Danish Unemployment Assistance Data," Bank of Estonia Working Papers 2005-09, Bank of Estonia, revised 10 Oct 2005.
    16. Rodokanakis Stavros, 2009. "Comparing the Probability of Unemployment in Southern Greece Vis-À-Vis the Entire Country," Bulletin of Geography. Socio-economic Series, Sciendo, vol. 12(12), pages 17-43, January.
    17. Weber, Andrea & Hofer, Helmut, 2003. "Active Job-search Programs a Promising Tool? A Microeconometric Evaluation for Austria," Economics Series 131, Institute for Advanced Studies.

    More about this item

    Keywords

    experimental and nonexperimental estimators; classroom training; programme evaluation; social experiment;

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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