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Measuring the Effect of Subsidized Training Programs on Movements In andOut of Employment

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  • David Card
  • Daniel Sullivan

Abstract

We present a variety of alternative estimates of the effect of training on the probability of employment for adult male participants in the 1976 Comprehensive Employment and Training Act (CETA) program. Our results suggest that CETA participation increased the probability of employment in the three years after training by from 2 to 5 percentage points. Classroom training programs appear to have had significantly larger effects than on-the--job programs, although the estimated effects of both kinds of programs are consistently positive. We also find that movements in and out of employment for the trainees and a control group of nonparticipants are reasonably well described by a first-order Markov process, conditional on individual heterogeneity. In the context of this model, CETA participation appears to have increased both the probability of moving into employment, and the probability of continuing employment.

Suggested Citation

  • David Card & Daniel Sullivan, 1987. "Measuring the Effect of Subsidized Training Programs on Movements In andOut of Employment," NBER Working Papers 2173, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:2173
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    1. Gary Chamberlain, 1980. "Analysis of Covariance with Qualitative Data," Review of Economic Studies, Oxford University Press, vol. 47(1), pages 225-238.
    2. Ashenfelter, Orley & Card, David, 1985. "Using the Longitudinal Structure of Earnings to Estimate the Effect of Training Programs," The Review of Economics and Statistics, MIT Press, vol. 67(4), pages 648-660, November.
    3. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    4. LaLonde, Robert J, 1986. "Evaluating the Econometric Evaluations of Training Programs with Experimental Data," American Economic Review, American Economic Association, vol. 76(4), pages 604-620, September.
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