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Direct and indirect effects of training vouchers for the unemployed

Listed author(s):
  • Huber, Martin

    ()

  • Lechner, Michael

    ()

  • Strittmatter, Anthony

    ()

This paper evaluates the effect of a voucher award system for assignment into vocational training on the employment outcomes of unemployed voucher recipients in Germany, along with the causal mechanisms through which it operates. It assesses the direct effect of voucher assignment net of actual redemption, which may be driven by preference shaping/learning about (possibilities of) human capital investments or simply by costs of information gathering. Using a mediation analysis framework based on sequential conditional independence assumptions and semiparametric matching estimators, our results suggest that the negative short term and positive long term employment effects of voucher award are mainly driven by actual training participation. However, also the direct effect of just obtaining the voucher is negative in the short run. This points to potential efficiency losses of voucher award systems if individuals decide not to redeem, as employment chances are lower than under non-award in the short run and under redemption in the long run, making non-redemption the least attractive option.

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File URL: http://ux-tauri.unisg.ch/RePEc/usg/econwp/EWP-1514.pdf
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Paper provided by University of St. Gallen, School of Economics and Political Science in its series Economics Working Paper Series with number 1514.

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Length: 40 pages
Date of creation: Jun 2015
Handle: RePEc:usg:econwp:2015:14
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  1. Lechner, Michael & Wunsch, Conny, 2013. "Sensitivity of matching-based program evaluations to the availability of control variables," Labour Economics, Elsevier, vol. 21(C), pages 111-121.
  2. Michael Lechner & Ruth Miquel & Conny Wunsch, 2011. "Long‐Run Effects Of Public Sector Sponsored Training In West Germany," Journal of the European Economic Association, European Economic Association, vol. 9(4), pages 742-784, 08.
  3. Martin Biewen & Bernd Fitzenberger & Aderonke Osikominu & Marie Paul, 2014. "The Effectiveness of Public-Sponsored Training Revisited: The Importance of Data and Methodological Choices," Journal of Labor Economics, University of Chicago Press, vol. 32(4), pages 837-897.
  4. Martin Huber, 2014. "Identifying Causal Mechanisms (Primarily) Based On Inverse Probability Weighting," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 29(6), pages 920-943, 09.
  5. Flores, Carlos A. & Flores-Lagunes, Alfonso, 2009. "Identification and Estimation of Causal Mechanisms and Net Effects of a Treatment under Unconfoundedness," IZA Discussion Papers 4237, Institute for the Study of Labor (IZA).
  6. Doerr, Annabelle & Strittmatter, Anthony, 2014. "Assignment Mechanisms, Selection Criteria, and the Effectiveness of Training Programs," Economics Working Paper Series 1421, University of St. Gallen, School of Economics and Political Science, revised May 2017.
  7. Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity Score-Matching Methods For Nonexperimental Causal Studies," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 151-161, February.
  8. Abadie, Alberto & Imbens, Guido W., 2011. "Bias-Corrected Matching Estimators for Average Treatment Effects," Journal of Business & Economic Statistics, American Statistical Association, vol. 29(1), pages 1-11.
  9. Michael Lechner & Ruth Miquel, 2010. "Identification of the effects of dynamic treatments by sequential conditional independence assumptions," Empirical Economics, Springer, vol. 39(1), pages 111-137, August.
  10. James Heckman & Rodrigo Pinto & Peter Savelyev, 2013. "Understanding the Mechanisms through Which an Influential Early Childhood Program Boosted Adult Outcomes," American Economic Review, American Economic Association, vol. 103(6), pages 2052-2086, October.
  11. Annabelle Doerr & Bernd Fitzenberger & Thomas Kruppe & Marie Paul & Anthony Strittmatter, 2017. "Employment and Earnings Effects of Awarding Training Vouchers in Germany," ILR Review, Cornell University, ILR School, vol. 70(3), pages 767-812, May.
  12. repec:tpr:restat:v:99:y:2017:i:1:p:180-183 is not listed on IDEAS
  13. Alberto Abadie & Guido W. Imbens, 2008. "On the Failure of the Bootstrap for Matching Estimators," Econometrica, Econometric Society, vol. 76(6), pages 1537-1557, November.
  14. Gerfin, Michael & Lechner, Michael, 2001. "A Microeconometric Evaluation of Active Labour Market Policy in Switzerland," CEPR Discussion Papers 2993, C.E.P.R. Discussion Papers.
  15. Heinrich, Carolyn J. & Mueser, Peter R. & Troske, Kenneth & Jeon, Kyung-Seong & Kahvecioglu, Daver C., 2009. "New Estimates of Public Employment and Training Program Net Impacts: A Nonexperimental Evaluation of the Workforce Investment Act Program," IZA Discussion Papers 4569, Institute for the Study of Labor (IZA).
  16. Lechner, Michael, 2009. "Sequential Causal Models for the Evaluation of Labor Market Programs," Journal of Business & Economic Statistics, American Statistical Association, vol. 27, pages 71-83.
  17. Ulf Rinne & Arne Uhlendorff & Zhong Zhao, 2013. "Vouchers and caseworkers in training programs for the unemployed," Empirical Economics, Springer, vol. 45(3), pages 1089-1127, December.
  18. Huber, Martin & Lechner, Michael & Wunsch, Conny, 2013. "The performance of estimators based on the propensity score," Journal of Econometrics, Elsevier, vol. 175(1), pages 1-21.
  19. James J. Heckman & Hidehiko Ichimura & Petra Todd, 1998. "Matching As An Econometric Evaluation Estimator," Review of Economic Studies, Oxford University Press, vol. 65(2), pages 261-294.
  20. Joffe, Marshall M. & Ten Have, Thomas R. & Feldman, Harold I. & Kimmel, Stephen E., 2004. "Model Selection, Confounder Control, and Marginal Structural Models: Review and New Applications," The American Statistician, American Statistical Association, vol. 58, pages 272-279, November.
  21. Martin Huber & Michael Lechner & Giovanni Mellace, 2017. "Why Do Tougher Caseworkers Increase Employment? The Role of Program Assignment as a Causal Mechanism," The Review of Economics and Statistics, MIT Press, vol. 99(1), pages 180-183, March.
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