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Long-term consequences of an innovative redundancy - retraining project : the Austrian Steel Foundation

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  • Winter-Ebmer, Rudolf

Abstract

In the late 1980s, privatization and downsizing of nationalized steel mills, and related firms in the metal industry, have lead to large-scale redundancy plans. A special Steel Foundation was created as part of a social plan. This foundation acted like an independent training center, where displaced workers would spend relatively long training periods, obtaining personality and orientation training, as well as formal education. The last step of the integrative program was placement assistance, as well as assistance for creating one's own business. The foundation was financed by (higher) contributions from unemployment insurance funds, by the previous firms themselves, as well as by a collectively-bargained special tax on the remaining workers in the steel firms. Moreover, the trainees themselves would have to support the foundation by giving up the interest accruing to their redundancy payments. The report combined data from Austrian social security records, and from the Employment Service, to look at participation decisions, and at post-foundation economic performance. Then, as a control group, all displaced workers were taken into consideration, using instrumental variables to solve the selection problem. Results show considerable wage gains - even for a period of five years after leaving the Foundation - as well as improved employments prospects, and, finally, a cost-benefit analysis assesses the long-term success of the Foundation.

Suggested Citation

  • Winter-Ebmer, Rudolf, 2001. "Long-term consequences of an innovative redundancy - retraining project : the Austrian Steel Foundation," Social Protection Discussion Papers and Notes 23155, The World Bank.
  • Handle: RePEc:wbk:hdnspu:23155
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    Cited by:

    1. Baird, Matthew D. & Engberg, John & Gutierrez, Italo A., 2022. "RCT evidence on differential impact of US job training programmes by pre-training employment status," Labour Economics, Elsevier, vol. 75(C).
    2. Johannes Schweighofer, 2013. "Erzielen die Programme der aktiven Arbeitsmarktpolitik in Österreich ihre beabsichtigten Wirkungen?," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 120, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    3. Weber, Andrea & Hofer, Helmut, 2003. "Active Job-search Programs a Promising Tool? A Microeconometric Evaluation for Austria," Economics Series 131, Institute for Advanced Studies.

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    More about this item

    Keywords

    Health Monitoring&Evaluation; Labor Standards; Teaching and Learning; Tertiary Education; Environmental Economics&Policies;
    All these keywords.

    JEL classification:

    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy

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