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Estimating the Effect of Training on Unemployment Duration in West Germany - A Discrete Hazard-Rate Model with Instrumental Variables

  • R. Hujer

    (Johann Wolfgang Goethe-University, Frankfurt/Main)

  • K.-O. Maurer

    (Johann Wolfgang Goethe-University, Frankfurt/Main)

  • M. Wellner

    (Johann Wolfgang Goethe-University, Frankfurt/Main)

Registered author(s):

    We estimate a semiparametric single-risk discrete-time duration model to assess the effect of vocational training on the duration of unemployment spells. The data basis used in this study is the German Socio-Economic- Panel (GSOEP) for West Germany for the period from 1986 to 1994. To take into account a possible selection bias ac-tual participation in vocational training is instrumented using estimates of a random-effects probit model for the participation in qualification measures. Our main results show that training does have a significant short term effect of reducing unemploy-ment duration but that this effect does not persist in the long run.

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    Paper provided by EconWPA in its series Econometrics with number 9704001.

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    Length: 37 pages
    Date of creation: 29 Apr 1997
    Date of revision:
    Handle: RePEc:wpa:wuwpem:9704001
    Note: 37 pages, 5 figures, 4 tables
    Contact details of provider: Web page: http://128.118.178.162

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    1. Hsiao, C., 1992. "Logit and Probit Models," Papers 9210, Southern California - Department of Economics.
    2. R. Hujer & K.-O. Maurer & M. Wellner, 1997. "The Impact of Training on Unemployment Duration in West Germany -Combining a Discrete Hazard Rate Model with Matching Techniques-," Econometrics 9705001, EconWPA.
    3. Lancaster, Tony, 1979. "Econometric Methods for the Duration of Unemployment," Econometrica, Econometric Society, vol. 47(4), pages 939-56, July.
    4. Heckman, James J. & Robb, Richard Jr., 1985. "Alternative methods for evaluating the impact of interventions : An overview," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 239-267.
    5. Fitzenberger, Bernd & Prey, Hedwig, 1996. "Training in East Germany: An evaluation of the effects on employment and wages," Discussion Papers 36, University of Konstanz, Center for International Labor Economics (CILE).
    6. Orley Ashenfelter & David Card, 1984. "Using the Longitudinal Structure of Earnings to Estimate the Effect of Training Programs," NBER Working Papers 1489, National Bureau of Economic Research, Inc.
    7. Lechner, Michael, 1996. "An Evaluation of Public Sector Sponsored Continuous Vocational Training Programs in East Germany," Discussion Papers 539, Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre.
    8. Michael LECHNER, 1999. "The Effects of Enterprise-Related Training in East Germany on Individual Employment and Earnings," Annales d'Economie et de Statistique, ENSAE, issue 55-56, pages 97-128.
    9. Heckman, James J. & Singer, Burton, 1984. "Econometric duration analysis," Journal of Econometrics, Elsevier, vol. 24(1-2), pages 63-132.
    10. Gritz, R. Mark, 1993. "The impact of training on the frequency and duration of employment," Journal of Econometrics, Elsevier, vol. 57(1-3), pages 21-51.
    11. Fitzenberger, Bernd & Prey, Hedwig, 1995. "Assessing the impact of training on employment: The case of East Germany," Discussion Papers 23, University of Konstanz, Center for International Labor Economics (CILE).
    12. Butler, J S & Moffitt, Robert, 1982. "A Computationally Efficient Quadrature Procedure for the One-Factor Multinomial Probit Model," Econometrica, Econometric Society, vol. 50(3), pages 761-64, May.
    13. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-82, July.
    14. Torelli, Nicola & Trivellato, Ugo, 1993. "Modelling inaccuracies in job-search duration data," Journal of Econometrics, Elsevier, vol. 59(1-2), pages 187-211, September.
    15. White, Halbert, 1982. "Maximum Likelihood Estimation of Misspecified Models," Econometrica, Econometric Society, vol. 50(1), pages 1-25, January.
    16. Narendranathan, W & Stewart, Mark B, 1993. "How Does the Benefit Effect Vary as Unemployment Spells Lengthen?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 8(4), pages 361-81, Oct.-Dec..
    17. James J. Heckman, 1989. "Choosing Among Alternative Nonexperimental Methods for Estimating the Impact of Social Programs: The Case of Manpower Training," NBER Working Papers 2861, National Bureau of Economic Research, Inc.
    18. Elbers, Chris & Ridder, Geert, 1982. "True and Spurious Duration Dependence: The Identifiability of the Proportional Hazard Model," Review of Economic Studies, Wiley Blackwell, vol. 49(3), pages 403-09, July.
    19. James J. Heckman & Jeffrey A. Smith, 1995. "Assessing the Case for Social Experiments," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 85-110, Spring.
    20. Lechner, Michael, 1995. "Effects of continuous off-the-job training in East Germany after unification," ZEW Discussion Papers 95-27, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    21. Ham, John C & LaLonde, Robert J, 1996. "The Effect of Sample Selection and Initial Conditions in Duration Models: Evidence from Experimental Data on Training," Econometrica, Econometric Society, vol. 64(1), pages 175-205, January.
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