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Training in East Germany: An evaluation of the effects on employment and wages

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  • Fitzenberger, Bernd
  • Prey, Hedwig

Abstract

Support of training has been one of the most important instruments of active labor market policy in East Germany. This paper attempts an evaluation of the effects of training on future employment and future wages of trainees. The analysis distinguishes between measures within and outside of the firm of the employee and whether the trainee receives public income maintenance. After describing the labor market developments in East Germany, we illustrate the evaluation problem. Then, we estimate a simultaneous model for participation in training, employment, and wages. Taking account of selection effects before participation, our findings mostly suggest positive effects of training on employment or wages. In this respect, public income support is only successful when training takes place in external institutions but not in the firm where the person is employed.

Suggested Citation

  • 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).
    • Handle: RePEc:zbw:koncil:36
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    References listed on IDEAS

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    15. Eichler, Martin & Lechner, Michael, 1996. "Public Sector Sponsored Continuous Vocational Training in East Germany : Institutional Arrangements, Participants, and Results of Empirical Evaluations," Discussion Papers 549, Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre.
    16. Lechner, Michael, 1993. "The dynamics of self-employment in East Germany: an empirical analysis using panel data and allowing for state dependence and endogenous attrition," ZEW Discussion Papers 93-24, ZEW - Leibniz Centre for European Economic Research.
    17. 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).
    18. Flaig, Gebhard & Licht, Georg & Steiner, Viktor, 1993. "Testing for state dependence effects in a dynamic model of male unemployment behaviour," ZEW Discussion Papers 93-07, ZEW - Leibniz Centre for European Economic Research.
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    Cited by:

    1. 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, University Library of Munich, Germany.
    2. Eichler, Martin & Lechner, Michael, 1996. "Public Sector Sponsored Continuous Vocational Training in East Germany : Institutional Arrangements, Participants, and Results of Empirical Evaluations," Discussion Papers 549, Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre.
    3. Michael Lechner, 2000. "An Evaluation of Public-Sector-Sponsored Continuous Vocational Training Programs in East Germany," Journal of Human Resources, University of Wisconsin Press, vol. 35(2), pages 347-375.
    4. Kraus, Florian & Puhani, Patrick A. & Steiner, Viktor, 1997. "Employment Effects of Publicly Financed Training Programs The East German Experience," ZEW Discussion Papers 97-33, ZEW - Leibniz Centre for European Economic Research.
    5. Büttner, Thiess & Prey, Hedwig, 1997. "Does active labour market policy affect structural unemployment? An empirical investigation for West German regions, 1986 to 1993," Discussion Papers 42, University of Konstanz, Center for International Labor Economics (CILE).
    6. Hujer, Reinhard & Wellner, Marc, 2000. "The Effects of Public Sector Sponsored Training on Individual Employment Performance in East Germany," IZA Discussion Papers 141, Institute of Labor Economics (IZA).
    7. Michael Lechner, 1999. "Nonparametric bounds on employment and income effects of continuous vocational training in East Germany," Econometrics Journal, Royal Economic Society, vol. 2(1), pages 1-28.
    8. Prey, Hedwig, 1997. "Beschäftigungswirkungen von öffentlich geförderten Qualifizierungsmaßnahmen: Eine Paneluntersuchung für Westdeutschland," Discussion Papers 41, University of Konstanz, Center for International Labor Economics (CILE).
    9. R. Hujer & K.-O. Maurer & M. Wellner, 1997. "Estimating the Effect of Training on Unemployment Duration in West Germany - A Discrete Hazard-Rate Model with Instrumental Variables," Econometrics 9704001, University Library of Munich, Germany.
    10. Lechner, Michael, 1997. "Mikroökonometrische Evaluationsstudien : Anmerkungen zu Theorie und Praxis," Discussion Papers 555, Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre.

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    More about this item

    Keywords

    East Germany; evaluation of training; employment probability; wage; selection bias; labor market policy;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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