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Effects of continuous off-the-job training in East Germany after unification

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  • Lechner, Michael

Abstract

Retraining the labor force to match the demands of a modern economy is an important task during the transition process from a centrally planned to a market economy. This need is particular pressing in East Germany, because the transition process is much faster there than in the rest of Eastern Europe. Therefore, substantial resources are devoted to this purpose. This paper analyses the impact of continuous off-the-job training in East Germany from the point of view of the individuals who were in the labor force before German unification in 1990. It answers questions about the average gains from participating in a specific type of training. Typical outcomes considered to measure these gains are income, employment status, job security and expected career prospects. The methodology used for the empirical evaluation is the potential outcome approach to causality. This approach has received considerable attention in the statistical literature over the last 15 years and it has been recently rediscovered by the econometric literature as well. Here, it is adapted to allow for important permanent and transitory shocks that influence the decision to participate in the training as well as future labor market outcomes. The empirical results are based on the first five waves of the Socio-Economic Pariel (GSOEP)-East (1990-1994). This panel data set has the advantage that the fourth wave contains a special survey on continuous training and that it allows to keep track of individual behaviour on a monthly, respectively yearly, basis. The econometric analysis focuses on off-the-job training courses that began after unification. Although it is obviously too early to evaluate the long-run implications, the results suggest that at least in the short-run there are no positive effects.

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  • Lechner, Michael, 1995. "Effects of continuous off-the-job training in East Germany after unification," ZEW Discussion Papers 95-27, ZEW - Leibniz Centre for European Economic Research.
  • Handle: RePEc:zbw:zewdip:9527
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    3. Pfeiffer, Friedhelm & Winterhager, Henrik, 2006. "Vermittlungsgutscheine und Beauftragungen Dritter im Vergleich (Job placement vouchers and the contracting out of placement services compared)," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 39(3/4), pages 425-445.
    4. Alm, Bastian & Bade, Franz-Josef, 2010. "Beschäftigungseffekte der regionalen Investitionsförderung. Analyse der gewerblichen Subventionen der Bund-Länder- Gemeinschaftsaufgabe „Verbesserung der regionalen Wirtschaftsstruktur“ im Zeitraum 19," EconStor Preprints 103401, ZBW - Leibniz Information Centre for Economics.
    5. 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.
    6. 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.
    7. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
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    11. Prey, Hedwig & Fitzenberger, Bernd & Franz, Wolfgang, 1997. "Wirkungen von Maßnahmen staatlicher Arbeitsmarkt- und Beschäftigungspolitik," Discussion Papers 45, University of Konstanz, Center for International Labor Economics (CILE).
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