DP4851 | Long run Effects of Public Sector Sponsored Training in West Germany

Publication Date

23/01/2005

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Abstract

Between 1991 and 1997 West Germany spent on average about 3.6bn euro per year on public sector sponsored training programmes for the unemployed. We base our empirical analysis on a new administrative database that plausibly allows for selectivity correction by microeconometric matching methods. We identify the effects of different types of training programmes over a horizon of more than seven years. Using bias corrected weighted multiple neighbours matching we find that all programmes have negative effects in the short run and positive effects over a horizon of about four years. For substantive training programmes with duration of about two years gains in employment probabilities of more than 10% points appear to be sustainable, but come at the price of large negative lock-in effects.