Regional Discontinuities and the Effectiveness of Further Training Subsidies for Low-Skilled Employees

Abstract

The author analyzes the effects of further training subsidies for low-skilled employees on individual labor market outcomes in Germany. Using detailed administrative data, the author exploits cross-regional variation in the policy styles of local employment agencies to identify causal effects of program participation. Findings show that training subsidies significantly increase cumulative employment duration and earnings in the short run and middle run for compliers, that is, those workers who additionally participate due to a more generous policy style in their agency. These gains are particularly pronounced for certain subgroups, such as women. A rough cost-benefit analysis, however, suggests that the program overall is not beneficial for the public budget.

Employee Training and Firm Performance: Evidence from Esf Grant Applications

“…Note that, in contrast, the related literature on returns to training provided to unemployed individuals includes several experimental and quasi-experimental contributions(Card et al 2010) including, very recently, novel analyses using machine learning methods(Cockx et al 2020, Zimmert 2020. Another important related literature is about the (individual) wage (and employment) returns to training(Leuven & Oosterbeek 2008, Brunello et al 2012, Goerlitz & Tamm 2016, Dauth 2016). …”

Employment effects of language training for unemployed immigrants

“…After controlling for regional-and individual-level confounders, residual variation in language training intensity reflects the policy styles of job centers. Several studies have exploited regional variation in the policy styles of employment agencies and partly used an instrumental variable approach to analyze the effects of several labor market programs (Frölich and Lechner 2010;Lechner et al 2013;Markussen and Røed 2014;Boockmann et al 2014;Dean et al 2015;Caliendo et al 2017;Eppel 2017;Dauth 2020). Following this approach, I identify causal effects by addressing selection into the studied program based on unobservable characteristics.…”

Employee training and firm performance: Evidence from ESF grant applications

“…This may 2 Note that, in contrast, the related literature on returns to training provided to unemployed individuals includes several experimental and quasi-experimental contributions (Card et al 2010) including, very recently, novel analyses using machine learning methods (Cockx et al 2020, Zimmert 2020. Another important related literature is about the (individual) wage (and employment) returns to training (Leuven & Oosterbeek 2008, Brunello et al 2012, Goerlitz & Tamm 2016, Dauth 2016. correspond to a positive form of training 'lock-in', in contrast to the case of training programmes for the unemployed, which may reduce transitions to employment at least in the short-run.…”