Training and search during unemployment

Spinnewijn, Johannes

doi:10.1016/j.jpubeco.2013.01.002

Cited by 17 publications

(14 citation statements)

References 32 publications

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“…In contrast to this paper, which focuses on whether loss of skill affects the efficiency of aggregate labour market outcomes in the presence of risk neutral agents, the literature has focused in the first place on how policies providing insurance for riskaverse workers in an economy with incomplete markets are affected (see e.g. Pavoni (2009), Shimer andWerning (2006), Pavoni and Violante (2007), and Spinnewijn (2010)). Laureys (2014) analyses the implications of human capital depreciation during unemployment for optimal monetary policy.…”

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confidence: 99%

The Cost of Human Capital Depreciation During Unemployment

Laureys

2014

SSRN Journal

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Abstract. Skill erosion during unemployment was of particular concern as unemployment duration increased in the Great Recession. I argue that it generates an externality in job creation: firms ignore how their hiring decisions affect the unemployment pool's skill composition, and hence the expected output produced by new hires. As a consequence, job creation is too low from a social point of view. But the extent to which it is too low varies over the cycle. This is because the externality's magnitude, which depends on the impact of job creation on the pool's skill composition, reduces when the share of unemployed workers who already have eroded skills increases.

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confidence: 99%

The Cost of Human Capital Depreciation During Unemployment

Laureys

2014

SSRN Journal

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“…Moreover, it can only delay but no longer prevent the deterioration of the returns to search because it cannot stop reemployment wages from declining. In this case, the results obtained by Spinnewijn (2009) and Wunsch (2009b) suggest, that a combination of job search assistance and training that increases human capital and thus reemployment wages would be required to keep the returns to search sufficiently high.…”

Section: Resultsmentioning

confidence: 95%

“…The studies that are most closely related to our work are Spinnewijn (2009) and Wunsch (2009b) who analyze the optimal use of training that increases work-related skills in frameworks similar to Pavoni and Violante (2007), i.e. with human capital depreciation during unemployment.…”

Section: Introductionmentioning

confidence: 99%

Optimal Use of Labor Market Policies: The Role of Job Search Assistance

Wunsch

2013

Review of Economics and Statistics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This paper studies the role of job search assistance programs in optimal welfare-to-work programs. The analysis is based on a framework, that allows for endogenous choice of benefit types and levels, wage taxes or subsidies, and activation measures such as monitoring and job search assistance for each period of unemployment in a dynamic environment with negative duration dependence in the exit rates to employment and potential depreciation in reemployment wages. We show that the main role of job search assistance is to delay or prevent situations in which it is no longer optimal to incentivize the worker to provide positive search effort. It is used to restore or maintain some minimum exit rate to employment which increases with the cost-effectiveness of job search assistance. We also find that in line with existing policies, these programs should mainly be used at the beginning of unemployment and for short durations. However, contrary to existing schemes, they should be exclusively targeted at unemployed workers with low initial exit rates to employment. For all other workers, they should only be used if they fail to find a job within reasonable time despite high expected initial exit rates. Terms of use: Documents inJEL-Code: J64, J65, J68, D82, D86.Keywords: job search, optimal unemployment insurance, welfare-to-work policies, recursive contracts. The author is also affiliated with CESifo, Munich. I thank Gerard van den Berg, Monika Bütler, Michael Lechner, Alan Manning, Blaise Melly, Fabio Trojani, Stephan Wiehler as well as anonymous referees and various seminar participants for helpful discussions and comments. I also thank Michael Lechner for providing some of his GAUSS procedures, adapted versions of which I used for some of the estimations. The usual disclaimer applies. Conny Wunsch Swiss Institute for Empirical Economic

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“…From a theoretical perspective, the application of training policies should depend on the specific skills of a job-seeker and how their skills evolve or develop during the course of unemployment [2]. Participating in job-search training becomes more worthwhile following a period of unsuccessful searching, as it can help to prevent, or reverse, a decline in the effectiveness of the search.…”

Section: Discussion Of Pros and Consmentioning

confidence: 99%

The dynamics of training programs for the unemployed

Osikominu¹

2016

izawol

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in ProsFor improving the understanding of how training programs work, dynamic evaluation approaches that consider changes and impacts of training programs over time are useful. Job-search training is a low-cost intervention relative to other active labor market policies. Job-search training reduces the duration of unemployment for the individual. Occupational skills training has positive long-term effects on employment stability and earnings, which can persist over many years. eLeVATor PiTCHTime plays an important role in both the design and interpretation of evaluation studies of training programs. While the start and duration of a training program are closely linked to the evolution of job opportunities, the impact of training programs in the short and longer term changes over time. Neglecting these "dynamics" could lead to an unduly negative assessment of the effects of certain training schemes. Therefore, a better understanding of the dynamic relationship between different types of training and their respective labor market outcomes is essential for a better design and interpretation of evaluation studies. AuTHor's mAin messAGeOf the many "active" labor market policies designed to help unemployed people find work, occupational skills training ranks amongst the most expensive. However, although skills training is costly to implement and can prolong unemployment, the long-term improvements in employment stability and earnings can persist over many years. In contrast, job-search-oriented training is a relatively low-cost intervention and helps to identify suitable employment opportunities for individuals more quickly. Policymakers should be aware that while job-search training is the best option to activate job-seekers in the short term, investment in occupational skills training is more effective for addressing individual welfare issues and structural skills mismatch in the labor market in the long term.

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Training and search during unemployment

Cited by 17 publications

References 32 publications

The Cost of Human Capital Depreciation During Unemployment

The Cost of Human Capital Depreciation During Unemployment

Optimal Use of Labor Market Policies: The Role of Job Search Assistance

The dynamics of training programs for the unemployed

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