infonet-economy

We analyse the effects of government-sponsored training for the unemployed conducted during East German transition. For the microeconometric analysis, we use a new, large and informative administrative database that allows us to use matching methods to address potential selection bias, to study different types of programmes, and to observe labour market outcomes over 8 years. We find strong evidence that, on average, the training programmes under investigation increase long-term employ­ment pros­pects and earnings. However, as an important exception, the longer training pro­grammes are not helpful for their male participants. At least part of the explanation for this negative result is that caseworkers severely misjudged the structure of the future demand for skills.