infonet-economy

We analyse the effectiveness of vocational training under two different assignment mechanisms. The direct assignment mechanism is characterised by the strong influence of caseworkers who can directly assign the unemployed to vocational training courses. Under the voucher assignment mechanism unemployed have more freedom to choose among different courses and training providers. Simultaneously with the assignment mechanism the selection criteria for potential training participants is changed. Unemployed awarded with a voucher are supposed to have higher employment probabilities after training than unemployed directly assigned to a training programme. We find that the voucher assignment system reduces the returns to vocational training over the short term. These negative effects fade and eventually, after seven years, become positive. The stricter selection rules appear to be poorly constructed and to reduce the effectiveness of training.