Post-school human capital investments
Year: 2009
Type: dissertation
Abstract: Training and lifelong learning are considered to be one solution to the problems of high unemployment rates among low-skilled workers, skill shortages, skill-biased technological change, and a lower relative demand for low-skilled labor due to international outsourcing. This book is a contribution to the ongoing debate about these issues. It studies the effects of training and lifelong learning both in a developed country (Germany) and in a transition economy (Serbia). In the latter case, it contributes to the relatively scarce literature on the effect of human capital investments in countries passing through a transitional period. On the other hand, this book focuses on Germany, a developed and industrialized economy, where nonetheless the risk of unemployment is remarkably high among low-skilled and unskilled individuals, and the gap between skill-specific unemployment rates is relatively large by international standards. Do prime-age skilled unemployed benefit more from training? Chapter 2 addresses this question as the treatment effects of public training programs for the unemployed in Germany are studied. More specifically, the picture that has been sketched in previous studies is extended by estimating treatment effects for different sub-groups of the unemployed with respect to vocational education and age. Only little evidence is found supporting heterogeneous treatment effects; and the magnitude of the differences which are found is quite small. The results are thus conflicting with the strategy to increasingly provide training to individuals with better employment prospects, which has been implemented in Germany as a part of the reform of active labor market policy in 2003. Next to imposing more selective criteria on applicants and programs, training vouchers were introduced in 2003. Although it has been previously shown that the overall impact of the reform on the effectiveness of public training programs was positive, the question remains which features of the reform caused this increase, and to what particular extent. Chapter 3 isolates the effect induced by changes in the composition of program participants from the effect based on the introduction of vouchers. We find a slightly positive impact of the reform. The decomposition of this overall effect shows that the selection effect is – if at all – slightly negative. Furthermore, we find evidence that the voucher effect increased both the employment probability and earnings of the participants. Chapter 4 contributes to the still relatively scarce literature analyzing the effectiveness of active labor market policy in transition economies. More specifically, the causal impacts of participation in the “Beautiful Serbia” program are studied which provides training and temporary work in the construction sector. This evaluation deviates from routine program evaluation by considering subjective measures of individual well-being as possible outcomes. The results provide an example that the positive effects of a policy can appear stronger if it is judged by subjective well-being rather than by labor market effects. The program probably impacted on individual welfare through other channels than the immediate economic status, notably by strengthening self-confidence, job desire and social inclusion of the participants. The preceding chapters are complemented in Chapter 5 as training activities of employed individuals in Germany are studied. While the findings with respect to the wage effects of private-sector training are relatively unstable, there appear to be clearly positive effects on subsequent employment. These effects disappear after around 5 years, and seem to be solely based on whether or not an individual engaged in training at all. The respective duration which has been spent in training does not appear to matter in this context.
Author: Rinne, Ulf
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1729531738