Scandinavian Working Papers in Economics

Working Paper Series,
IFAU - Institute for Evaluation of Labour Market and Education Policy

No 2002:8: The effect of vocational employment training on the individual transition rate from unemployment to work

Katarina Richardson () and Gerard J. van den Berg
Additional contact information
Katarina Richardson: IFAU - Insitute for Labour Market Policy Evaluation, Postal: Labour Market Policy Evaluation, P O Box 513, SE-751 20 Uppsala, Sweden
Gerard J. van den Berg: IFAU - Insitute for Labour Market Policy Evaluation, Postal: Labour Market Policy Evaluation, P O Box 513, SE-751 20 Uppsala, Sweden

Abstract: Amongst the active labor market policy programs for the unemployed in Sweden, the vocational employment training program is the most ambitious and expensive. We analyze its effect on the individual transition rate from unemployment to employment using a unique set of administrative data and a novel empirical approach that exploits variation in the timing of training and exit to work. The approach involves the estimation of duration models, and it allows us to quantify the individual effect of training in the presence of selectivity on unobservables. The data contain the full population of unemployed in the period 1993-2000 and include multiple unemployment spells for many individuals. The results indicate a significantly positive effect on exit to work after exiting the program. Its magnitude is very large shortly after leaving the course but diminishes afterwards. If we also take account of the time spent in the program then the net effect of participation in the program on the mean unemployment duration is close to zero.

Keywords: Vocational training; program evaluation; duration analysis; Swedish labor market; selectivity bias; treatment effect

JEL-codes: I28; J24; J64; J68

49 pages, April 15, 2002

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