Scandinavian Working Papers in Economics

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

No 2014:3: The long-term earnings consequences of general vs. specific training of the unemployed

Anders Stenberg () and Olle Westerlund ()
Additional contact information
Anders Stenberg: Stockholm University, Postal: SE-106 91 Stockholm, Sweden
Olle Westerlund: Umeå University, Postal: SE-901 87 Umeå, Sweden

Abstract: Training programs for the unemployed typically involve teaching a specific skill to ease the transition into employment. However, in 1997, the Swedish unemployed could choose general/theoretical training through enrollment in one year of full-time studies at the upper secondary school level. This study provides an empirical assessment of the relative earnings impact of general vs. specific training 13 years post-enrollment. In the long term, general training may compensate for the short-term relative earnings loss by enhancing the ability to adapt to changes in demand for skills. The analyses are based on population register data 1990-2010 and an unusually rich set of control variables. The results indicate that both programs are associated with earnings increases. Our relative program estimates reveal a short-term advantage of specific training that converges within 5-7 years. With a longer perspective, there is considerable heterogeneity in the relative earnings estimates. For females with short educations, the earnings increases following general training substantially exceed those following specific training.

Keywords: Active labor market programs; adult education; vocational training; general training

JEL-codes: I21; J62; J68

43 pages, February 17, 2014

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