Estimating the Effect of Vocational Training on Unemployment Duration in West Germany: A Discrete Hazard Rate Model with Instrumental Variables

Reinhard Hujer, Kai-Oliver Maurer and Marc Wellner
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Marc Wellner: Uni Frankfurt/M

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 1999, vol. 218, issue 5+6, pages 619-646

Abstract: This paper is concerned with the effect of vocational training on individual unemployment duration in West Germany. The database used in this study is the German Socio-Economic Panel (GSOEP) for West Germany for the period from 1984 to 1994. The econometric model is a semi-parametric single risk discrete time duration model. To take into account a possible selection bias, an instrumental variable for actual participation in vocational training is used. This instrumental variable is the predicted participation propensity obtained by estimating a probit model for the participation in vocational training measures. The main results show that prior participation does have a significant effect on the reduction of unemployment duration in the short run. However, this effect does not persist in the long run.

Keywords: discrete hazard models; vocational training; selection bias; instrumental variables (search for similar items in EconPapers)
JEL-codes: C41 J20 J64 (search for similar items in EconPapers)
Date: 1999
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