Swedish Labour Market Training and the Duration of Unemployment

Katarina Richardson and Gerard J. van den Berg

No 5895, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The vocational employment training program is the most ambitious and expensive training program in Sweden and a cornerstone of labor market policy. We analyze its causal effects on the individual transition rate from unemployment to employment by exploiting variation in the timing of treatment and outcome, dealing with selectivity on unobservables. We demonstrate the appropriateness of this approach in our context by studying the process leading to enrollment. We also develop a model allowing for duration dependence and unobserved heterogeneity (leading to spurious duration dependence) in the treatment effect itself, and we prove non-parametric identification. The data cover the population and include multiple unemployment spells for many individuals. The results indicate a large significantly positive effect on exit to work shortly after exiting the program. The effect at the individual level diminishes after some weeks. When taking account of the time spent in the program, the effect on the mean unemployment duration is often close to zero.

Keywords: duration analysis; duration dependence; hazard rate; identification; program evaluation; selectivity bias; transition to work; treatment effect; vocational training (search for similar items in EconPapers)
JEL-codes: C14 C41 J64 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec and nep-lab
Date: 2006-10
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Working Paper: Swedish Labor Market Training and the Duration of Unemployment (2006)
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