Peer Effects in Labor Market Training

Ulrike Unterhofer

Papers from arXiv.org

Abstract: This paper shows that group composition shapes the effectiveness of labor market training programs for jobseekers. Using rich administrative data from Germany and a novel measure of employability, I find that participants benefit from greater average exposure to highly employable peers through increased long-term employment and earnings. The effects vary significantly by own employability: jobseekers with a low employability experience larger long-term gains, whereas highly employable individuals benefit primarily in the short term through higher entry wages. An analysis of mechanisms suggests that within-group competition in job search attenuates part of the positive effects that operate through knowledge spillovers.

Date: 2022-11, Revised 2025-07
New Economics Papers: this item is included in nep-eur, nep-net and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2211.12366

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