Income Effects from Labor Market Training Programs in Sweden During the 80’s and 90’s

Thomas Andrén () and Björn Anders Gustafsson ()
Additional contact information
Björn Anders Gustafsson: Göteborg University

No 603, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Swedish labor market programs appear large from an international perspective, yet their consequences are not fully investigated and understood. In this paper we estimate a switching regression model with training effect modeled as a random coefficient, partitioned in an observed and unobserved component. We investigate labor market training for three cohorts during the 80s and the beginning of the 90s on its effect on earnings. We separate the analysis between Swedish-born and foreign-born individuals to identify differences in their responses to training. The results indicate that there is positive sorting into training. We find that the proportion of trainees having positive rewards from training was not very different from the proportion having negative rewards. This means that the results do not support the view that from efficiency considerations, too few persons were enrolled in labor market training during this period. Differences in results across cohorts can be interpreted as being caused by rapid changes in the labor market. Further, consistent with results from several previous studies we find that being young often means no positive pay-off from training, and the same is found for persons with only primary education. In conflict with what earlier studies have shown, we found that males have a better pay-off from training than females. Rewards from training were higher for foreign-born than for natives and rewards among the former vary by place of birth.

Keywords: random coefficient model; labor market training; non-experimental estimator; positive sorting; unobserved heterogeneity to training reward (search for similar items in EconPapers)
JEL-codes: J31 J38 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2002-10
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published - published in: International Journal of Manpower, 2004, 25 (8), 688-713

Downloads: (external link)
https://docs.iza.org/dp603.pdf (application/pdf)

Related works:
Working Paper: Income Effects from Labor Market Training Programs in Sweden During the 80’s and 90’s (2002)
Working Paper: Income effects from labor market training programs in Sweden during the 80's and 90's (2002)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp603

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().