Abstract
This paper analyzes the impact of participation in job creation schemes (JCSs) on
job search outcomes in the context of the turbulent East German labor market in the aftermath of the German reunification. High job destruction characterized the economic environment. JCSs were heavily used in order to cushion this development. Using data from 1990-1999 and building upon the timing-of-events approach, we estimate multivariate discrete time duration models taking selection based on both observed and unobserved heterogeneity into account. Our results indicate that after initial negative effects during the
typical program duration of twelve months, probably driven by reduced job search effort during participation resulting in a rearrangement of the job queue, the impact on the job finding probability becomes insignificantly positive. Additional results, however, suggest that female and highly skilled participants leave unemployment quicker than other groups, which results in highly skilled women benefiting from participation. In general, we find no significant impact on post-unemployment employment stability. Our results are robust to allowing for random treatment effects. Also taking into account endogenous participation
in training programs, endogenous censoring, or multiple treatment effects do not change the results.
job search outcomes in the context of the turbulent East German labor market in the aftermath of the German reunification. High job destruction characterized the economic environment. JCSs were heavily used in order to cushion this development. Using data from 1990-1999 and building upon the timing-of-events approach, we estimate multivariate discrete time duration models taking selection based on both observed and unobserved heterogeneity into account. Our results indicate that after initial negative effects during the
typical program duration of twelve months, probably driven by reduced job search effort during participation resulting in a rearrangement of the job queue, the impact on the job finding probability becomes insignificantly positive. Additional results, however, suggest that female and highly skilled participants leave unemployment quicker than other groups, which results in highly skilled women benefiting from participation. In general, we find no significant impact on post-unemployment employment stability. Our results are robust to allowing for random treatment effects. Also taking into account endogenous participation
in training programs, endogenous censoring, or multiple treatment effects do not change the results.
| Original language | English |
|---|---|
| Number of pages | 20 |
| Journal | Labour Economics |
| Early online date | 3 Jun 2017 |
| DOIs | |
| Publication status | E-pub ahead of print - 3 Jun 2017 |
Research Groups and Themes
- ECON Applied Economics
Keywords
- Active labor market policy
- Structural change
- Transition economy
- East Germany
- Timing-of-events model
- Employment stability
- Unemployment duration
- Job creation schemes
Access to Document
- Full-text PDF (accepted author manuscript)
This is the accepted author manuscript (AAM). The final published version (version of record) is available online via Elsevier at https://doi.org/10.1016/j.labeco.2017.05.007 . Please refer to any applicable terms of use of the publisher.