EMPLOYMENT AND EARNINGS EFFECTS OF AWARDING TRAINING VOUCHERS IN GERMANY.

Participation in intensive training programs for the unemployed in Germany is allocated by awarding training vouchers. Using rich administrative data for all vouchers and actual program participation, the authors provide first estimates of the short-run and longrun employment and earnings effects of receiving a training voucher award based on a selection-on-observables assumption. The results imply that, after the award, voucher recipients experience long periods of lower labor market success compared to had they not received training vouchers. Small positive employment effects and no gains in earnings were observed four to seven years after the receipt of the voucher award. In addition, the findings suggest stronger positive effects both for all low-skilled individuals who were awarded and redeemed a voucher and for low-skilled and mediumskilled individuals who chose to take degree courses than for higher-skilled recipients. [ABSTRACT FROM AUTHOR]

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