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Direct and indirect effects of training vouchers for the unemployed

Author

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  • Huber, Martin
  • Lechner, Michael
  • Strittmatter, Anthony
Abstract
This paper evaluates the effect of a voucher award system for assignment into vocational training on the employment outcomes of unemployed voucher recipients in Germany, along with the causal mechanisms through which it operates. It assesses the direct effect of voucher assignment net of actual redemption, which may be driven by preference shaping/learning about (possibilities of) human capital investments or simply by costs of information gathering. Using a mediation analysis framework based on sequential conditional independence assumptions and semiparametric matching estimators, our results suggest that the negative short term and positive long term employment effects of voucher award are mainly driven by actual training participation. However, also the direct effect of just obtaining the voucher is negative in the short run. This points to potential efficiency losses of voucher award systems if individuals decide not to redeem, as employment chances are lower than under non-award in the short run and under redemption in the long run, making non-redemption the least attractive option.

Suggested Citation

  • Huber, Martin & Lechner, Michael & Strittmatter, Anthony, 2015. "Direct and indirect effects of training vouchers for the unemployed," FSES Working Papers 456, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.
    • Handle: RePEc:fri:fribow:fribow00456
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    References listed on IDEAS

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    1. Lechner, Michael & Wunsch, Conny, 2013. "Sensitivity of matching-based program evaluations to the availability of control variables," Labour Economics, Elsevier, vol. 21(C), pages 111-121.
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    17. Huber, Martin & Lechner, Michael & Wunsch, Conny, 2013. "The performance of estimators based on the propensity score," Journal of Econometrics, Elsevier, vol. 175(1), pages 1-21.
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    20. Martin Huber & Michael Lechner & Giovanni Mellace, 2017. "Why Do Tougher Caseworkers Increase Employment? The Role of Program Assignment as a Causal Mechanism," The Review of Economics and Statistics, MIT Press, vol. 99(1), pages 180-183, March.
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    Cited by:

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    2. Doerr Annabelle & Strittmatter Anthony, 2021. "Identifying Causal Channels of Policy Reforms with Multiple Treatments and Different Types of Selection," Journal of Econometric Methods, De Gruyter, vol. 10(1), pages 67-88, January.
    3. Doerr, Annabelle, 2022. "Vocational training for female job returners - Effects on employment, earnings and job quality," Labour Economics, Elsevier, vol. 75(C).
    4. Karol Madoń & Iga Magda & Marta Palczyńska & Mateusz Smoter, 2024. "What Works for Whom? Youth Labour Market Policy in Poland," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 2, pages 1-34.
    5. Patrick Ring & Christoph A. Schütt & Dennis J. Snower, 2023. "Care and anger motives in social dilemmas," Theory and Decision, Springer, vol. 95(2), pages 273-308, August.
    6. Bhanot, Syon P. & Crost, Benjamin & Leight, Jessica & Mvukiyehe, Eric & Yedgenov, Bauyrzhan, 2021. "Can community service grants foster social and economic integration for youth? A randomized trial in Kazakhstan," Journal of Development Economics, Elsevier, vol. 153(C).
    7. Marco Doretti & Martina Raggi & Elena Stanghellini, 2022. "Exact parametric causal mediation analysis for a binary outcome with a binary mediator," Statistical Methods & Applications, Springer;Società Italiana di Statistica, vol. 31(1), pages 87-108, March.
    8. Matthew Blackwell & Anton Strezhnev, 2022. "Telescope matching for reducing model dependence in the estimation of the effects of time‐varying treatments: An application to negative advertising," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 185(1), pages 377-399, January.
    9. Helmut Farbmacher & Martin Huber & Lukáš Lafférs & Henrika Langen & Martin Spindler, 2022. "Causal mediation analysis with double machine learning [Mediation analysis via potential outcomes models]," The Econometrics Journal, Royal Economic Society, vol. 25(2), pages 277-300.
    10. Junquera, Álvaro F., 2024. "More money, more effect? Employment effects of job search programs in Veneto," SocArXiv rjshu, Center for Open Science.
    11. Massimiliano Bratti & Corinna Ghirelli & Enkelejda Havari & Giulia Santangelo, 2022. "Vocational training for unemployed youth in Latvia," Journal of Population Economics, Springer;European Society for Population Economics, vol. 35(2), pages 677-717, April.
    12. Anthony Strittmatter, 2016. "What effect do vocational training vouchers have on the unemployed?," IZA World of Labor, Institute of Labor Economics (IZA), pages 316-316, November.
    13. Doerr, Annabelle, 2022. "Vocational Training for Female Job Returners - Effects on Employment, Earnings and Job Quality," Working papers 2022/02, Faculty of Business and Economics - University of Basel.
    14. Bratti, Massimiliano & Ghirelli, Corinna & Havari, Enkelejda & Santangelo, Giulia, 2018. "Vocational Training for Unemployed Youth in Latvia: Evidence from a Regression Discontinuity Design," IZA Discussion Papers 11870, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    mediation analysis; voucher award; training programmes; direct effects; indirect effects; causal mechanisms; causal channels; matching estimation;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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