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The Effectiveness of Public-Sponsored Training Revisited: The Importance of Data and Methodological Choices

University of Tübingen, IZA, DIW BerlinUniversity of Freiburg, ZEW, IZA, ROA, IFSUniversity of Hohenheim,CESifo, IZAUniversity of Duisburg-Essen, RGS Econ

This article revisits the effectiveness of public-sponsored training programs for Germany accounting for dynamic selection into heterogeneous programs. We carefully assess to what extent various aspects of our empirical strategy, such as conditioning flexibly on employment and benefit histories, the availability of rich data, handling of later program participations, and further methodological choices affect our estimates. Our results imply pronounced negative lock-in effects in the short run and positive medium-run effects on employment and earnings when job-seekers enroll after having been unemployed for some time. We find that data and specification issues can have a large effect.