Long-run effects of public sector sponsored training in West Germany

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"Between 1991 and 1997 West Germany spent on average about 3.6 BN Euro per year on public sector sponsored training programmes for the unemployed. We base our empirical analysis on a new administrative data base that plausibly allows for selectivity correction by microeconometric matching methods. We identify the effects of different types of training programmes over a horizon of more than seven years. Using bias corrected weighted multiple neighbours matching we find that all programmes have negative effects in the short run and positive effects over a horizon of about four years. However, for substantive training programmes with duration of about two years gains in employment probabilities of more than 10% points appear to be sustainable, but come at the price of large negative lock-in effects"--Forschungsinstitut zur Zukunft der Arbeit web site.