Manpower Training Programmes and Employment Stability

Abstract

The authors evaluate Austrian labor-market policy, focusing on its possible effects upon recurrent unemployment. Without properly considering the selection processes for public training programs, misleading results emerge. Taking the participation decision into account in a bivariate probit setting, Austrian manpower training programs turn out to be a sort of 'catching up': disadvantaged and less motivated job-seekers are given priority in enrollment into training programs and participation in such courses improves employment stability significantly. Copyright 1996 by The London School of Economics and Political Science.

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