A double hurdle approach for company further training behaviour and an empirical test of this using data from the IAB establishment panel

"In this paper the further training behaviour of firms is explained using a double hurdle approach: the first hurdle is that the further training of employees is worthwhile for the firms in general, the second hurdle is that demand for further training arises. The empirical test is conducted using data from the IAB establishment panel: by combining the balanced panel for three waves into a cross-section it is possible to determine the effect of extending the observation period for the provision of further training (probit estimates) and the intensity of further training (quasi-likelihood estimates). The results confirm the double hurdle approach: variables for capital intensity, innovation orientation and the employee structure have a significant impact on whether further training is generally worthwhile for the firms, and investment in data processing and in the field of communication as well as organisational changes are significant motivations for providing further training." (Author's abstract, IAB-Doku) ((en)) Additional Information Kurzfassung (deutsch) Executive summary (English)Weiterbildungsverhalten - Determinanten, betriebliche Weiterbildung, Betrieb, Qualifikationsbedarf, Weiterbildungsbedarf, Bildungsertrag, Kapitalintensität, Innovation, Beschäftigtenstruktur, technischer Wandel, informationstechnische Bildung, organisatorischer Wandel, Bildungsinvestitionen, Bildungsökonomie, IAB-Betriebspanel

Can Training Programs or Rather Wage Subsidies Bring the Unemployed Back to Work? A Theoretical and Empirical Investigation for Germany

Our paper investigates the relative effects of wage subsidies and further vocational training on the subsequent employment prospects of previously unemployed program participants. First, we outline a theoretical approach based on a firm's hiring decision. For the relative effectiveness of both labor market programs the assumption concerning the formation of human capital is crucial and leads to competing hypotheses for the medium and long term. On the assumption that wage subsidies have no effect on human capital they improve individuals’ employment prospects less than training programs. Contrariwise, on the assumption that the formation of human capital on subsidized jobs equals that by formal training subsidization has the same employment effect as a training program. Second, we test the two hypotheses empirically, using a large administrative data set from Germany and statistical matching techniques. Our treatment groups consist of unemployed persons taking up subsidized employment or entering a further vocational training program, respectively, during March 2003. To exclude unemployment after program end we estimate the effect of keeping a subsidized job versus participating in training and taking up a job immediately afterwards. The results strongly support the latter of our competing hypotheses: Previously subsidized individuals and trained individuals who found a job immediately afterwards have the same employment rates. This leads to the conclusion that firms value training on a subsidized job as much as formal training programs.evaluation of active labor market programs, training programs, wage subsidies, propensity score matching

A Call for Comparative Research: Consequences of a Rising Income Inequality for State Activities

The aim of this discussion paper is not only to activate a debate over the interrelation between rising income inequality and economic policy measures but also to initiate comparative research in several European countries and North America. It discusses the consequences of a rising income inequality and its implications for state activities and economic policy. Using a simple model it becomes evident that an increasing income inequality leads to higher government spending, as a share of Gross Domestic Product, though the state does not take over more responsibilities. It also leads to a higher tax share though rates of taxation are not increased. This forces economic politicians to act. If they want to prevent an increase of these shares in order not to fall behind in the international competition, they must accept a rising public debt and/or must move away from socially accepted value judgments about "social standards", the degree of redistribution by taxes and/or an "adequate" supply of public goods. This might result in disenchantment with politics.economic policy, income inequality, macroeconomic key figures, state activities

Does Less Wage Compression Lead to Less Training in Germany? An Expansion of Acemoglu and Pischke's Model of Training in Imperfect Labor Markets

We expand Acemoglu and Pischke's seminal model of training in imperfect labor markets by including the system of collective wage bargaining and the components of firms' training costs. Thus we can adapt their model to institutional changes that occurred since the 1990s. The model and the empirical developments we present show that firms compensate lower returns of apprenticeship training by changing training procedures towards more training at the work place and thus by decreasing net training costs. Therefore, more decentralized wage bargaining does not result in a reduction of firms' supply of training positions

A call for comparative research: Consequences of a rising income inequality for state activities

The aim of this discussion paper is not only to activate a debate over the interrelation between rising income inequality and economic policy measures but also to initiate comparative research in several European countries and North America. It discusses the consequences of a rising income inequality and its implications for state activities and economic policy. Using a simple model it becomes evident that an increasing income inequality leads to higher government spending, as a share of Gross Domestic Product, though the state does not take over more responsibilities. It also leads to a higher tax share though rates of taxation are not increased. This forces economic politicians to act. If they want to prevent an increase of these shares in order not to fall behind in the international competition, they must accept a rising public debt and/or must move away from socially accepted value judgments about social standards, the degree of redistribution by taxes and/or an adequate supply of public goods. This might result in disenchantment with politics

Eurokrise: Sparpolitik zweitrangig für den Einbruch der Wirtschaftsleistung in Griechenland?

Renate Neubäumer, Universität Koblenz-Landau, analysiert die Nachfrageentwicklung in Griechenland zwischen 2000 und 2013 und kommt zu den Ansicht, dass für den Einbruch der Wirtschaftsleistung Griechenlands die Fiskalpolitik zweitrangig war. Entscheidender war der Rückgang anderer Nachfragekomponenten, vor allem des Wohnungsbaus, aber auch des privaten Konsums und weiterer Anlageinvestitionen, der sich bereits vor dem Beginn der Sparpolitik vollzogen hatte