On Government‐Subsidized Training Programs for Older Workers

Abstract

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Regional Discontinuities and the Effectiveness of Further Training Subsidies for Low-Skilled Employees

“…The oldest age group of workers, 55 to 65 years, profits neither in terms of employment nor earnings. Thus, contrary to the findings of Dauth and Toomet (2016), who found that treatment postpones retirement for workers 55 years and older in SME, lowskilled workers above age 55 do not similarly profit from the program. This difference might be attributable to more firm-financed training for nontreated, low-skilled workers in larger firms-compared to SME-and thus a better comparison group.…”

“…Additionally, an economic stimulus package in January 2009 prompted the FEA, among others, to expand subsidized training for employees to give firms the incentive to train surplus workers instead of firing them (Möller 2010). A new law introduced a third target group for 2009 and 2010 to the existing target groups (workers in SME analyzed by Dauth and Toomet [2016] and low-skilled workers analyzed here). This new target group comprised workers who had not been funded by a public project for the previous four years and workers whose vocational degree was at least two years old ( § 421 t (4) Social Code III).…”

“…This difference might be attributable to more firm-financed training for non-treated, low-skilled workers in larger firms—compared to SME—and thus a better comparison group. Also, although Dauth and Toomet (2016) analyzed average treatment effects on the treated, compliers in that age group simply might not profit as much as always-takers. Overall, the marginal returns on employment and earnings seem to be particularly high at the beginning of the employment career due to a lower initial level of knowledge, lower opportunity costs, and better cognitive skills.…”

“…Schwerdt et al (2012) and Görlitz and Tamm (2016) did not find any effects of training subsidies on workers’ employment. Dauth and Toomet (2016) analyzed the impact of subsidized training on the employment duration of workers older than 45 years in small- and medium-sized enterprises (SME) in Germany. They found improved employment among participants of the subsidy program, which they attributed to the postponement of retirement due to increased job satisfaction.…”

Learning Better: Public Policy for Skills Development

“…Worse yet, a training voucher program in Chile actually lowered employment and earnings, although it did have a positive effect for women and mainly those with low levels of education. On the other hand, government-subsidized training for older workers in Germany improved their job stability (Hidalgo, Oosterbeek, and Webbink, 2014;Görlitz and Tamm, 2016;Kaplan et al, 2015;Dauth and Toomet, 2016). In the case of tax credit incentives offered to companies, the Chilean tax exemption program, Franquicia Tributaria, in most cases, does not improve wages and employment; only longer programs have slightly better results (Rodríguez and Urzúa, 2011).…”