Working for 200 Euro? The Unintended Effects of Traineeship Reform on Youth Labor Market Outcomes

Tomić, Iva; Žilić, Ivan

doi:10.1111/labr.12176

Cited by 4 publications

(5 citation statements)

References 36 publications

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“… 6 Following the first version of this paper (Bratti et al 2018 ), other studies have evaluated programmes targeting youths and financed with EU funds. For example, Tomić and Zilic ( 2020 ) study the impact of an ALMP reform that was implemented in Croatia in 2012, before the YG 2014–2020, to improve the labour market entry of youths without relevant work experience. The programme was initially financed by the Croatian government but later was supported by the YG scheme.…”

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confidence: 99%

Vocational training for unemployed youth in Latvia

et al. 2021

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We analyze the effectiveness of a vocational training (VT) programme targeting unemployed youth in Latvia, contributing to the scant literature on active labour market policies in transition countries. The programme we analyse is part of the Youth Guarantee scheme (2014–2020), the largest action launched by the European Union to combat youth unemployment after the 2008 financial crisis. Although the programme was targeted to youths aged between 15 and 29, priority was given to those younger than 25 years of age. We exploit this eligibility rule in a fuzzy regression discontinuity design framework to estimate the impact of VT participation on the probability of being employed and gross monthly labour income at given dates after the training. Using rich administrative data, we find that the age priority rule increased programme participation for the youngest group by about 10 percentage points. However, participation in the programme did not lead to statistically significant positive effects in labour market outcomes. We argue that this result could be due to some specific characteristics of the programme, namely the voucher system (potentially inducing lock-in effects) and the type of training (classroom instead of on-the-job training). Moreover, the programme was targeted at ex-ante low-employable individuals (e.g. without vocational qualifications), a fact that is confirmed by our analysis of the characteristics of the population of compliers with the age priority rule.

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confidence: 99%

Vocational training for unemployed youth in Latvia

et al. 2021

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“…Therefore, using repeated observations on treated individuals we arguably ameliorate concerns for selection into the grant, estimating the effect of receiving a 10 We also exclude unemployment episodes finishing in vocational education without employment as this is a one-year ALMP (in total 82,473 episodes). For more details see Tomić and Zilic (2020). 11 Note that this only changes the composition of the control group; we also present results using the full sample in the Appendix-conclusions are identical but greater in magnitude.…”

Section: Individual Unemployment Reentrymentioning

confidence: 77%

“…While the unfavorable external economic conditions contributed to Croatia's economic slowdown, the Great Recession exposed structural problems with the Croatian economy and labor market (Franičević, 2011;Nestić, 2015). To ameliorate these alarming unemployment trends, the Croatian government engaged in several ALMPs to tackle the unemployment concerns, notably vocational training for work without commencing employment (Tomić and Zilic, 2020), and among others, the support for unemployed individuals who wanted to start a business and get self-employed.…”

Section: Institutional Settingmentioning

confidence: 99%

“Fine...I’ll do it myself”: Lessons from self-employment grants in a long recession period

Srhoj

Žilić

2021

IZA Journal of Labor Policy

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This paper evaluates the effect of a self-employment grant scheme for unemployed individuals—designed to ease the first 12 months of business operation—on firm growth, survival, and labor market reintegration in Croatia in the 2010–2017 period. Grants offered a moderate amount of finances (up to 50% of average annual gross salary) and absorbed only 5% of funds allocated to active labor market policies (ALMPs), but accounted for 10% of new firms opened throughout the years. We contribute to the literature on self-employment grants with several novel findings. Exploiting the longitudinal structure of the unemployment episodes dataset, we find that individuals who finish their spell with a grant have a significantly lower probability of returning to unemployment. The policy is particularly effective for individuals who would have otherwise had labor market opportunities (men, more educated, prime-age workers, previously employed), individuals who became unemployed after inactivity and lost their job due to a firm's closure—which demonstrates that self-employment subsidies can be effective in ameliorating unemployment. However, the policy was not effective for longer unemployed individuals. At the firm level, we find descriptive evidence that limited liability firms opened via a grant have lower growth potential and worse survival profile, while unlimited liability firms—even though a sizable portion of them closes after a required 12-month grant period—have a more favorable survival profile. Finally, we also find that the effectiveness of these grants has increased throughout the years, indicating toward the direction of institutional learning.

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“…SeeTomić and Žilić (2018) for more details about this. For example, they report that the number of participants in the programme increased from below 500 in 2010 to 33,366 in 2016 12.…”

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confidence: 99%