Effectiveness of sequences of classroom training for welfare recipients: what works best in West Germany?
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... von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract Sequences of active labour market programmes (ALMPs) may be part of an intensified activation strategy targeting hard-to-place individuals who may be long-term unemployed and who may encounter extreme difficulty in finding jobs. Such sequences are very common among welfare recipients in Germany, but most studies only evaluate either single ALMPs or unemployed individuals' first ALMP. Thus, I analyse the effects of different sequences of classroom training, unemployment benefit II (UB-II)-receipt and One-Euro-Jobs for West German men and women on different labour market outcomes. Using rich administrative data and a dynamic matching approach, I can control for dynamic selection problems that occur during a sequence. My results show that two classroom trainings are more effective than two periods of UB-II-receipt in helping welfare recipients find regular employment, especially among West German women. In some cases, avoiding participation in multiple programmes is preferable: participation in two classroom trainings has mostly no beneficial effects over participation in one classroom training in the second period only and participation in one classroom training followed by a One-Euro-Job has mostly no beneficial effects over participation in a One-Euro-Job in the second period only. Moreover, immediately assigning individuals to classroom training is more effective than waiting and assigning them to classroom training in the second period (the effects of timing) because of the positive effects on avoiding UB-II-receipt (work-test function). However, evidence for programme careers or stepwise integration is only observed for the sequence of two classroom trainings versus the sequence of two periods of UB-II-receipt. JEL classification: C13, I38, J68 inflow sample of all individuals receiving unemployment benefit II (UB II) without contributory employment for the period between October 1, 2005, and September 30, 2006. Because classroom training shows the second-highest inflow between 2005 and 2008 and because classroom training is a very common component of sequences of ALMPs (Dengler/Hohmeyer 2010), I consider possible sequences of classroom training. I analyse four effects on different labour market outcomes. First, I consider a basic comparison similar to the static evaluation of participation in a programme compared with non-participation: i.e., the sequence of two classroom trainings compared with the sequence of two periods of UB-II-receipt. Second, I analyse the effect of timing: i.e., the sequence of classroom training followed by UB-II-receipt compared with the sequence of UB-II-receipt followed by classroom training. Third, I consider the effect of participation in multiple programmes by comparing participation in two programmes with participation in only one programme: i.e., the sequence of two classroom trainings versus the sequence of UB-II-receipt followed by classroom training. Fourth, I analyse the effect of participation in multiple programmes for one very common sequence: the sequence of classroom training followed by a One-Euro-Job compared with the sequence of UB-II-receipt followed by a One-Euro-Job. My results reveal positive regular employment effects for individuals participating in classroom training in the first period if they participate in two classroom trainings compared with if they receive UB II for two periods, especially for West German women; however, I do not observe similar effects of such a sequence on avoiding UB-II-receipt. Regarding the effect of timing, the results show positive effects on avoiding UB-II-receipt. Thus, comparing the sequence of classroom training followed by UB-II-receipt with the sequence of UB-II-receipt followed by classroom training may test an individual's willingness to work. However, mostly no well-determined effects of participation in multiple programmes emerge. Only some positive effects on leaving UB-II-receipt arise for West German men participating in classroom training in the first period if they participate in the sequence of classroom training followed by a One-Euro-Job versus the sequence of UB-II-receipt followed by a One-Euro-Job. In general, evidence of programme careers of One-Euro-Jobs or stepwise integration with further vocational training is generally not observed (it is observed only for the sequence of two classroom trainings versus the sequence of two periods of UB-II-receipt). The paper is structured as follows: Section 2 describes the institutional framework of UB II and the considered programmes (i.e., classroom training and One-Euro-Jobs). Section 3 discusses the potential effects of the considered programmes and the considered sequences from a theoretical perspective. Section 4 summarises the literature on short-term training, on One-Euro-Jobs, on intensified activation packages and on sequences. Section 5 describes the implementation of the dynamic window approach and the dynamic matching approach. Section 6 introduces the data and identification and presents some descriptive statistics. Section 7 presents the results and section 8 concludes.