1 LONG-RUN EFFECTS OF PUBLIC SECTOR SPONSORED TRAINING IN WEST GERMANY

We estimate the short-, medium- and long-run effects of different types of government-sponsored training in West Germany using particularly rich data which allows to control for selectivity by matching methods and to measure interesting outcome variable over eight years after programme start. We use distance weighted radius matching with a weighted-regression based bias removal procedure to increase precision and robustness of standard matching estimators. We find negative employment effects in the short-run for all programme types whose magnitude and length of occurrence is directly related to programme duration. In the longer run most types of training seem to increase employment rates by about 10%-points, and for both the shortest and the longest, most intensive programme type these positive effects seem to be sustainable over the eight-year observation period. For the latter programme, however, the positive effects are not (yet?) sufficient to compensate for the large initial lock-in effect