1 / 29

Why is fighting youth unemployment so important ?

Educational and Labour Impacts of Active Employment Policies for Young People in Germany Steffen Künn ( IZA, Bonn) Co- Author : Marco Caliendo (University of Potsdam) Ricarda Schmidl (IZA, Bonn) June 27, 2013 Barcelona. Why is fighting youth unemployment so important ?.

knox
Download Presentation

Why is fighting youth unemployment so important ?

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Educational and Labour Impacts of Active Employment Policies for Young People in GermanySteffen Künn (IZA, Bonn)Co-Author: Marco Caliendo (University of Potsdam)Ricarda Schmidl (IZA, Bonn)June 27, 2013Barcelona

  2. Whyisfightingyouthunemployment so important? • The experienceofunemploymentatthebeginningofthe professional careerhas negative impactsatthe individual andsocietylevel. • Early unemploymenthas negative pathdependencies: • on employmentprobabilities (Ellwood, 1983; Gregg andTominey, 2005) • on wages (Burgess et al., 2003) • decreasesubjective well-beingandself-esteem (Goldsmith et al., 1997) • High socialcostsoffailedintegrationofyouths: • Directcosts: Transfer payments (e.g. benefits) • Indirectcosts: Increase in teenagecrime, drugabuse, etc.

  3. Isyouthunemployment a problem in Germany?

  4. Youth unemployment: An European comparison in % Note: Averages overtheperiod 2000-2012. Source: Eurostat. • More favorable situationforyouths in Germany: Theyhave a lower prob toenterunemploymentwhichismostlikely due to a smooth transitionfromschooltowork (attributabletothe dual apprenticeshipsystem).

  5. Long-term unemployment: An European comparison in % Note: Averages overtheperiod 2000-2012. Source: Eurostat. • However, thosewhoenterunemployment in Germany areat high risktoremainunemployedfor 12 monthsorlonger. • Youthswithstructuraldifficulties: Male, low/noschool/professional degree, migrationbackground.

  6. Activelabormarketpoliciestofightyouthunemployment in Germany

  7. Activelabormarketpolicy in Germany • Giventhecompositionoftheyouthunemployedworkforce in Germany, activelabormarketpolicies (ALMP) are an integral partoflabormarketintegrationofunemployedyouths • Wide rangeofprogramsthataredesignedtosupportunemployedyouthsat different barriers: • 1st barrier: Transition fromschooltoapprenticeshipsystem • Redoschooldegree, publicapprenticeship … • 2nd barrier: Integration in employment • Wage subsidies, qualification, jobsearchassistance… • High treatment intensity: During the last decade approx. 65% of all youths who entered unemployed also participated in ALMP

  8. Existingevidence on programeffectiveness • International evidence: • Training: Rather negative (Denmark, Sweden, UK) • Wage subsidies: Positive (Belgium, France, UK) • Job creationschemes: Negative (France, UK) • Surprisingly, so farnoevaluationexistsfor Germany!  Limiteddataavailability! • Statistical methodsrequirecertainnumberofobservations. • Survey data: Low numberofobservation, difficulttodisentanglesingleprogramtypes (self-reported, limited reliability). • This studyprovidesfirstquantativelong-term resultswithrespecttoprogrameffectivenessfor Germany. • Governmentprovidedaccessto administrative data!

  9. The settingoftheempiricalanalysis

  10. Data • Toovercomedatalimitations in thefieldofprogramevaluation, wecreated a newdataset: theIZA Evaluation Dataset • Administrative data: Information fromtheSocial Security System andthe Federal Employment Agency (N=900,000) • Survey information: Telephoneinterviews (N=18,000) • Mergeddata: Combinationofadminandsurveydata (N=15,700) • Weuseonlythe administrative part in ordertohave: • sufficientnumberofobservations (subgroupofthelabormarket), • detailedinformation on participation in ALMP and LM outcomes. • Sample restriction: • Inflowsintounemployment in 2002 • Age restriction: < 25 yearsoldatentry in unemployment • N=51,019; Observation period: 6 years after entryintounemployment

  11. Programsunderscrutiny • JCS – Job creationschemes • Max. duration: 12 months (extensionpossible) • Main aim: Generateworkingexperience • VT – Vocationaltraining • Max. duration: 12 months (extensionpossible) • Main aim: Providing jobspecificskills • PT – Preparatorytraining • Max. duration: 12 months • Main aim: Integration in educationandvocationaltraining • WS – Wage subsidy • Max. duration: 12 months (50% subsidyto wage costs) • Main aim: Long-term integration in employment

  12. Doesprogramparticipationincreaseemployment/educationchances?

  13. Remarkswithrespecttotheempiricalstrategy • Comparisonofparticipantsand non-participants (otherunemployedyouthswithoutprogramparticipation) wrtintegration in: • unsubsidizedemploymentsubjectto SSC, • unsubsidizededucationor professional training. • Weuse a statisticalmatchingapproachtoaccountforselectionintotheprograms, i.e., participants will becomparedwith „comparable“ non-participantsonly. • Selectionbased on observedcharacteristicsonly! • Wetakethetimingofentryintounemploymentandprogramsintoaccount (seasonalityandunemploymentduration).

  14. Resultswrtemploymentoutcomes!

  15. Job creationschemes • Participationdoes NOT improvelabormarketprospectsofparticipantsduringtheobservationwindow!

  16. Vocationaltraining • Positive andstableeffectat 8% (East) to 11% (West) on average after initiallocking-in phase (approx. 12 months)!

  17. Wage subsidy • Strong positive effectat 18% (East) to 10% (West) on average after initiallocking-in phase (approx. 6-12 months)!

  18. Effectheterogeneity • Gender • Minor differences in programeffectiveness. • Pre-treatment schoollevel • Programsaremoresuccessfulforindividualswithhigherschoolinglevels! • Findingsarehighly relevant for German policymakersastheyhavetorethinkprogram design/allocation.

  19. Resultswrttoeducationoutcomes!

  20. Preparatorytraining • Positive andstableeffectofapprox. 10%, 12-48 months after programentry Indicatessuccessfulintegration in German apprenticeshipsystemwhichlasts on averagethreeyears.

  21. Effectheterogeneity • Gender • Nogenderdifferences. • Pre-treatment schoollevel • Again: Programsaremoresuccessfulforindividualswithhigherschoolinglevels! • Apparently, themostneedyare not properlytreated!

  22. Conclusion • Due toaccesstoreliableand informative data, thisstudydeliversthefirstempiricalevidence on theeffectivenessof ALMP forunemployedyouths in Germany. • Main result: • Programsincreaseemploymentandeducationprobability – exceptJCS. • Most interestingforpolicymakers: • Programsseemtobelesseffectiveforindividualswithlowschoolinglevels! • Regional-specificeffectiveness: WS mosteffective in East and VT in West Germany (due tothecompositionoftheunemployedworkforceandlocallabormarketcondition).

  23. Dr. Steffen Künn Research Associate IZA, P.O. Box 7240, 53072 Bonn, Germany Phone: +49 (0) 228 - 38 94 -533 Fax: +49 (0) 228 - 38 94 - 180 E-mail: kuenn@iza.org http://www.iza.org

  24. Appendix

  25. References • Presentationisbased on: • Caliendo, M., S. Künnand R. Schmidl (2011): Fighting Youth Unemployment: The Effects of Active Labor Market Policies. IZA Discussion Paper 6222, Bonn • Citedstudies: • Burgess, S., C. Propper, H. Rees and A. Shearer (2003): The Class of 1981: The Effectsof Early CareerUnemployment on Subsequent UnemploymentExperiences“. Labour Economics, 10(3), 291-309 • Ellwood, D.T. (1983): TeenageUnemployment: Permanent ScarsorTemporaryBlemishes?. NBER Working Paper 0399 • Goldsmith, A., J. Veumand W. Darity (1997): Unemployment, Joblessness, Psychological Well-BeingandSelf-Esteem: TheoryandEvidence. The Journal ofSocio-Economics, 26, 133-158 • Gregg, P. and E. Tominey (2005): The Wage Scarfrom Male Youth Unemployment. Labour Economics, 12(4), 487-509

  26. Descriptivestatistics Note: Measuredatentryintounemployment.

  27. Descriptivestatistics I Note: Measuredatentryintounemployment. • More male!

  28. DescriptivestatisticsII Note: Measuredatentryintounemployment. • East-West differenceswrtmigrationandeducationbackground!

  29. DescriptivestatisticsIII Note: Measuredatentryintounemployment. • Programdifferences: PT: youngerandwithouteducationalattainment. JCS: youthswithstructuralproblems.

More Related