Effects of Public Job Training Programmes on the Employment Outcome of Displaced Workers: Results of a Matching Analysis, a Fixed Effects Model and an Instrumental Variable Approach Using Korean Data

Abstract

This study employs the matching method, the fixed effects model and the instrumental variable (IV) approach to estimate the employment effect of training programmes on displaced workers in Korea. The results of the matching and logit analyses suggest a positive training effect on employment. However, the fixed effects model showed a substantial reduction in the estimated training effect and the IV approach showed no training effect. This provides clear evidence of positive selection into training. The results of the IV approach suggest that training favoured male and educated workers, whereas female, less educated and older workers were disadvantaged by training programmes. © 2012 Wiley Publishing Asia Pty Ltd.