Effectiveness of sequences of classroom training for welfare recipients: what works best in West Germany?

Abstract

ABSTRACTSequences of active labour market programmes (ALMPs) may be part of an intensified activation strategy targeting hard-to-place unemployed individuals. Such sequences are very common among welfare recipients in Germany, but most studies only evaluate either single ALMPs or unemployed individuals’ first ALMP. I analyse the effects of different sequences of classroom training for West German men and women on different labour market outcomes. Using rich administrative data and a dynamic causal model, I can control for dynamic selection problems that occur during a sequence. The results show that two classroom trainings are more effective than two periods of welfare receipt in helping welfare recipients find regular employment, especially among West German women. Moreover, immediately assigning individuals to classroom training is more effective than waiting and assigning them to classroom training in the second period. However, in some cases, avoiding participation in multiple programmes is preferable.Abbreviations: ALMP, active labour market programme; CIA, Conditional Independence Assumption; CSR, Common Support Requirement; DATET, dynamic average treatment effect on the treated; IEB, Integrated Employment Biographies; IPW, inverse probability weighting; LHG, UBII-Receipt History (Leistungshistorik Grundsicherung); MSB, mean standardized absolute bias; SUTVA, Stable Unit Treatment Value Assumption; UBII, unemployment benefit II; UBI, unemployment benefit I; WDCIA, Weak Dynamic Conditional Independence Assumption