The effect of subsidizing continuous training investments — Evidence from German establishment data

Abstract

This paper evaluates the impact of a training voucher program on establishments' investments in further training. The voucher program that was implemented in the German federal state of North Rhine-Westphalia increased training incentives for employees in small and medium-sized establishments by reducing training costs by 50%. The estimation is based on a quasi-experimental research design exploiting variation across time, regions and establishment size. Using establishment data, I find that the share of establishments that invest in training increased by 4–6 percentage points. Training intensity and the educational structure of participants remained unaffected among those establishments investing in training.