Edited by Geraint Johnes and Jill Johnes
Chapter 3: The Economic Assessment of Training Schemes
Peter J. Dolton 1 Introduction Many countries1 at one time or another have introduced large-scale staterun training schemes in an attempt to alleviate youth unemployment problems. This chapter provides an economic assessment of these training schemes. The focus will be primarily on recent non-experimental international empirical econometric evidence, although the literature relating to experimental investigations is set in context in section 2. The main question which merits careful attention is, to what extent has such expenditure and government intervention been justiﬁed? Therefore there is an important need to evaluate the eﬀectiveness of these training programmes. To describe the basic issues, and introduce some notation in such an evaluation, a simple cost–beneﬁt model is discussed in section 3. The potential for evaluation of government-led training schemes has been enhanced in recent years with the collection of new cross-section and panel data relating to the labour market histories of young people. These data sets contain information about the jobs and training spells of the respondents, along with the unemployment experiences which may punctuate or even prevent the school-to-work transition. Details of participation in government-sponsored training schemes are known, permitting an evaluation of such schemes in helping the employment prospects of the individuals. However the availability of such detailed data presents us with a range of complex econometric modelling problems. The basic econometric framework for empirical questions is outlined in section 4 and elaborated in sections 5 and 6. Confounding factors are discussed in section 7 and an overview...
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