Business Intelligence

Training Or Search? Evidence And An Equilibrium Model

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Executive Summary

Training programs are a major tool of labor market policies in OECD countries. The author uses a unique panel data set on the labor market experience of individual German workers between 2000 and 2002 to estimate a dynamic model of search and training, which allows the author to quantify the impact of training programs and unemployment benefits on employment, unemployment, output, and the government expenditures. The model extends Ljungqvist and Sargent (JPE, 1998) by incorporating a training decision and a broader menu of unemployment benefits.

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