An Evaluation of Public Sector Sponsored Continuous Vocational Training Programs in East Germany

This study analyses the effect of public sector sponsored continuous vocational training and retraining in East Germany after unification with West Germany in 1990. It presents estimates of the average gains from training participation in terms of earnings, employment probabilities and career prospects after the completion of training. The data is from the German Socio-Economic Panel (GSOEP, 1990-1994). The GSOEP allows to observe individual behaviour on a monthly, respectively yearly, basis. The results suggest that despite public expenditures of more than DM 25 bn (1991 to 1993), there are no positive effects in the first year after training, but that participants expect positive effects over a longer time horizon. The latter however is beyond the sampling period.