Training Duration and Post-training Outcomes: A Duration-Limited Competing Risks Model.

In some practical applications of transition models there is a natural limit on the duration of some state. An important example is the Youth Training Scheme (YTS), which is normally limited to two years. The authors modify the usual competing risks model for this case and derive a diagnostic test for heterogeneity. They apply the techniques to a model of the duration of YTS and find results that suggest an important qualitative effect of completed two-year YTS spells compared to spells completed under two years. Full-term YTS spells are found to be associated with significantly higher employment probabilities. Copyright 1996 by Royal Economic Society.