published in: Applied Economics Quarterly, 2003, 49 (1), 23-48
In this paper we estimate, for the 1989-93 period in Belgium, the effect of vocational
classroom training on the rate of transition from unemployment. We propose a “control
function” estimator accounting for variable treatment effects. In the absence of interaction
effects between explanatory variables this estimator identifies treatment effects free from
selection bias. A natural experiment induces exogenous sub-regional variation in the training
supply. This provides over-identifying restrictions that cannot be rejected. During
participation, the transition rate decreases by 23% to 30%. Afterwards it increases by 47% to
73%. Making training available for a broader population would, however, reduce the
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