Abstract
In a world increasingly globalized, multiple language skills can create more employment opportunities. Several countries include language training programs in active labor market programs for the unemployed. We analyze the effects of a language training program on the re-employment probability and hourly wages simultaneously, using high-quality administrative data from Luxembourg. We address selection into training with an unconfoundedness assumption and account for the complication that wages are “truncated” by unemployment by adopting a principal stratification framework. Estimation is undertaken with a mixture model likelihood-based approach. To improve inference, we use the individual’s hours worked as a secondary outcome and a stochastic dominance assumption. These two features considerably ameliorate the multimodality problem commonly encountered in mixture models. We also conduct a sensitivity analysis to assess the unconfoundedness assumption. Our results suggest a positive effect (of up to 12.7 percent) of the language training programs on the re-employment probability, but no effects on wages for those who are observed employed regardless of training participation.
Original language | English |
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Pages (from-to) | 1-44 |
Journal | Observational Studies |
Volume | 8 |
Issue number | 1 |
DOIs | |
Publication status | Published - 2022 |
Keywords
- Language Training Programs
- Policy Evaluation
- Principal Stratification
- Mixture Models
- Unconfoundedness
- Sensitivity Analysis