The Effects of On-the-job and Out-of-Employment Training Programmes on Labor Market Histories

We evaluate the impact of both on-the-job and out-of-employment training on the mobilities on the labour market. Using a French survey that provides work and training participation histories over a five-year period, we estimate a multi-spell multi-state transitions model with unobserved heterogeneity and treatment of initial conditions à la Wooldridge. This allows to take participation in programmes and their duration as endogenous. We allow training to have an impact up to 12 months after entry into a program, so that we study both current and past duration and state dependencies. We find that there are interdependencies between the two types of training. Participation in training has a lasting effect on the individual trajectories. Receiving on-the-job training increases the risk of separation, but both types of training increases the hazard rate to employment.