E42

Do Dropouts Benefit from Training Programs? Korean Evidence Employing Methods for Continuous Treatments

Chung Choe 1, Alfonso Flores-Lagunes2, Sang-Jun Lee3
1CEPS/INSTEAD, Luxembourg, 2University of Florida, USA, 3Korea Research Institute for Vocational Education and Training, Republic of Korea

Failure of participants to complete training programs is pervasive in existent active labor market programs both in developed and developing countries. The proportion of dropouts in prototypical programs usually ranges from 10 to 50 percent of all participants. From a policy perspective, it is of interest to know if dropouts receive any benefit from the time they spend in the training program, especially since these programs consume considerable resources. We shed light on the issue by estimating the average employment effects of different lengths of exposure to a program by dropouts in a Korean job training program. To do this, we employ recently developed parametric and semiparametric methods to estimate effects from continuous treatments using the generalized propensity score, under the assumption that selection into different lengths of exposure is based on a rich set of observed covariates. We find that, despite not completing the program, participants who drop out later—thereby having longer exposures—exhibit higher employment probabilities one year after receiving training, and that marginal effects of additional exposure to training are initially constant, but increase past a certain threshold of exposure. We conclude that dropouts do benefit from longer exposures to this training program.

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