Do dropouts with longer training exposure benefit from training programs? Korean evidence employing methods for continuous treatments

Failure of participants to complete training programs is pervasive in existing active labor market programs, both in developed and developing countries. From a policy perspective, it is of interest to know if dropouts benefit from the time they spend in training since these programs require considerable resources. We shed light on this issue by estimating the average employment effects of different lengths of exposure by dropouts in a Korean job training program, and contrasting it to the ones by program completers. To do this, we employ 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 dropouts with longer exposures exhibit higher employment probabilities one year after receiving training, but only after surpassing a threshold of exposure of about 12–15 weeks. In contrast, program completers exhibit higher returns from their time of exposure to the program than dropouts, but these tend to decline for longer program durations. Copyright Springer-Verlag Berlin Heidelberg 2015