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Peer Effects in Labor Market Training

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  • Ulrike Unterhofer

Abstract

This paper shows that the group composition matters for the effectiveness of labor market training programs for jobseekers. Using rich administrative data from Germany, I document that greater average exposure to highly employable peers leads to increased employment stability after program participation. Peer effects on earnings are positive and long-lasting in classic vocational training and negative but of short duration in retraining, pointing to different mechanisms. Finally, I also find evidence for non-linearities in effects and show that more heterogeneity in the peer group is detrimental.

Suggested Citation

  • Ulrike Unterhofer, 2022. "Peer Effects in Labor Market Training," Papers 2211.12366, arXiv.org, revised Jun 2023.
    • Handle: RePEc:arx:papers:2211.12366
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    References listed on IDEAS

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