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Training during recessions: recent European evidence

Marco Bertoni
Marco Bertoni
 and 
Giorgio Brunello
Giorgio Brunello
   | Sep 14, 2022
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Published Online: Sep 14, 2022
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Accepted: Jul 17, 2022
DOI: https://doi.org/10.2478/izajolp-2022-0007
Keywords
© 2022 Marco Bertoni et al., published by Sciendo
This work is licensed under the Creative Commons Attribution 4.0 International License.

The effects of the business cycle (U.cycle) on training hours and employment status

(1) (2) (3) (4)
Dependent variable Training hours Employment probability Training hours Training hours
Sample All All Employed Not Employed
Cyclical component of unemployment rate × 10 −0.038 (0.133) −0.004*** (0.001) 0.006 (0.011) −0.783*** (0.022)z
Demand shock: Zct 0.007*** (0.001)
Inverse Mills ratio 0.099 (0.147) 7.073*** (0.386)
Male −0.116*** (0.011) 0.140*** (0.002) −0.130*** (0.039) 1.916*** (0.095)
Age −0.034*** (0.001) −0.008*** (0.001) −0.025*** (0.002) −0.159*** (0.007)
Has tertiary education 1.044*** (0.032) 0.154*** (0.002) 0.970*** (0.037) 3.341*** (0.142)
R-squared 0.018 0.098 0.019 0.028
Observations 43,173,984 43,173,984 30,372,267 12,801,617
Estimation method OLS Probit OLS OLS

The relationship among employment protection, public training expenditure on GDP, and the sensitivity of training participation to the business cycle: second step estimate

Dependent variable: the sensitivity of training participation to the business cycle
Employment protection index 0.022** (0.010)
Public expenditure for training as % of GDP 0.045* (0.023)
Observations 22
R-squared 0.25

The effects of the business cycle (U.cycle) on training participation and employment status (excluding the inactive)

(1) (2) (3) (4)
Dependent variable Training participation Employment probability Training participation Training participation
Sample Labor force Labor force Employed Unemployed
Cyclical component of unemployment rate × 10 0.018** (0.008) −0.026*** (0.006) 0.026*** (0.008) 0.036*** (0.008)
Demand shock: Zct 0.005*** (0.001)
Inverse Mills ratio −0.127*** (0.026) −0.121*** (0.031)
Observations 32,998,703 32,998,703 30,372,367 2,626,336
Estimation method OLS Probit OLS OLS

The effects of the business cycle (U.cycle) on training participation (by gender, age, education and industry)

(1) (2) (3)
Cyclical component of unemployment rate × 10 All Employed Not Employed
Males 0.011* (0.006) 0.011* (0.006) −0.002 0.006
Females 0.018** (0.007) 0.030*** (0.009) 0.011** (0.006)
Age 25–44 years 0.015** (0.007) 0.026*** (0.008) 0.015*** (0.005)
Age 45–64 years 0.015** (0.006) 0.038*** (0.007) 0.015** (0.005)
Less-than-upper-secondary education 0.002 (0.006) 0.022*** (0.008) −0.007 (0.006)
Upper secondary education 0.011** (0.005) 0.009 (0.005) 0.005 (0.005)
Tertiary education 0.039*** (0.001) 0.042*** (0.015) 0.034*** (0.012)
Manufacturing 0.011 (0.008)
Private services 0.023** (0.009)
Public services 0.039** (0.015)

The effects of the business cycle (U.cycle) on training participation by employment status – 5% random sample by country and time period

(1) (2)
Dependent variable Training participation Training participation
Sample Employed Not employed
Cyclical component of unemployment rate × 10 0.021*** (0.008) 0.007 (0.007)
Inverse Mills ratio −0.110*** (0.012) 0.045*** (0.012)
Observations 1,518,752 639,964

Descriptive analysis

Training participation Training hours
Gender: male −0.020*** (0.001) −0.030*** (0.007)
Age × 10 −0.005*** (0.000) −0.038*** (0.002)
Upper secondary education 0.008*** (0.002) 0.212*** (0.031)
Tertiary education 0.058*** (0.003) 1.301 *** (0.054)
Not employed −0.029*** (0.001) 0.645*** (0.047)
Second quarter −0.001 (0.004) 0.038 (0.084)
Third quarter −0.028*** (0.003) −0.367*** (0.073)
Fourth quarter 0.003 (0.004) 0.068 (0.083)
Western and Central Europe 0.051*** (0.003) 1.342*** (0.049)
Southern Europe 0.018*** (0.002) 0.660*** (0.065)
Northern Europe 0.123*** (0.006) 1.783*** (0.120)
Observations 43,173,984 43,173,984
R-squared 0.048 0.011

Descriptive statistics

Observations Mean SD
Participated in training 43,173,984 0.066 0.248
Participated in training – employed 30,372,367 0.079 0.271
Participated in training – not employed 12,801,617 0.034 0.181
Training hours 43,173,984 1.113 9.205
Training hours – employed 30,372,367 1.090 7.664
Training hours – not employed 12,801,617 1.170 12.100
Age (years) 43,173,984 45.38 11.07
Male 43,173,984 0.486 0.500
Has a tertiary education degree or higher 43,173,984 0.249 0.432
Employed 43,173,984 0.703 0.457
Unemployment rate – cyclical component 1,620 0 1.128
Unemployment rate – trend 1,620 0.092 0.041
Employment rate – cyclical component 1,620 0 0.994
Employment rate – trend 1,620 0.643 0.059

The effects of the business cycle (U.cycle) on training participation and employment status

(1) (2) (3) (4)
Dependent variable Training participation Employment probability Training participation Training participation
Sample All All Employed Not employed
Cyclical component of unemployment rate × 10 0.015** (0.006) −0.038*** (0.006) 0.024*** (0.007) 0.006 (0.005)
Demand shock: Zct 0.007*** (0.001)
Inverse Mills ratio −0.108*** (0.010) 0.051*** (0.005)
Male gender −0.015*** (0.001) 0.140*** (0.002) −0.045*** (0.003) 0.006*** (0.001)
Age −0.001*** (0.009) −0.008*** (0.001) 0.001*** (0.001) −0.003*** (0.001)
Has tertiary education 0.058*** (0.002) 0.154*** (0.002) 0.036*** (0.003) 0.052*** (0.002)
R-squared 0.076 0.098 0.077 0.062
Observations 43,173,984 43,173,984 30,372,267 12,801,617
Estimation method OLS Probit OLS OLS

The effect of selection into employment on the estimates of the effects of the business cycle on training participation

(1) (2) (3) (4)
Dependent variable Training participation Training participation Training participation Training participation
Sample Employed Not employed Employed Not employed
Cyclical component of unemployment rate × 10 0.024*** (0.008) 0.006 (0.005) 0.017** (0.007) 0.010* (0.005)
Inverse Mills ratio −0.108*** (0.009) 0.055*** (0.005)
Observations 30,372,267 12,801,617 30,372,267 12,801,617
Estimation method OLS OLS OLS OLS

The effects of the business cycle (U.cycle) on training participation and labor force participation status

(1) (2) (3) (4)
Dependent variable Training participation Labor force participation Training participation Training participation
Sample All All Active Inactive
Cyclical component of unemployment rate × 10 0.015** (0.006) −0.006** (0.003) 0.019** (0.007) 0.005 (0.005)
Demand shock: Zct 0.004*** (0.001)
Inverse Mills ratio −0.062*** (0.005) 0.086*** (0.035)
Male −0.015*** (0.001) 0.145*** (0.002) −0.035*** (0.002) 0.015*** (0.001)
Age −0.001*** (0.000) −0.010*** (0.001) 0.001*** (0.000) −0.002*** (0.001)
Has tertiary education 0.058*** (0.002) 0.126*** (0.001) 0.048*** (0.002) 0.052*** (0.002)
R-squared 0.076 0.098 0.077 0.062
Observations 43,173,984 43,173,984 30,372,267 12,801,617
Estimation method OLS Probit OLS OLS
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