Publications

05 Sep 19

Evaluation of Language Training Programs in Luxembourg using Principal Stratification.

Authors: BIA Michela, FLORES-LAGUNES Alfonso, MERCATANTI Andrea.

Abstract: In a world increasingly globalized, multiple language skills can create more employment opportunities. Several countries include language training programs in active labor market programs for the unemployed. We analyze the effects of a language training program on the re-employment probability and hourly wages of the unemployed simultaneously, using highquality administrative data from Luxembourg. We address selection into training by exploiting the rich administrative information available, and account for the complication that wages are “truncated” by unemployment by adopting a principal stratification framework. Estimation is undertaken with a mixture model likelihood-based approach. To improve inference, we use the individual’s hours worked as a secondary outcome and a stochastic dominance assumption. These two features considerably ameliorate the multimodality problem commonly encountered in mixture models. We also conduct sensitivity analysis to assess the unconfoundedness assumption employed. Our results strongly suggest a positive effect (of up to 12.7 percent) of the language training programs on the re-employment probability, but no effects on wages for those who are observed employed regardless of training participation.

Reference: BIA Michela, FLORES-LAGUNES Alfonso, MERCATANTI Andrea. Evaluation of Language Training Programs in Luxembourg using Principal Stratification. LISER, 2019, Working Papers n°2019-12, 56 p.

Keywords:
language training programs,
policy evaluation,
principal stratification,
unconfoundedness,
sensitivity analysis

Project: Active Labour Market Policies Evaluation in Luxembourg