Does unemployed training increase individual employability: evidence from Latvian microdata

In this paper we evaluate the efficiency of unemployed training programmes in Latvia, using propensity score matching. Primary data files provided by the State Employment Agency of Latvia are used to construct the individual database of unemployed and programme participants. Available data allow evaluating the following programs: (i) unemployed occupational training (vocational training, re-qualification and rising of qualifications); (ii) state language training for non - Latvians; (iii) modular training programme (training in foreign language, computer literacy, project management and business operation, driving). We investigate the impact of participation in each of those programs on the unemployed transition to employment, examine heterogeneity in programme effect across different so- cio - demographic (gender, age, education) and regional groups and try to establish an empirical link between targeting of the programme and its efficiency. We also test the sensitivity of our results to the so called hidden bias. The results reveal that the participation in occupational training always increases indi- vidual employability, while the effects of modular training in state language are often insignificant and the effects of modular training in other skills are weak and only appear in a long run. The effect of occupational training does not vary significantly with respect to the gender or ethnicity, but it is heterogenous with respect to the age (stronger among young unemployed) education (increasing in its level), working experience of the unem- ployed or their region of residence. The effect of modular training is higher among men, unemployed without work experience and rural area inhabitants, while modular training in other skills has the strongest impact on women, young unemployed, unemployed without work experience and Latvians.