Abstract

In this project, we study the influence of parents’ participation in active labor market programs on their children’s successful entry into vocational training and employment at a later point in time. In this way, we can gain an understanding of whether parents’ program participation has the potential to contribute to avoiding an intergenerational transmission of welfare dependency. Most research on intergenerational mobility relates to the transmission of unemployment and poverty. Only few studies specifically focus on intergenerational welfare dependency, especially for Germany. By choosing this focus, we can investigate to what extent active labor market policies for welfare recipients improve the next generation’s training and employment prospects as well.
On the basis of our theoretical considerations, we expect parents’ employment chances and economic situation to improve as a consequence of their participation in active labor market programs. Parents would thus better be able to afford investments in their children’s education in the long run. Parents’ participation particularly in longer-term programs that involve a regular daily schedule, such as further vocational training or One-Euro-Jobs, should have a positive impact on their children’s subsequent employment opportunities for an additional reason as well. If the parents have a regular daily schedule, then this can convey values which may be beneficial for the children’s success in school and in entering vocational training and employment. Parents’ work or further vocational training can also have a positive effect on children’s self-esteem and can improve their scholastic achievements in this manner as well.
For our empirical analyses, we draw on administrative data. We study effects of active labor market programs in which parents participated in 2006 on their children’s education and employment outcomes in subsequent years. Our study focuses on teenagers who were 14-17 years old when their parents participated in the active labor market program. We differentiate between 1) teenagers whose parents were granted a job subsidy or participated in a workfare program or a further vocational training program within a specified time span in the year 2006, and 2) those whose parents did not participate in an active labor market program. In order to determine the effects of the parents’ program participation, we draw comparable families from both groups using matching methods.