The training market: Bonuses to relax the situation

Abstract

Even though economic influences are basically positive, it has not been possible to offer each young person capable of training a position in an enterprise. Only every second applicant being supervised by the Federal Employment Agency ends up taking part in in-house occupational training. In particular the number of 'old' applicants, that is, young people who have been trying to find a training position for a year or longer without success, has remained constant. This paper examines whether a training bonus might be the right way to improve this 'undesirable' situation. It deals with the problems that arise in connection with in-house cost-benefit calculations, the determination of training position quotas, and the expected effects of financial incentives. The paper comes to the conclusion that - in comparison to general and overall approaches - the connecting of additional training positions with a target group orientation can be evaluated positively, despite the possible negative pro-cyclic side-effects that can ensue from a bonus. According to the authors, a training bonus can indeed help 'old' applicants but is not suitable to combat the causes of the problems on the labour market which result from the categorisation of youthful 'old applicants' as 'under-performing'. Under-performance can be a result of influential factors in the family, school or social environment. 'It is a question of finding the appropriate adjustment screws in order to guarantee that the new generation is one of performers.' (IAB)

Cite article

Dietrich, H., Dietz, M., Stops, M. & Walwei, U. (2008): Ausbildungsmarkt: Bonus als Entspannungsmittel. In: IAB-Forum No. 2, p. 66-69.