Retraining Programs in Russia and Romania: Impact Evaluation Study

Sustainable economic growth requires an effective re-training system that would facilitate the match of labor supply to the changing due to rapid technological progress labor demand. Moreover, the expected increased openness of the Russian economy due to WTO accession is likely to affect labor demand as well and could have adverse effects on employment. The degree of effectiveness of public re-training programs under operation would largely determine the adjustment costs of trade liberalization as well as the flexibility of the economy with respect to technological changes. A part of re-training system is traditionally associated with state employment offices' programs. Despite the greater than ever interest in Russia and Romania to governmental programs in the context of the on-going public discussion on the role and size of the government, little is known, however, on the impact of state programs in the labor market, and about the effects of public re-training programs in particular.

Benus, Brinza, Cuica, Denisova, and Kartseva (2005)Propensity score matching, where non-participants are those who applied for training but were not selected.Training and unemployment benefits, including a public service component, where local government and other eligible organizations propose public projects and hire ALMP participants to work on them.Statistically significant effects on the likelihood of employment, the likelihood of being employed at least once, and on wage levels. Middle aged had biggest impacts. Retraining increases the probability of employment and decreases the wage for females. Program not beneficial for highly educated. Registered unemployed, having income less than 50% of minimum wage, employed 6 months of last 12 or recent graduate. 45% of sample had university degree.