Intergenerational effects of active labour market policies

Cordula D. Zabel, Institute for Employment Research (IAB)
Eva Kopf, Institute for Employment Research (IAB)

We study the influence of parents’ participation in active labour market programmes, such as training, job subsidies, or workfare, on their children’s successful entry into vocational training and employment at a later point in time. In this way, we hope to gain an understanding of whether parents’ programme participation contributes to avoiding an intergenerational transmission of unemployment. The focus is on recipients of means-tested unemployment benefits in Germany. We expect parents’ employment chances and economic situation to improve as a consequence of programme participation and therefore their ability to invest in their children’s education. Parents’ employment may also have a positive effect on children’s self-esteem and can improve their scholastic achievements in this manner as well. Parents’ participation particularly in longer-term programmes that involve a regular daily schedule might also contribute to improving children’s success in school, as well as in entering vocational training or employment, in as far as parents’ function as a role model is a factor. We use administrative data and focus on teenagers who were 14-17 years old when their parents participated in a programme. We draw comparable families from participant and non-participant groups using matching methods. Preliminary findings indicate significantly positive effects of parents’ participation in further vocational training on children’s apprenticeship chances in their early twenties, and negative effects on children’s unemployment and means-tested benefit receipt. Our analyses can contribute to understanding whether and which types of active labour market programmes have particularly long-term effects, improving the situation of the next generation as well.