Labor Market Outcomes of Voucher Based Job Training

This paper investigates how labor market outcomes of voucher based job training differ in terms of employment rates and job quality during the year of 2012-13 in Korea. Using a sample survey of vocational skills development program participants based on administrative data on vocational skills training and registry of jobseekers, this paper empirically tests whether voucher-based job training contributes to promoting labor market outcomes in terms of employment probabilities and job quality obtained since the completion of training programs compared to job seekers in the Korean labor market. Results show that there exists a negative lock in effects of 9 percentage points in employment rates for jobs covered by employment insurance, while for jobs of all sort regardless of social insurance coverage the negative effect is also observed in the short term, which turns positive after about 4 months since training participation. These findings shed light on the recent debates on whether or not the introduction of voucher based system in job training provides more benefits for jobseekers as well as for public service agencies as promised by the proponents of voucher based system in job training.