The professional-training-gap for adolescents in welfare dependent households

We examine how welfare benefit receipt influences the transition from school into all forms of professional training, including vocational training and higher education. We use a unique data set that combines panel survey data with detailed administrative records of adolescents in Germany and develop a dynamic multiple imputation method to account for missing data. We find that adolescents in welfare dependent households show more fragmented transition patterns than others after leaving school. They are significantly less likely to enter professional training even after controlling for a rich set of individual and household related factors, including school type and grades. A key driver of this training gap is the school type, while school grades play no role. Our results imply a long-lasting impact of early socioeconomic conditions on later labor market transitions.