Anna Heusler (Institute for Employment Research)
This paper provides novel evidence on the short-run labor market effects of a newly introduced public career counseling program that targets employed workers facing professional reorientation. The study exploits regional variation in program intensity, which is arguably exogenous conditional on detailed local labor market characteristics. Using rich German administrative data, I estimate treatment effects up to 18 months after program entry. The results show that counseling accelerates career reorientation but initially reduces regular employment. After 18 months, participants are 9 percentage points less likely to be in regular employment compared to the counterfactual without counseling. Part of this decline appears to be driven by lock-in effects, as counseling increases human capital investments, including participation in vocational training programs. The results point to effect heterogeneity by gender and show more pronounced effects for workers with lower skill levels. Overall, the findings highlight the role of counseling as a complementary service in supporting skill adjustment during labor market transformation.