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Evaluating the Effect of Tax Deductions on Training

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Author Info
Edwin Leuven (University of Amsterdam and Tinbergen Institute)
Hessel Oosterbeek (University of Amsterdam and Tinbergen Institute)

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Abstract

Dutch employers can claim an extra tax deduction when they train employees older than age 40. This discontinuity in a firm's training cost is exploited to identify the tax deduction's effects on training participation and of training participation on wages. The results show that the training rate of workers just above age 40 is 15%20% higher than that of workers just below age 40. This difference mainly results from the postponement of training and is not a stimulating effect of the measure. The two-stage least squares estimate of the wage effect of training is not statistically different from zero.

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Publisher Info
Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 22 (2004)
Issue (Month): 2 (April)
Pages: 461-488
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Handle: RePEc:ucp:jlabec:v:22:y:2004:i:2:p:461-488

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Joshua D. Angrist & Victor Lavy, 1999. "Using Maimonides' Rule To Estimate The Effect Of Class Size On Scholastic Achievement," The Quarterly Journal of Economics, MIT Press, vol. 114(2), pages 533-575, May. [Downloadable!] (restricted)
  2. Joshua Angrist & Victor Lavy, 1999. "New Evidence on Classroom Computers and Pupil Learning," NBER Working Papers 7424, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. Jorn-Steffen Pischke, 1996. "Continuous Training in Germany," NBER Working Papers 5829, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Harmon, Colm & Walker, Ian, 1995. "Estimates of the Economic Return to Schooling for the United Kingdom," American Economic Review, American Economic Association, vol. 85(5), pages 1278-86, December. [Downloadable!] (restricted)
  5. van der Klaauw, Wilbert, 1997. "A Regression-Discontinuity Evaluation of the Effect of Financial Aid Offers on College Enrollment," Working Papers 97-10, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]
  6. John Bishop, 1994. "The Impact of Previous Training on Productivity and Wages," NBER Chapters, in: Training and the Private Sector, pages 161-200 National Bureau of Economic Research, Inc. [Downloadable!]
  7. Barron, John M & Berger, Mark C & Black, Dan A, 1997. "How Well Do We Measure Training?," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 507-28, July. [Downloadable!] (restricted)
  8. Lynch, Lisa M, 1992. "Private-Sector Training and the Earnings of Young Workers," American Economic Review, American Economic Association, vol. 82(1), pages 299-312, March.
  9. Tomas J. Philipson, 2000. "External Treatment Effects and Program Implementation Bias," NBER Technical Working Papers 0250, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  10. Harry J. Holzer & Richard Block & Marcus Cheatham & Jack H. Knott, 1993. "Are training subsidies for firms effective? The Michigan experience," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 46(4), pages 625-636, July.
  11. Anne B. Royalty, 1996. "The effects of job turnover on the training of men and women," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 49(3), pages 505-521, April.
  12. Booth, Alison L, 1993. "Private Sector Training and Graduate Earnings," The Review of Economics and Statistics, MIT Press, vol. 75(1), pages 164-70, February. [Downloadable!] (restricted)
  13. Edwin Leuven & Hessel Oosterbeek, 1997. "Demand and Supply of Work-Related Training: Evidence from our Four Countries," Tinbergen Institute Discussion Papers 97-013/3, Tinbergen Institute.
  14. Barron, John M & Black, Dan A & Loewenstein, Mark A, 1987. "Employer Size: The Implications for Search, Training, Capital Investment, Starting Wages, and Wage Growth," Journal of Labor Economics, University of Chicago Press, vol. 5(1), pages 76-89, January. [Downloadable!] (restricted)
  15. Hahn, Jinyong & Todd, Petra & Van der Klaauw, Wilbert, 2001. "Identification and Estimation of Treatment Effects with a Regression-Discontinuity Design," Econometrica, Econometric Society, vol. 69(1), pages 201-09, January.
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Burgert, Derik, 2006. "Betriebliche Weiterbildung und der Verbleib Älterer im Betrieb," MPRA Paper 5742, University Library of Munich, Germany. [Downloadable!]
  2. Leuven, Edwin & Oosterbeek, Hessel, 2002. "A New Approach to Estimate the Wage Returns to Work-Related Training," IZA Discussion Papers 526, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  3. Alfons Palangkaraya & Jongsay Yong, 2004. "How Effective is Lifetime Health Cover in Raising Private Health Insurance Coverage in Australia? An Assessment Using Regression Discontinuity," Melbourne Institute Working Paper Series wp2004n33, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
    Other versions:
  4. Maarten Cornet & Fré Huizinga & Bert Minne & Dinand Webbink, 2006. "Successful knowledge policies," CPB Memoranda 158, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  5. Bert Minne & Marc van der Steeg & Dinand Webbink, 2008. "Skill gaps in the EU: role for education and training policies," CPB Documents 162, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  6. Rita Asplund, 2004. "The Provision and Effects of Company Training. A brief review of the literature," Discussion Papers 907, The Research Institute of the Finnish Economy. [Downloadable!]
  7. Dinand Webbink, 2004. "Returns to university education; Evidence from an institutional reform," CPB Discussion Papers 34, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  8. Leuven, Edwin & Lindahl, Mikael & Oosterbeek, Hessel & Webbink, Dinand, 2004. "The Effect of Extra Funding for Disadvantaged Pupils on Achievement," IZA Discussion Papers 1122, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  9. Robert A. J. Dur & Amihai Glazer, 2005. "The Desire for Impact," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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  10. David S. Lee & Thomas Lemieux, 2009. "Regression Discontinuity Designs in Economics," NBER Working Papers 14723, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  11. Edwin Leuven & Hessel Oosterbeek & Randolph Sloof & Chris van Klaveren, 2002. "Worker Reciprocity and Employer Investment in Training," Tinbergen Institute Discussion Papers 02-090/3, Tinbergen Institute. [Downloadable!]
    Other versions:
  12. Rita Almeida & Pedro Carneiro, 2006. "The Return to the Firm Investment in Human Capital," IZA Discussion Papers 1937, Institute for the Study of Labor (IZA). [Downloadable!]
  13. Rita Almeida & Pedro Carneiro, 2005. "The return to firm investment in human capital," CeMMAP working papers CWP21/05, Centre for Microdata Methods and Practice, Institute for Fiscal Studies. [Downloadable!]
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