Older Workers' Training Opportunities in Times of Workplace Innovation
AbstractTraining (for workers) and innovation (for workplaces) are not free lunches. From the viewpoint of the firm, training is also highly risky, because there is uncertainty over the size of any future returns from employer-provided training. Stylized facts stress that constraints in achieving preferred working hours have major impacts on job satisfaction. Consequently hour constraints may lead to workers' job mobility and older workers' retirement. Firms internalize the risk of workers' mobility by reducing their training investments in these workers. I contrast this model with a signalling model of hour constraints where, in the face of asymmetric information over workers' quality and reliability, and so over profitability of training, workers may trade present hour constraints (at the current wage), for training (and future wage) opportunities. This set of reasoning implies that, empirically, we should observe a positive correlation between training and hour constraints at the individual level. I use two matched employer-employee datasets, for Australia and Canada respectively, to test the competing empirical implications of these two models for the link between hour constraints and training. The main result of this study is that there is little support for hour constraints as a signal of future reliability and productivity. Rather, hour constrained individuals appear to have less chance to receiving training. This result survives a number of robustness exercises that attempt to control for selection on observables and selection on unobservables that determine the hour constraint outcome. Institutional differences in the retirement funding system, and the differential appeal of outside option (the option of exiting the labour force) in Australia and Canada in the two survey years contribute to explain the different patterns of training and hour constraints older workers face in these two countries.
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Bibliographic InfoPaper provided by ARC Centre of Excellence in Population Ageing Research (CEPAR), Australian School of Business, University of New South Wales in its series Working Papers with number 201205.
Length: 57 pages
Date of creation: May 2012
Date of revision:
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Employer-provided training; hour constraints; older workers; technological change; organizational change;
Find related papers by JEL classification:
- J1 - Labor and Demographic Economics - - Demographic Economics
- J2 - Labor and Demographic Economics - - Demand and Supply of Labor
- J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
This paper has been announced in the following NEP Reports:
- NEP-AGE-2012-06-25 (Economics of Ageing)
- NEP-ALL-2012-06-25 (All new papers)
- NEP-DEM-2012-06-25 (Demographic Economics)
- NEP-LAB-2012-06-25 (Labour Economics)
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