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Older Workers' Training Opportunities in Times of Workplace Innovation

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  • Elisabetta Magnani

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    (School of Economics and ARC Centre for Population Ageing Research, Australian School of Business, University of New South Wales)

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    Abstract

    Training (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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    File URL: http://cepar.edu.au/media/78398/05_older_workers__training_opportunities_in_times_of_workplace_innovation.pdf
    File Function: First version, 2012
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    Bibliographic Info

    Paper 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.

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    Length: 57 pages
    Date of creation: May 2012
    Date of revision:
    Handle: RePEc:asb:wpaper:201205

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    Related research

    Keywords: Employer-provided training; hour constraints; older workers; technological change; organizational change;

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    1. Alison Booth & Yu-Fu Chen & Gylfi Zoega, 1999. "Hiring And Firing: A Tale Of Two Thresholds," Dundee Discussion Papers in Economics 095, Economic Studies, University of Dundee.
    2. Bassanini, Andrea & Booth, Alison L. & Brunello, Giorgio & De Paola, Maria & Leuven, Edwin, 2005. "Workplace Training in Europe," IZA Discussion Papers 1640, Institute for the Study of Labor (IZA).
    3. Anger, Silke, 2008. "Overtime Work as a Signaling Device," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 167-189.
    4. René Böheim & Mark P. Taylor, 2004. "Actual and Preferred Working Hours," British Journal of Industrial Relations, London School of Economics, vol. 42(1), pages 149-166, 03.
    5. Clark, Andrew E., 2001. "What really matters in a job? Hedonic measurement using quit data," Labour Economics, Elsevier, vol. 8(2), pages 223-242, May.
    6. Alan L. Gustman & Thomas L. Steinmeier, 2004. "Minimum Hours Constraints, Job Requirements and Retirement," NBER Working Papers 10876, National Bureau of Economic Research, Inc.
    7. Tarkhani, Faouzi & Jean, Jimmy & Harchaoui, Tarek, 2003. "Prosperity and Productivity: A Canada-Australia Comparison," Economic Analysis (EA) Research Paper Series 2003018e, Statistics Canada, Analytical Studies Branch.
    8. Booth, Alison L. & Francesconi, Marco & Frank, Jeff, 2003. "A sticky floors model of promotion, pay, and gender," European Economic Review, Elsevier, vol. 47(2), pages 295-322, April.
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