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Are There Asymmetries In The Effects Of Training On The Conditional Male Wage Distribution?

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  • Mark Bryan
  • Wiji Arulampalam
  • Alison Booth

Abstract

We use a quantile regression framework to investigate the degree to which work-related training affects the location, scale and shape of the conditional wage distribution. Human capital theory suggests that the percentage returns to training investments will be the same across the conditional wage distribution. Other theories - whether based on imperfections in the labour market or on skill-mix heterogeneity - suggest that this need not be the case. Using the first six waves of the European Community Household Panel, we investigate these issues for private sector men in ten European Union countries. Our results show that, for the vast majority of countries, investment in training yields similar percentage returns across the conditional wage distribution. Only Belgium was an outlier in this respect. Our results do indicate, however, that there are considerable differences in mean returns to training across countries.

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Bibliographic Info

Paper provided by Royal Economic Society in its series Royal Economic Society Annual Conference 2004 with number 115.

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Date of creation: 17 Sep 2004
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Handle: RePEc:ecj:ac2004:115

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References

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  1. Wiji Arulampalam & Alison Booth & Mark L. Bryan, 2006. "Is There a Glass Ceiling over Europe? Exploring the Gender Pay Gap across the Wages Distribution," CEPR Discussion Papers 510, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  2. Booth,Alison L. & Snower,Dennis J. (ed.), 1996. "Acquiring Skills," Cambridge Books, Cambridge University Press, number 9780521479578, April.
  3. Budría, Santiago & Pereira, Pedro T., 2005. "Educational Qualifications and Wage Inequality: Evidence for Europe," IZA Discussion Papers 1763, Institute for the Study of Labor (IZA).
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  5. Angel López-Nicolás & Jaume García & Pedro J. Hernández, 2001. "How wide is the gap? An investigation of gender wage differences using quantile regression," Empirical Economics, Springer, vol. 26(1), pages 149-167.
  6. Lechner, Michael & Melly, Blaise, 2007. "Earnings Effects of Training Programs," CEPR Discussion Papers 6400, C.E.P.R. Discussion Papers.
  7. Manning, Alan, 2011. "Imperfect Competition in the Labor Market," Handbook of Labor Economics, Elsevier.
  8. 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).
  9. Omar Arias & Walter Sosa-Escudero & Kevin F. Hallock, 2001. "Individual heterogeneity in the returns to schooling: instrumental variables quantile regression using twins data," Empirical Economics, Springer, vol. 26(1), pages 7-40.
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  14. Wiji Arulampalam & Alison L. Booth & Mark L. Bryan, 2004. "Training in Europe," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 346-360, 04/05.
  15. Alberto Abadie & Joshua Angrist & Guido Imbens, 2002. "Instrumental Variables Estimates of the Effect of Subsidized Training on the Quantiles of Trainee Earnings," Econometrica, Econometric Society, vol. 70(1), pages 91-117, January.
  16. Koenker,Roger, 2005. "Quantile Regression," Cambridge Books, Cambridge University Press, number 9780521845731, April.
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  18. Arulampalam, Wiji & Booth, Alison L, 2001. "Learning and Earning: Do Multiple Training Events Pay? A Decade of Evidence from a Cohort of Young British Men," Economica, London School of Economics and Political Science, vol. 68(271), pages 379-400, August.
  19. Lisa M. Lynch, 1994. "Training and the Private Sector," NBER Books, National Bureau of Economic Research, Inc, number lync94-1, July.
  20. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
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  23. Martins, Pedro S. & Pereira, Pedro T., 2004. "Does education reduce wage inequality? Quantile regression evidence from 16 countries," Labour Economics, Elsevier, vol. 11(3), pages 355-371, June.
  24. Bernd Fitzenberger & Claudia Kurz, 2003. "New insights on earnings trends across skill groups and industries in West Germany," Empirical Economics, Springer, vol. 28(3), pages 479-514, July.
  25. Booth, Alison L, 1991. "Job-Related Formal Training: Who Receives It and What Is It Worth?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 53(3), pages 281-94, August.
  26. Heckman, James J & Smith, Jeffrey, 1997. "Making the Most Out of Programme Evaluations and Social Experiments: Accounting for Heterogeneity in Programme Impacts," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 487-535, October.
  27. Booth,Alison L. & Snower,Dennis J. (ed.), 1996. "Acquiring Skills," Cambridge Books, Cambridge University Press, number 9780521472050, April.
  28. Arulampalam, S.W. & Booth, A. & Elias, P., 1995. "Work-Related Training and Earnings Growth for Young Men in Britain," The Warwick Economics Research Paper Series (TWERPS) 440, University of Warwick, Department of Economics.
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Citations

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Cited by:
  1. Ang Boon Heng & Park Cheolsung & Liu Haoming & Shandre M. Thangavelu & James Wong, 2006. "The Impact of Structured Training on Workers’ Employability and Productivity," SCAPE Policy Research Working Paper Series 0702, National University of Singapore, Department of Economics, SCAPE.
  2. Almeida-Santos, Filipe & Chzhen, Yekaterina & Mumford, Karen A., 2010. "Employee Training and Wage Dispersion: White and Blue Collar Workers in Britain," IZA Discussion Papers 4821, Institute for the Study of Labor (IZA).
  3. Ang Boon Heng & Park Cheolsung & Liu Haoming & Shandre M. Thangavelu & James Wong, 2006. "The Impact of Structured Training on Workers’ Employability and Productivity," Labor Economics Working Papers 21918, East Asian Bureau of Economic Research.
  4. Anna Ruzik-Sierdzinska & Claudia Villosio & Michele Belloni & Maciej Lis & Monika Potoczna, 2013. "Age and productivity. Human Capital Accumulation and Depreciation," CASE Network Reports 0114, CASE-Center for Social and Economic Research.
  5. Anja Kuckulenz & Michael Maier, 2006. "Heterogeneous Returns to Training, An Analysis with German Data Using Local Instrumental Variables," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 226(1), pages 24-40, January.
  6. Caparrós Ruiz, Antonio & Navarro Gomez, Mª Lucia & Rueda Narváez, Mario F., 2010. "Rentabilidad salarial de la formación laboral: un análisis con datos de panel /Wage Returns to Training Investments: A Panel Data Analysis," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 28, pages 483 (20 pá, Agosto.
  7. Mario Rueda Narváez & Mª Lucía Navarro Gómez, 2010. "Formación laboral y salarios en España: nueva evidencia empírica," Investigaciones de Economía de la Educación volume 5, in: María Jesús Mancebón-Torrubia & Domingo P. Ximénez-de-Embún & José María Gómez-Sancho & Greg (ed.), Investigaciones de Economía de la Educación 5, edition 1, volume 5, chapter 15, pages 305-324 Asociación de Economía de la Educación.

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