Bryan M () (Institute for Social and Economic Research) Booth A () (Department of Economics, University of Essex) Arulampalam W () (University of Warwick)
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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 suggest that, for the vast majority of countries, investment in training yields similar percentage returns across the conditional wage distribution. In other words, the way in which unobservables interact with training is fairly uniform across the conditional distribution. Only Belgium was an outlier in this respect. However, our results do suggest that there are considerable differences in mean returns to training across countries. We also find that there are positive returns to education and that education shifts the wage distribution to the right. In addition, the returns at the upper parts of the conditional distribution are much higher than at the lower parts of the distribution. This finding is consistent with the idea that there are complementarities between unobservable ability (or productivity) and education, since higher ability individuals - further to the right in the conditional wage distribution - have higher returns to education.
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Paper provided by Institute for Social and Economic Research in its series ISER working papers with number
2004-01.
Length: 23 Date of creation: 20 Jan 2004 Date of revision: Publication status: published Handle: RePEc:ese:iserwp:2004-01
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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.:
Arulampalam, Wiji & Booth, Alison L. & Bryan, Mark L., 2003.
"Training in Europe,"
IZA Discussion Papers
933, Institute for the Study of Labor (IZA).
[Downloadable!]
Andrea Bassanini & Alison Booth & Giorgio Brunello & Maria De Paola & Edwin Leuven, 2005.
"Workplace Training in Europe,"
IZA Discussion Papers
1640, Institute for the Study of Labor (IZA).
[Downloadable!]
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