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The impact of training on productivity and wages: evidence from British panel data

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  • Lorraine Dearden

    ()
    (Institute for Fiscal Studies and Bedford Group, Institute of Education, University of London)

  • Howard Reed

    (Institute for Fiscal Studies)

  • John Van Reenen

Abstract

It is standard in the literature on training to use wages as a sufficient statistic for productivity. This paper examines the effects of work-related training on direct measures of productivity. Using a new panel of British industries 1983-1996 and a variety of estimation techniques we find that work-related training is associated with significantly higher productivity. A one percentage point increase in training is associated with an increase in value added per hour of about 0.6% and an increase in hourly wages of about 0.3%. We also show evidence using individual level datasets that is suggestive of training externalities.

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Bibliographic Info

Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W05/16.

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Length: 39 pp.
Date of creation: Aug 2005
Date of revision:
Handle: RePEc:ifs:ifsewp:05/16

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Keywords: Productivity; training; wages; panel data;

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References

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