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Career progression and formal versus on-the-job training

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Author Info
Jerome Adda (Institute for Fiscal Studies and European University Institute)
Christian Dustmann () (Institute for Fiscal Studies and University College London)
Costas Meghir () (Institute for Fiscal Studies and University College London)
Jean-Marc Robin () (Institute for Fiscal Studies and EUREQua, University of Paris 1)

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Abstract

We model the choice of individuals to follow or not apprenticeship training and their subsequent career. We use German administrative data, which records education, labour market transitions and wages to estimate a dynamic discrete choice

model of training choice, employment and wage growth. The model allows for returns to experience and tenure, match specific effects, job mobility and search frictions. We show how apprenticeship training affects labour market careers and we quantify its benefits, relative to the overall costs. We then use our model to show how two welfare reforms change life-cycle decisions and human capital accumulation: One is the introduction of an Earned Income Tax Credit in Germany, and the other is a reform to Unemployment Insurance. In both reforms we find very significant impacts of the policy on training choices and on the value of realized matches, demonstrating the importance of considering such longer term implications.

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Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W09/06.

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Date of creation: Jan 2009
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Handle: RePEc:ifs:ifsewp:09/06

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  3. Pierre Cahuc & Fabien Postel-Vinay & Jean-Marc Robin, 2006. "Wage Bargaining with On-the-Job Search: Theory and Evidence," Econometrica, Econometric Society, vol. 74(2), pages 323-364, 03. [Downloadable!] (restricted)
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  4. Stephen V. Cameron & James J. Heckman, 1998. "Life Cycle Schooling and Dynamic Selection Bias: Models and Evidence for Five Cohorts of American Males," Journal of Political Economy, University of Chicago Press, vol. 106(2), pages 262-333, April. [Downloadable!] (restricted)
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  6. James Heckman & Lance Lochner & Ricardo Cossa, 2002. "Learning-By-Doing Vs. On-the-Job Training: Using Variation Induced by the EITC to Distinguish Between Models of Skill Formation," NBER Working Papers 9083, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  8. Christian Dustmann & Costas Meghir, 2001. "Wages, experience and seniority," IFS Working Papers W01/01, Institute for Fiscal Studies. [Downloadable!]
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  9. Mortensen, Dale T & Pissarides, Christopher A, 1994. "Job Creation and Job Destruction in the Theory of Unemployment," Review of Economic Studies, Blackwell Publishing, vol. 61(3), pages 397-415, July. [Downloadable!] (restricted)
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  18. Topel, Robert H & Ward, Michael P, 1992. "Job Mobility and the Careers of Young Men," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 439-79, May. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, 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.)

  1. Matilde Bombardini & Giovanni Gallipoli & Germán Pupato, 2009. "Skill Dispersion and Trade Flows," NBER Working Papers 15097, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Stephen Machin, 2008. "The new economics of education: methods, evidence and policy," Journal of Population Economics, Springer, vol. 21(1), pages 1-19, January. [Downloadable!] (restricted)
  3. Christian Dustmann & Uta Schönberg, 2007. "Apprenticeship Training and Commitment to Training Provision," Economics of Education Working Paper Series 0032, University of Zurich, Institute for Strategy and Business Economics (ISU). [Downloadable!]
  4. Haan, Peter & Prowse, Victoria L. & Uhlendorff, Arne, 2008. "Employment Effects of Welfare Reforms: Evidence from a Dynamic Structural Life-Cycle Model," IZA Discussion Papers 3480, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  5. Carlin, Wendy & Soskice, David, 2007. "Reforms, Macroeconomic Policy and Economic Performance in Germany," CEPR Discussion Papers 6415, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  6. Costas Meghir, 2006. "Dynamic models for policy evaluation," IFS Working Papers W06/08, Institute for Fiscal Studies. [Downloadable!]
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