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The Puzzle of Non-Participation in Continuing Training – An Empirical Study of Permanent vs. Occasional Non-Participation

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Author Info
Uschi Backes-Gellner () (Institute for Strategy and Business Economics, University of Zurich)
Johannes Mure () (Institute for Strategy and Business Economics, University of Zurich)
Simone Tuor () (Institute for Strategy and Business Economics, University of Zurich)

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Abstract

Although participation in continuing vocational training is often found to be associated with considerable individual benefits, a puzzlingly large number of people still do not take part in training. We argue that in order to solve the puzzle it is important to take selection effects into account when studying the returns to education. It has already been established that training participants and non-participants differ in unobservable charac-teristics and therefore self-select into training or not. We show that even non-participants cannot be treated as a homogeneous group: there are individuals who never take part in training (permanent non-participants) and individuals currently not taking part (occasional non-participants). Using a unique data set of non-participants we sepa-rate and compare those two groups. We find that, if they participated, permanent non-participants would have higher costs than occasional non-participants and the benefits associated with their current jobs would be lower. However, even permanent non-participants would benefit from participation in terms of improved prospects on the la-bor market. The results indicate that permanent non-participants either misperceive fu-ture developments or suffer from an exceptionally high discount rate, which in turn leads in their view to a negative cost-benefit ratio for training.

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Publisher Info
Paper provided by University of Zurich, Institute for Strategy and Business Economics (ISU) in its series Economics of Education Working Paper Series with number 0004.

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Length: 46 pages
Date of creation: Aug 2006
Date of revision:
Handle: RePEc:iso:educat:0004

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Related research
Keywords: Further training; Investing in human capital; Costs-benefit ratio;

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Find related papers by JEL classification:
M5 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics
M12 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Personnel Management; Executive Compensation
M53 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Training

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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.:

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    Other versions:
  7. Edwin Leuven & Hessel Oosterbeek, 2002. "A New Approach to estimate the Wage Returns to Work-related Training," Tinbergen Institute Discussion Papers 02-091/3, Tinbergen Institute. [Downloadable!]
    Other versions:
  8. Groot, Wim, 1995. "The Wage Effects of Investments in Enterprise-Related Training," Empirical Economics, Springer, vol. 20(1), pages 133-47.
  9. Hill, Elizabeth T., 2001. "Post-school-age training among women: training methods and labor market outcomes at older ages," Economics of Education Review, Elsevier, vol. 20(2), pages 181-191, April. [Downloadable!] (restricted)
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  12. 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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