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Who Invests in Training if Contracts are Temporary? - Empirical Evidence for Germany Using Selection Correction

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  • Jan Sauermann

Abstract

This study deals with the effect of fixed-term contracts on work-related training. Though previous studies found a negative effect of fixed-term contracts on the participation in training, from the theoretical point of view it is not clear whether workers with fixed-term contracts receive less or more training, compared to workers with permanent contracts. In addition to the existing strand of literature, we especially distinguish between employer- and employee-financed training in order to allow for diverging investment patterns of worker and firm. Using data from the German Socio-Economic Panel (GSOEP), we estimate a bivariate probit model to control for selection effects that may arise from unobservable factors, affecting both participation in training and holding fixed-term contracts. Finding negative effects for employer-sponsored, as well as for employee-sponsored training, leads us to conclude that workers with fixed-term contracts do not compensate for lower firm investments.

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Bibliographic Info

Paper provided by Halle Institute for Economic Research in its series IWH Discussion Papers with number 14.

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Date of creation: Jul 2006
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Handle: RePEc:iwh:dispap:14-06

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Keywords: training; fixed-term contracts; bivariate probit model;

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References

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  1. Acemoglu, Daron & Pischke, Jörn-Steffen, 1996. "Why do Firms Train? Theory and Evidence," CEPR Discussion Papers 1460, C.E.P.R. Discussion Papers.
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  4. Jorn-Steffen Pischke, 1996. "Continuous Training in Germany," NBER Working Papers 5829, National Bureau of Economic Research, Inc.
  5. repec:ese:iserwp:2000-13 is not listed on IDEAS
  6. Daron Acemoglu & Jorn-Steffen Pischke, 1999. "The Structure of Wages and Investment in General Training," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 539-572, June.
  7. Acemoglu, Daron, 1997. "Training and Innovation in an Imperfect Labour Market," Review of Economic Studies, Wiley Blackwell, vol. 64(3), pages 445-64, July.
  8. Jennifer Hunt, 1994. "Firing Costs, Employment Fluctuations and Average Employment: An Examination of Germany," NBER Working Papers 4825, National Bureau of Economic Research, Inc.
  9. Arulampalam, Wiji & Booth, Alison L. & Bryan, Mark L., 2003. "Training in Europe," IZA Discussion Papers 933, Institute for the Study of Labor (IZA).
  10. David H. Autor, 2000. "Why Do Temporary Help Firms Provide Free General Skills Training?," NBER Working Papers 7637, National Bureau of Economic Research, Inc.
  11. Cecilia Albert & Carlos García-Serrano & Virginia Hernanz, 2004. "Firm-provided training and temporary contracts," Spanish Economic Review, Springer, vol. 7(1), pages 67-88, January.
  12. Bartel, Ann P & Lichtenberg, Frank R, 1987. "The Comparative Advantage of Educated Workers in Implementing New Technology," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 1-11, February.
  13. Steven McIntosh, 1999. "A Cross-Country Comparison of the Determinants of Vocational Training," CEP Discussion Papers dp0432, Centre for Economic Performance, LSE.
  14. Boockmann, Bernhard & Hagen, Tobias, 2005. "Fixed-term Contracts as Sorting Mechanisms: Evidence From Job Durations in West Germany," ZEW Discussion Papers 05-85, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  15. Wallette, Mårten, 2005. "Temporary Jobs and On-the-Job Training in Sweden - A Negative Nexus?," Working Papers 2005:13, Lund University, Department of Economics.
  16. Edwin Leuven, 2005. "The Economics of Private Sector Training: A Survey of the Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 19(1), pages 91-111, 02.
  17. Katz, Eliakim & Ziderman, Adrian, 1990. "Investment in General Training: The Role of Information and Labour Mobility," Economic Journal, Royal Economic Society, vol. 100(403), pages 1147-58, December.
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Citations

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Cited by:
  1. Reinowski, Eva & Sauermann, Jan, 2008. "Hat die Befristung von Arbeitsverträgen einen Einfluss auf die berufliche Weiterbildung geringqualifiziert beschäftigter Personen?," Open Access publications from Maastricht University urn:nbn:nl:ui:27-18957, Maastricht University.
  2. Eva Reinowski & Jan Sauermann, 2008. "Hat die Befristung von Arbeitsverträgen einen Einfluss auf die Weiterbildung geringqualifiziert beschäftigter Personen?," IWH Discussion Papers 2, Halle Institute for Economic Research.
  3. Reinowski, Eva & Sauermann, Jan, 2008. "Hat die Befristung von Arbeitsverträgen einen Einfluss auf die berufliche Weiterbildung geringqualifiziert beschäftigter Personen? (Does temporary employment affect the work-related training of low-," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(4), pages 489-499.
  4. Susana Carpio & David Giuliodori & Graciana Rucci & Rodolfo Stucchi, 2011. "The Effect of Temporary Contracts on Human Capital Accumulation in Chile," IDB Publications 35358, Inter-American Development Bank.
  5. Ferrari, Filippo, 2011. "Lo sviluppo delle competenze nei contesti precari
    [Skills development in precariousness: the dark side of flexibility?]    ," MPRA Paper 33284, University Library of Munich, Germany.

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