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Work-Related Training and Wages: An Empirical Analysis for Male Workers in Switzerland

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  • Gerfin, Michael

    ()
    (University of Bern)

Abstract

Work-related training is considered to be very important for providing the workforce with the necessary skills for maintaining and enhancing the competitiveness of the firms and the economy. On the individual level, the primary effect of training should be an increased productivity of the trained workers. This paper provides estimates of the effects of training on wages which can be seen as a lower bound for the effects on productivity. Based on panel data from the Swiss Labour Force Survey (SLFS) I estimate these effects using nonparametric matching methods. Training is measured either as firm-sponsored training or as any work-related training. The data show that multiple participation in work-related training is not a rare event. This complicates the analysis considerably because the evaluation of dynamic treatments is not yet fully developed. As a solution to this problem a heuristic difference-in-differences approach to estimate the incremental effect of further training events is used. The results indicate that it is important to account for multiple training events. Taken together, there are significant effects of work-related training on wages of roughly 2% for each training event. There is some evidence that workers who already have high earnings profit more from continuous work-related training.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1078.

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Length: 23 pages
Date of creation: Mar 2004
Date of revision:
Handle: RePEc:iza:izadps:dp1078

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Keywords: Training; Wages; Nonparametric Matching;

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References

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  1. Ruth Miquel, 2003. "Identification of Effects of Dynamic Treatments with a Difference-in-Differences Approach," University of St. Gallen Department of Economics working paper series 2003 2003-06, Department of Economics, University of St. Gallen.
  2. Booth, Alison L & Zoega, Gylfi, 2001. "Is Wage Compression a Necessary Condition for Firm-Financed General Training?," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2845, C.E.P.R. Discussion Papers.
  3. Jorn-Steffen Pischke, 1996. "Continuous Training in Germany," NBER Working Papers 5829, National Bureau of Economic Research, Inc.
  4. Joshua Angrist & Alan Krueger, 1998. "Empirical Strategies in Labor Economics," Working Papers, Princeton University, Department of Economics, Industrial Relations Section. 780, Princeton University, Department of Economics, Industrial Relations Section..
  5. Daron Acemoglu & Joern-Steffen Pischke, 1998. "Beyond Becker: Training in Imperfect Labor Markets," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 98-12, Massachusetts Institute of Technology (MIT), Department of Economics.
  6. Acemoglu, D. & Pischke, J.S., 1997. "The Structure of Wages and Investment in General Training," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 97-24, Massachusetts Institute of Technology (MIT), Department of Economics.
  7. Goux, Dominique & Maurin, Eric, 2000. "Returns to firm-provided training: evidence from French worker-firm matched data1," Labour Economics, Elsevier, Elsevier, vol. 7(1), pages 1-19, January.
  8. Michael Gerfin, 2003. "Firm-sponsored Work-Related Training in Frictional Labour Markets: An empirical analysis for Switzerland," Diskussionsschriften, Universitaet Bern, Departement Volkswirtschaft dp0317, Universitaet Bern, Departement Volkswirtschaft.
  9. John M. Barron & Mark C. Berger & Dan A. Black, 1999. "Do Workers Pay for On-The-Job Training?," Journal of Human Resources, University of Wisconsin Press, vol. 34(2), pages 235-252.
  10. Groot, Wim, 1995. "The Wage Effects of Investments in Enterprise-Related Training," Empirical Economics, Springer, Springer, vol. 20(1), pages 133-47.
  11. John M. Barron & Mark C. Berger & Dan A. Black, 1997. "On-the-Job Training," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, W.E. Upjohn Institute for Employment Research, number ojt.
  12. Heckman, James J & Ichimura, Hidehiko & Todd, Petra E, 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 64(4), pages 605-54, October.
  13. Michael LECHNER, 1999. "The Effects of Enterprise-Related Training in East Germany on Individual Employment and Earnings," Annales d'Economie et de Statistique, ENSAE, issue 55-56, pages 97-128.
  14. Stevens, Margaret, 1994. "A Theoretical Model of On-the-Job Training with Imperfect Competition," Oxford Economic Papers, Oxford University Press, vol. 46(4), pages 537-62, October.
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Citations

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Cited by:
  1. Wolfgang Lechthaler, 2006. "The Interaction of Firing Costs and Firm Training," University of St. Gallen Department of Economics working paper series 2006, Department of Economics, University of St. Gallen 2006-01, Department of Economics, University of St. Gallen.
  2. Michael Gerfin, 2003. "Firm-sponsored Work-Related Training in Frictional Labour Markets: An empirical analysis for Switzerland," Diskussionsschriften, Universitaet Bern, Departement Volkswirtschaft dp0317, Universitaet Bern, Departement Volkswirtschaft.
  3. Claudia Burgard & Katja Görlitz, 2011. "Continuous Training, Job Satisfaction and Gender – An Empirical Analysis Using German Panel Data," Ruhr Economic Papers, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen 0265, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  4. Benoit Dostie & Marie-Pierre Pelletier, 2007. "Les rendements de la formation en entreprise," Canadian Public Policy, University of Toronto Press, vol. 33(1), pages 21-40, March.
  5. Michael Beckmann & Grit Muehler & Bernd Schauenberg, 2007. "The Returns to Continuous Training in Germany: New Evidence from Propensity Score Matching Estimators," Working papers, Faculty of Business and Economics - University of Basel 2007/04, Faculty of Business and Economics - University of Basel.
  6. Lang, Julia, 2012. "The aims of lifelong learning: Age-related effects of training on wages and job security," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62073, Verein für Socialpolitik / German Economic Association.
  7. Burgert, Derik, 2006. "Betriebliche Weiterbildung und der Verbleib Älterer im Betrieb," MPRA Paper 5742, University Library of Munich, Germany.
  8. Travkin, Pavel, 2014. "The impact of the on-the-job training on Russian worker’s salary: The effect of abilities approach," Applied Econometrics, Publishing House "SINERGIA PRESS", Publishing House "SINERGIA PRESS", vol. 33(1), pages 51-70.
  9. Anja Kuckulenz & Michael Maier, 2006. "Heterogeneous Returns to Training, An Analysis with German Data Using Local Instrumental Variables," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 226(1), pages 24-40, January.
  10. Julia Lang, 2012. "The Aims of Lifelong Learning: Age-Related Effects of Training on Wages and Job Security," SOEPpapers on Multidisciplinary Panel Data Research 478, DIW Berlin, The German Socio-Economic Panel (SOEP).
  11. Gerfin, Michael, 2004. "Firm-Sponsored General Training in Frictional Labour Markets: An Empirical Analysis for Switzerland," IZA Discussion Papers 1077, Institute for the Study of Labor (IZA).
  12. Pavel V. Travkin, 2014. "The Returns To Training In Russia: A Difference-In-Differences Analysis," HSE Working papers, National Research University Higher School of Economics WP BRP 56/EC/2014, National Research University Higher School of Economics.

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