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On the Returns to Training in Portugal

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Author Info
Budría, Santiago () (University of Madeira and CEEAplA)
Pereira, Pedro Telhado (University of Madeira, CEPR, CEEAplA and IZA Bonn)

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Abstract

This paper investigates the earnings effects of training in the Portuguese labour market. We use the Portuguese Labour Force Survey to classify training according to multiple criteria, including providing institution, purpose, duration, and content of the training activity. First, we establish some stylised facts about the extent and determinants of different types of training. We find that there are major differences in training participation across groups, with elder, low educated workers participating substantially less. Second, we measure the wage effects of training. We find that in Portugal returns to training are large and significant. The estimated coefficients are about 12% in the case of men and 37% in the case of women. We show that discriminating between gender, education level, experience, the public and the private sector, and industrial activity reveals important differences across categories of workers. Workers with low qualifications and long professional experience earn larger returns. On average, women receive larger returns than men, though they are subject to greater variation across education and experience groups. The average effect of training is similar in the private sector and in the public sector. Experience in the private sector and education in the public sector are key determinants of the returns to training. Further, training to improve current skills and training in a firm attract largest returns. Third, the paper investigates whether and to what extent training participation affects the probability of entering and leaving unemployment. We find that being trained does not affect significantly the transition probabilities.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1429.

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Length: 45 pages
Date of creation: Dec 2004
Date of revision:
Handle: RePEc:iza:izadps:dp1429

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Related research
Keywords: returns to training; selection bias; logistic regression;

Other versions of this item:

Find related papers by JEL classification:
J7 - Labor and Demographic Economics - - Labor Discrimination
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
I2 - Health, Education, and Welfare - - Education

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References listed on IDEAS
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. Wooseok Ok & Peter Tergeist, 2003. "Improving Workers' Skills: Analytical Evidence and the Role of the Social Partners," OECD Social, Employment and Migration Working Papers 10, OECD, Directorate for Employment, Labour and Social Affairs. [Downloadable!]
  2. Telhado Pereira, Pedro & Silva Martins, Pedro, 2002. "Is there a return-risk link in education?," Economics Letters, Elsevier, vol. 75(1), pages 31-37, March. [Downloadable!] (restricted)
    Other versions:
  3. Jörn-Steffen Pischke, 2001. "Continuous training in Germany," Journal of Population Economics, Springer, vol. 14(3), pages 523-548. [Downloadable!] (restricted)
    Other versions:
  4. Lee, Lung-Fei, 1983. "Generalized Econometric Models with Selectivity," Econometrica, Econometric Society, vol. 51(2), pages 507-12, March. [Downloadable!] (restricted)
  5. Lynch, Lisa M, 1992. "Private-Sector Training and the Earnings of Young Workers," American Economic Review, American Economic Association, vol. 82(1), pages 299-312, March.
  6. Anja Kuckulenz & Thomas Zwick, 2003. "The Impact of Training on Earnings : differences between Participant Groups and Training Forms," Working Papers of the Research Group Heterogenous Labor 03-06, Research Group Heterogeneous Labor, University of Konstanz/ZEW Mannheim. [Downloadable!]
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  7. Vieira, Jose A. C., 1999. "Returns to education in Portugal," Labour Economics, Elsevier, vol. 6(4), pages 535-541, November. [Downloadable!] (restricted)
  8. D. Klepinger & S. Lundberg & R. Plotnick, . "Instrument selection: The case of teenage childbearing and women's educational attainment," Institute for Research on Poverty Discussion Papers 1077-95, University of Wisconsin Institute for Research on Poverty. [Downloadable!]
  9. Arulampalam, Wiji & Booth, Alison L. & Bryan, Mark L., 2003. "Training in Europe," IZA Discussion Papers 933, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  10. James J. Heckman, 1999. "Policies to Foster Human Capital," NBER Working Papers 7288, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  11. Lisa M. Lynch & Sandra E. Black, 1998. "Beyond the incidence of employer-provided training," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 52(1), pages 64-81, October.
  12. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May. [Downloadable!] (restricted)
  13. Rita Asplund, 2004. "The Provision and Effects of Company Training. A brief review of the literature," Discussion Papers 907, The Research Institute of the Finnish Economy. [Downloadable!]
  14. Booth, Alison L. & Bryan, Mark L., 2002. "Who Pays for General Training? New Evidence for British Men and Women," IZA Discussion Papers 486, Institute for the Study of Labor (IZA). [Downloadable!]
  15. Zwick, Thomas, 2002. "Continuous Training and Firm Productivity in Germany," ZEW Discussion Papers 02-50, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  16. Brunello, Giorgio, 2001. "On the Complementarity between Education and Training in Europe," IZA Discussion Papers 309, Institute for the Study of Labor (IZA). [Downloadable!]
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. Budria, Santiago & Nunes, Celso, 2005. "Education and Wage Inequality in Portugal," MPRA Paper 1099, University Library of Munich, Germany. [Downloadable!]
  2. Uschi Backes-Gellner & Johannes Mure & Simone Tuor, 2006. "The Puzzle of Non-Participation in Continuing Training – An Empirical Study of Permanent vs. Occasional Non-Participation," Working Papers 0058, University of Zurich, Institute for Strategy and Business Economics (ISU). [Downloadable!]
    Other versions:
  3. Ang Boon Heng & Park Cheolsung & Liu Haoming & Shandre M. Thangavelu & James Wong, 2006. "The Impact of Structured Training on Workers’ Employability and Productivity," SCAPE Policy Research Working Paper Series 0702, National University of Singapore, Department of Economics, SCAPE. [Downloadable!]
  4. Muehler, Grit & Beckmann, Michael & Schauenberg, Bernd, 2007. "The Returns to Continuous Training in Germany: New Evidence from Propensity Score Matching Estimators," ZEW Discussion Papers 07-048, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
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