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Training, Wage Growth and Job Performance: Evidence From a Company Database

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  • Ann P. Bartel
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    Abstract

    This paper studies the relationships between on-the-job training, wages and job performance by using the personnel records of a large manufacturing firm. Utilizing a company database avoids the biases that generally result when individuals are unable to accurately recall the amount of training they received and/or when definitions of training vary across diverse firms. The main findings presented in this paper are: (1) Controlling for information on days spent in formal training programs reduces the returns to tenure by 18%; (2) First-difference models of wage growth which eliminate heterogeneity bias in wage levels show that training has a positive and significant effect on wage growth; (3) Fixed-effects models that control for heterogeneity bias in wage growth still find a positive and significant effect of training on wage growth; and (4) Training leads to an improvement in job performance, as measured by performance rating scores.

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    File URL: http://www.nber.org/papers/w4027.pdf
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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4027.

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    Date of creation: Mar 1992
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    Publication status: published as Journal of Labor Economics, VOlume 13, No. 3, July 1995, pp. 401-425
    Handle: RePEc:nbr:nberwo:4027

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    References

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    1. Lazear, Edward P, 1981. "Agency, Earnings Profiles, Productivity, and Hours Restrictions," American Economic Review, American Economic Association, vol. 71(4), pages 606-20, September.
    2. Jacob Mincer, 1988. "Job Training, Wage Growth, and Labor Turnover," NBER Working Papers 2690, National Bureau of Economic Research, Inc.
    3. Zvi Griliches & Jerry A. Hausman, 1984. "Errors in Variables in Panel Data," NBER Technical Working Papers 0037, National Bureau of Economic Research, Inc.
    4. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-90, October.
    5. Joanne Salop & Steve Salop, 1976. "Self-selection and turnover in the labor market," Special Studies Papers 80, Board of Governors of the Federal Reserve System (U.S.).
    6. Lisa M. Lynch, 1989. "Private Sector Training and its Impact on the Earnings of Young Workers," NBER Working Papers 2872, National Bureau of Economic Research, Inc.
    7. Salop, Joanne & Salop, Steven, 1976. "Self-Selection and Turnover in the Labor Market," The Quarterly Journal of Economics, MIT Press, vol. 90(4), pages 619-27, November.
    8. Barron, John M & Black, Dan A & Loewenstein, Mark A, 1989. "Job Matching and On-the-Job Training," Journal of Labor Economics, University of Chicago Press, vol. 7(1), pages 1-19, January.
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