Wage Returns of Company Training - Evidence from a Comparison Group Approach

We empirically evaluate wage returns to company training using representative individual-level cross-sectional data for the years 2000, 2003, and 2007. A comparison group approach allows comparing wages of participants with non-participants, who were willing to participate in training, yet were restrained out of random reasons. For training participants, we identify a 7.5% wage premium compared to non-participants, which vanishes once the comparison group is restricted to employees enrolled for training who finally declined participation. The results indicate that typically measured returns to training programs may in fact be returns to unobserved characteristics such as innate ability, personality or cognitive and non-cognitive skills.