IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/14262.html
   My bibliography  Save this paper

The Impact of Work-Related Training on Employee Earnings: Evidence from Great Britain

Author

Listed:
  • Panos, Sousounis

Abstract

Using data from the British Household Panel Survey for the years 1998-2005, this study estimates the impact of work-related training on earnings levels. Different measures for general and specific training are constructed from available information. The analysis diverges from the standard fixed effects framework for earnings determination modelling and presents evidence in support of the predictions of the standard human capital theory with regards to training sponsoring using a random effects formulation for the earnings equation suggested by Nijman and Verbeek (1992) for controlling for attrition bias in unbalanced panels.

Suggested Citation

  • Panos, Sousounis, 2009. "The Impact of Work-Related Training on Employee Earnings: Evidence from Great Britain," MPRA Paper 14262, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:14262
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/14262/1/MPRA_paper_14262.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Alison L. Booth & Marco Francesconi & Gylfi Zoega, 2003. "Unions, Work-Related Training, and Wages: Evidence for British Men," ILR Review, Cornell University, ILR School, vol. 57(1), pages 68-91, October.
    2. Loewenstein, Mark A & Spletzer, James R, 1998. "Dividing the Costs and Returns to General Training," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 142-171, January.
    3. Jeffrey M. Wooldridge, 2005. "Simple solutions to the initial conditions problem in dynamic, nonlinear panel data models with unobserved heterogeneity," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(1), pages 39-54, January.
    4. Chamberlain, Gary, 1984. "Panel data," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 22, pages 1247-1318, Elsevier.
    5. Booth, Alison L & Francesconi, Marco & Zoega, Gylfi, 1999. "Training, Rent-Sharing and Unions," CEPR Discussion Papers 2200, C.E.P.R. Discussion Papers.
    6. Daron Acemoglu & Jörn-Steffen Pischke, 1998. "Why Do Firms Train? Theory and Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(1), pages 79-119.
    7. Hashimoto, Masanori, 1981. "Firm-Specific Human Capital as a Shared Investment," American Economic Review, American Economic Association, vol. 71(3), pages 475-482, June.
    8. 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 1147-1158, December.
    9. Filipe Almeida‐Santos & Karen Mumford, 2005. "Employee Training And Wage Compression In Britain," Manchester School, University of Manchester, vol. 73(3), pages 321-342, June.
    10. Booth, Alison L. & Bryan, Mark L., 2002. "Who Pays for General Training? New Evidence for British Men and Women," IZA Discussion Papers 486, Institute of Labor Economics (IZA).
    11. Stevens, Margaret, 1994. "A Theoretical Model of On-the-Job Training with Imperfect Competition," Oxford Economic Papers, Oxford University Press, vol. 46(4), pages 537-562, October.
    12. Nijman, Theo & Verbeek, Marno, 1992. "Nonresponse in Panel Data: The Impact on Estimates of a Life Cycle Consumption Function," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 7(3), pages 243-257, July-Sept.
    13. Booth, Alison L, 1993. "Private Sector Training and Graduate Earnings," The Review of Economics and Statistics, MIT Press, vol. 75(1), pages 164-170, February.
    14. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," NBER Chapters, in: Investment in Human Beings, pages 9-49, National Bureau of Economic Research, Inc.
    15. Richard Blundell & Lorraine Dearden & Costas Meghir & Barbara Sianesi, 1999. "Human capital investment: the returns from education and training to the individual, the firm and the economy," Fiscal Studies, Institute for Fiscal Studies, vol. 20(1), pages 1-23, March.
    16. Melero Martín, Eduardo, 2004. "Evidence on Training and Career Paths: Human Capital, Information and Incentives," IZA Discussion Papers 1377, Institute of Labor Economics (IZA).
    17. Clifton, J., 1997. "Constraining Influences on the Decision to Participate in Training: The Importance of the Non-Work Environment," Papers 97-25, Cornell - Center for Advanced Human Resource Studies.
    18. Gershuny, Jonathan, 2005. "Busyness as the badge of honour for the new superordinate working class," ISER Working Paper Series 2005-09, Institute for Social and Economic Research.
    19. Francis Vella, 1998. "Estimating Models with Sample Selection Bias: A Survey," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 127-169.
    20. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
    21. 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.
    22. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66(4), pages 281-281.
    23. Vella, F. & Verbeek, M.J.C.M., 1994. "Two-step estimation of simultaneous equation panel data models with censored endogenous variables," Discussion Paper 1994-55, Tilburg University, Center for Economic Research.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Daria Luchinskaya & Peter Dickinson, 2019. "‘Virtuous’ and ‘Vicious’ Circles? Adults’ Participation in Different Types of Training in the UK and Its Association with Wages," Social Inclusion, Cogitatio Press, vol. 7(3), pages 177-201.
    2. Rita Almeida & Marta Faria, 2014. "The wage returns to on-the-job training: evidence from matched employer-employee data," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-33, December.
    3. Tamilina, Larysa & Tamilina, Natalya, 2013. "From Learning to Knowing: A Psychological-Neurological Approach to Explain the Human Capital Formation Process," MPRA Paper 63201, University Library of Munich, Germany.
    4. Siang, Liew & Noor, Zulridah, 2015. "The Impact of Training on the Conditional Wage Distribution in Selected Service Subsectors in Malaysia," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 49(1), pages 37-48.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Giorgio Brunello & Maria De Paola, 2004. "Market Failures and the Under-Provision of Training," CESifo Working Paper Series 1286, CESifo.
    2. Asplund, Rita, 2004. "The Provision and Effects of Company Training. A brief review of the literature," Discussion Papers 907, The Research Institute of the Finnish Economy.
    3. Cecilia ALBERT & Carlos GARCÍA-SERRANO & Virginia HERNANZ, 2010. "On-the-job training in Europe: Determinants and wage returns," International Labour Review, International Labour Organization, vol. 149(3), pages 315-341, September.
    4. Rita Asplund, 2005. "The Provision and Effects of Company Training: A Brief Review of the Literature," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 31, pages 47-73.
    5. Filipe Almeida-Santos & Karen Mumford, 2006. "Employee Training, Wage Dispersion and Equality in Britain," Discussion Papers 06/14, Department of Economics, University of York.
    6. Filipe Almeida-Santos & Yekaterina Chzhen & Karen Mumford, 2010. "Employee training and wage dispersion: white- and blue-collar workers in Britain," Research in Labor Economics, in: Jobs, Training, and Worker Well-being, pages 35-60, Emerald Group Publishing Limited.
    7. Yanick Labrie & Claude Montmarquette, 2005. "La formation qualifiante et transférable en milieu de travail," CIRANO Project Reports 2005rp-04, CIRANO.
    8. Dan A. Black & Lars Skipper & Jeffrey A. Smith & Jeffrey Andrew Smith, 2023. "Firm Training," CESifo Working Paper Series 10268, CESifo.
    9. Pfeifer, Christian & Janssen, Simon & Yang, Philip & Backes-Gellner, Uschi, 2010. "Training Participation of an Aging Workforce in an Internal Labor Market," Hannover Economic Papers (HEP) dp-447, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    10. Picchio, Matteo & van Ours, Jan C., 2013. "Retaining through training even for older workers," Economics of Education Review, Elsevier, vol. 32(C), pages 29-48.
    11. Picchio, Matteo & van Ours, Jan C., 2011. "Market imperfections and firm-sponsored training," Labour Economics, Elsevier, vol. 18(5), pages 712-722, October.
    12. Pfeifer, Christian, 2013. "Intra-firm Wage Compression and Cost Coverage of Training: Evidence from Linked Employer-Employee Data," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 80030, Verein für Socialpolitik / German Economic Association.
    13. Vilhuber, Lars, 2001. "La spécificité de la formation en milieu de travail : un survol des contributions théoriques et empiriques récentes," L'Actualité Economique, Société Canadienne de Science Economique, vol. 77(1), pages 133-167, mars.
    14. Christophe Muller & Christophe J. Nordman, 2017. "Wages and on-the-job training in Tunisia," Middle East Development Journal, Taylor & Francis Journals, vol. 9(2), pages 294-318, July.
    15. Marco Caliendo & Deborah A. Cobb-Clark & Cosima Obst & Helke Seitz & Arne Uhlendorff, 2022. "Locus of Control and Investment in Training," Journal of Human Resources, University of Wisconsin Press, vol. 57(4), pages 1311-1349.
    16. Bassanini, Andrea & Booth, Alison L. & Brunello, Giorgio & De Paola, Maria & Leuven, Edwin, 2005. "Workplace Training in Europe," IZA Discussion Papers 1640, Institute of Labor Economics (IZA).
    17. Michael Gerfin & Robert E. Leu & Reto Nyffeler, 2003. "Berufliche Weiterbildung in der Schweiz," Diskussionsschriften dp0318, Universitaet Bern, Departement Volkswirtschaft.
    18. C. Jeffrey Waddoups, 2014. "Union Membership and Job-Related Training: Incidence, Transferability, and Efficacy," British Journal of Industrial Relations, London School of Economics, vol. 52(4), pages 753-778, December.
    19. Anke S. Kessler & Christoph Lülfesmann, 2006. "The Theory of Human Capital Revisited: on the Interaction of General and Specific Investments," Economic Journal, Royal Economic Society, vol. 116(514), pages 903-923, October.
    20. Chao Fu, 2011. "Training, Search and Wage Dispersion," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 14(4), pages 650-666, October.

    More about this item

    Keywords

    work-related training; human capital; earnings;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:14262. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.