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Continuous Training and Wages – An Empirical Analysis Using a Comparison-group Approach

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  • Katja Görlitz

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Abstract

Using German linked employer-employee data, this paper investigates the impact of on-the-job training on wages. The applied estimation technique was fi rst introduced by Leuven and Oosterbeek (2008). The idea is to compare wages of employees who intended to participate in training but did not do so because of a random event with wages of training participants. The estimated wage returns are statistically insignifi - cant. Furthermore, the decision to participate in training is associated with sizeable selection eff ects. On average, participants have a wage advantage of more than 4% compared to non-participants.

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Bibliographic Info

Paper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen in its series Ruhr Economic Papers with number 0197.

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Length: 23 pages
Date of creation: Jul 2010
Date of revision:
Handle: RePEc:rwi:repape:0197

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Keywords: Continuous training; wage returns; selection effect;

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References

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  1. Konings, Jozef & Vanormelingen, Stijn, 2009. "The Impact of Training on Productivity and Wages: Firm Level Evidence," CEPR Discussion Papers 7473, C.E.P.R. Discussion Papers.
  2. Groot, Wim & van den Brink, Henriette Maassen, 2003. "Firm-related training tracks: a random effects ordered probit model," Economics of Education Review, Elsevier, vol. 22(6), pages 581-589, December.
  3. 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.
  4. Lorraine Dearden & Howard Reed & John Van Reenen, 2006. "The Impact of Training on Productivity and Wages: Evidence from British Panel Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 68(4), pages 397-421, 08.
  5. Goux, Dominique & Maurin, Eric, 2000. "Returns to firm-provided training: evidence from French worker-firm matched data1," Labour Economics, Elsevier, vol. 7(1), pages 1-19, January.
  6. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier.
  7. Bassanini, Andrea & Booth, Alison L. & Brunello, Giorgio & De Paola, Maria & Leuven, Edwin, 2005. "Workplace Training in Europe," IZA Discussion Papers 1640, Institute for the Study of Labor (IZA).
  8. Robert Jäckle & Oliver Himmler, 2010. "Health and Wages: Panel Data Estimates Considering Selection and Endogeneity," Journal of Human Resources, University of Wisconsin Press, vol. 45(2).
  9. Conti, Gabriella, 2005. "Training, productivity and wages in Italy," Labour Economics, Elsevier, vol. 12(4), pages 557-576, August.
  10. Parent, D., 1995. "Wages and Mobility: the Impact of Employer-Provided Training," Cahiers de recherche 9507, Universite de Montreal, Departement de sciences economiques.
  11. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 70, pages 9.
  12. Ichino, Andrea & Winter-Ebmer, Rudolf, 1999. "Lower and upper bounds of returns to schooling: An exercise in IV estimation with different instruments," European Economic Review, Elsevier, vol. 43(4-6), pages 889-901, April.
  13. Stephen H. Bell & Larry l. Orr & John D. Blomquist & Glen G. Cain, 1995. "Program Applicants as a Comparison Group in Evaluating Training Programs: Theory and a Test," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number pacg.
  14. Arulampalam, Wiji & Booth, Alison L, 2001. "Learning and Earning: Do Multiple Training Events Pay? A Decade of Evidence from a Cohort of Young British Men," Economica, London School of Economics and Political Science, vol. 68(271), pages 379-400, August.
  15. Jorn-Steffen Pischke, 1996. "Continuous Training in Germany," NBER Working Papers 5829, National Bureau of Economic Research, Inc.
  16. Gartner, Hermann, 2005. "The imputation of wages above the contribution limit with the German IAB employment sample," FDZ Methodenreport 200502_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  17. Anja Kuckulenz, 2006. "Wage and Productivity Effect of Continuing Training in Germany : A Sectoral Analysis," Working Papers of the Research Group Heterogenous Labor 06-06, Research Group Heterogeneous Labor, University of Konstanz/ZEW Mannheim.
  18. Kuckulenz, Anja, 2006. "Wage and Productivity Effect of Continuing Training in Germany: A Sectoral Analysis," ZEW Discussion Papers 06-25, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  19. Edwin Leuven & Hessel Oosterbeek, 2008. "An alternative approach to estimate the wage returns to private-sector training," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 23(4), pages 423-434.
  20. William Greene, 2004. "Fixed Effects and Bias Due to the Incidental Parameters Problem in the Tobit Model," Econometric Reviews, Taylor & Francis Journals, vol. 23(2), pages 125-147.
  21. Wim Groot, 1999. "Productivity effects of enterprise-related training," Applied Economics Letters, Taylor & Francis Journals, vol. 6(6), pages 369-371.
  22. Mark A. Loewenstein & James R. Spletzer, 1999. "General and Specific Training: Evidence and Implications," Journal of Human Resources, University of Wisconsin Press, vol. 34(4), pages 710-733.
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Cited by:
  1. M. Picchio & J. C. Van Ours, 2011. "Retaining through Training Even for Older Workers," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 11/748, Ghent University, Faculty of Economics and Business Administration.
  2. Görlitz, Katja & Tamm, Marcus, 2012. "Revisiting the Complementarity between Education and Training: The Role of Personality, Working Tasks and Firm Effects," IZA Discussion Papers 6278, Institute for the Study of Labor (IZA).

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