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Work-Related Training and Wages: An empirical analysis for male workers in Switzerland

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  • Michael Gerfin

Abstract

Work-related training is considered to be very important for providing the workforce with the necessary skills for maintaining and enhancing the competitiveness of the firms and the economy. On the individual level, the primary effect of training should be an increased productivity of the trained workers. This paper provides estimates of the effects of training on wages which can be seen as a lower bound for the effects on productivity. Based on panel data from the Swiss Labour Force Survey (SLFS) I estimate these effects using nonparametric matching methods. Training is measured either as firm-sponsored training or as any work-related training. The data show that multiple participation in work-related training is not a rare event. This complicates the analysis considerably because the evaluation of dynamic treatments is not yet fully developed. As a solution to this problem a heuristic difference-in-differences approach to estimate the incremental effect of further training events is used. The results clearly indicate that it is important to account for multiple training events. Taken together, there are significant effects of work-related training on wages of roughly 2% for each training event. There is some evidence that workers who already have high earnings profit more from continuous work-related training

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Bibliographic Info

Paper provided by Universitaet Bern, Departement Volkswirtschaft in its series Diskussionsschriften with number dp0316.

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Date of creation: Oct 2003
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Handle: RePEc:ube:dpvwib:dp0316

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Keywords: Training; Wages; Nonparametric Matching;

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References

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  1. Booth, Alison L & Zoega, Gylfi, 2001. "Is Wage Compression a Necessary Condition for Firm-Financed General Training?," CEPR Discussion Papers 2845, C.E.P.R. Discussion Papers.
  2. Joshua Angrist & Alan Krueger, 1998. "Empirical Strategies in Labor Economics," Working papers 98-7, Massachusetts Institute of Technology (MIT), Department of Economics.
  3. Acemoglu, Daron & Pischke, Jorn-Steffen, 1999. "Beyond Becker: Training in Imperfect Labour Markets," Economic Journal, Royal Economic Society, vol. 109(453), pages F112-42, February.
  4. 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.
  5. Jorn-Steffen Pischke, 1996. "Continuous Training in Germany," NBER Working Papers 5829, National Bureau of Economic Research, Inc.
  6. Michael Gerfin, 2003. "Firm-sponsored Work-Related Training in Frictional Labour Markets: An empirical analysis for Switzerland," Diskussionsschriften dp0317, Universitaet Bern, Departement Volkswirtschaft.
  7. Daron Acemoglu & Jorn-Steffen Pischke, 1998. "The Structure of Wages and Investment in General Training," NBER Working Papers 6357, National Bureau of Economic Research, Inc.
  8. John M. Barron & Mark C. Berger & Dan A. Black, 1999. "Do Workers Pay for On-The-Job Training?," Journal of Human Resources, University of Wisconsin Press, vol. 34(2), pages 235-252.
  9. Ruth Miquel, 2003. "Identification of Effects of Dynamic Treatments with a Difference-in-Differences Approach," University of St. Gallen Department of Economics working paper series 2003 2003-06, Department of Economics, University of St. Gallen.
  10. Groot, Wim, 1995. "The Wage Effects of Investments in Enterprise-Related Training," Empirical Economics, Springer, vol. 20(1), pages 133-47.
  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 537-62, October.
  12. Heckman, James J & Ichimura, Hidehiko & Todd, Petra E, 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 605-54, October.
  13. Michael LECHNER, 1999. "The Effects of Enterprise-Related Training in East Germany on Individual Employment and Earnings," Annales d'Economie et de Statistique, ENSAE, issue 55-56, pages 97-128.
  14. John M. Barron & Mark C. Berger & Dan A. Black, 1997. "On-the-Job Training," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number ojt.
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Cited by:
  1. Wolfgang Lechthaler, 2006. "The Interaction of Firing Costs and Firm Training," University of St. Gallen Department of Economics working paper series 2006 2006-01, Department of Economics, University of St. Gallen.
  2. Benoit Dostie & Marie-Pierre Pelletier, 2007. "Les rendements de la formation en entreprise," Canadian Public Policy, University of Toronto Press, vol. 33(1), pages 21-40, March.
  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. Gerfin, Michael, 2004. "Firm-Sponsored General Training in Frictional Labour Markets: An Empirical Analysis for Switzerland," IZA Discussion Papers 1077, Institute for the Study of Labor (IZA).
  5. Burgert, Derik, 2006. "Betriebliche Weiterbildung und der Verbleib Älterer im Betrieb," MPRA Paper 5742, University Library of Munich, Germany.
  6. Anja Kuckulenz & Michael Maier, 2006. "Heterogeneous Returns to Training, An Analysis with German Data Using Local Instrumental Variables," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 226(1), pages 24-40, January.
  7. Travkin, Pavel, 2014. "The impact of the on-the-job training on Russian worker’s salary: The effect of abilities approach," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 33(1), pages 51-70.
  8. Claudia Burgard & Katja Görlitz, 2011. "Continuous Training, Job Satisfaction and Gender: An Empirical Analysis Using German Panel Data," SOEPpapers on Multidisciplinary Panel Data Research 394, DIW Berlin, The German Socio-Economic Panel (SOEP).
  9. Pavel V. Travkin, 2014. "The Returns To Training In Russia: A Difference-In-Differences Analysis," HSE Working papers WP BRP 56/EC/2014, National Research University Higher School of Economics.
  10. Julia Lang, 2012. "The Aims of Lifelong Learning: Age-Related Effects of Training on Wages and Job Security," SOEPpapers on Multidisciplinary Panel Data Research 478, DIW Berlin, The German Socio-Economic Panel (SOEP).
  11. Michael Gerfin, 2003. "Firm-sponsored Work-Related Training in Frictional Labour Markets: An empirical analysis for Switzerland," Diskussionsschriften dp0317, Universitaet Bern, Departement Volkswirtschaft.
  12. Lang, Julia, 2012. "The aims of lifelong learning: Age-related effects of training on wages and job security," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62073, Verein für Socialpolitik / German Economic Association.

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