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Intra-firm Wage Compression and Cost Coverage of Training: Evidence from Linked Employer-Employee Data

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  • Pfeifer, Christian

Abstract

This paper uses German linked employer-employee data in order to estimate the impact of intra-firm wage dispersion on the probability that firms pay for continuous training. About half of all firms in the estimation sample cover all direct and indirect training costs, which contradicts the standard human capital approach with perfect labor markets. The main finding of my cross-section, panel, and instrumental variable Probit estimations is that firms with larger intra-firm wage compression are indeed more likely to cover all direct and indirect training costs, which is consistent with theoretical considerations of the "new training literature" about imperfect labor markets.

Suggested Citation

  • 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.
    • Handle: RePEc:zbw:vfsc13:80030
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training

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