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The Impact of Training on Earnings: Differences Between Participant Groups and Training Forms

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  • Kuckulenz, Anja
  • Zwick, Thomas

Abstract

While there is a broad literature on the general wage effect of training, little is known about the effects of different training forms and about the effects for heterogeneous training participants. This study therefore adds two aspects to the literature on earnings effects of training. First, the earnings effect of training is calculated for different ?types? of employees, i.e. discriminating between qualification level, experience, job tenure, and other attributes. Second, we distinguish between the earnings impact of external and internal training. For our analysis, we use the ?Qualification and Career survey?, a rich German data set with information on 0.1 percent of all individuals employed in Germany in 1998/1999. We use a one-step full-information maximum likelihood and a two stage least squares estimation to regress the impact of training participation on earnings correcting for the endogeneity of training participation. By using a broad list of employee and employer characteristics, we try to avoid omitted variable bias. We find the training earnings markup to be positively correlated with qualification and experience. The analysis of internal and external training reveals that this result is driven by external training only. Internal training does not have a significant earnings effect. The correction for selection into training leads to an increase in the training coefficients and a decrease of its significance. --

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Bibliographic Info

Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 03-57.

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Date of creation: 2003
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Handle: RePEc:zbw:zewdip:1379

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Related research

Keywords: continuing training; returns to training; endogeneity; employee heterogeneity; training forms;

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Cited by:
  1. Grit Muehler & Michael Beckmann & Bernd Schauenberg, 2007. "The returns to continuous training in Germany: new evidence from propensity score matching estimators," Review of Managerial Science, Springer, vol. 1(3), pages 209-235, November.
  2. Haelermans Carla & Borghans Lex, 2011. "Wage effects of on-the-job training. A meta-analysis," ROA Research Memorandum 011, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  3. Budría, Santiago & Pereira, Pedro T., 2004. "On the Returns to Training in Portugal," IZA Discussion Papers 1429, Institute for the Study of Labor (IZA).
  4. Addison, John T. & Belfield, Clive R., 2007. "Unions, training and firm performance," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 40(4), pages 361-381.
  5. Ammermueller, Andreas & Kuckulenz, Anja & Zwick, Thomas, 2009. "Aggregate unemployment decreases individual returns to education," Economics of Education Review, Elsevier, vol. 28(2), pages 217-226, April.
  6. 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.
  7. Kuckulenz, Anja, 2006. "Continuing Vocational Training in Germany: A Comparative Study Using 3 German Data Set," ZEW Discussion Papers 06-24, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  8. Benoît Mahy & Mélanie Volral, 2010. "Firm Training and Labour Demand in Belgium: Do Productivity Dominate Cost Effects?," DULBEA Working Papers 10-08, ULB -- Universite Libre de Bruxelles.
  9. repec:iab:iabzaf:v:40:i:4:p:361-381 is not listed on IDEAS
  10. 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.
  11. 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.
  12. Thomas Zwick & Anja Kuckulenz, 2004. "Heterogeneous Returns to Training in Personal Services," Working Papers of the Research Group Heterogenous Labor 04-10, Research Group Heterogeneous Labor, University of Konstanz/ZEW Mannheim.
  13. Anna Ruzik-Sierdzinska & Claudia Villosio & Michele Belloni & Maciej Lis & Monika Potoczna, 2013. "Age and productivity. Human Capital Accumulation and Depreciation," CASE Network Reports 0114, CASE-Center for Social and Economic Research.
  14. Ludwig, Volker & Pfeiffer, Friedhelm, 2005. "Abschreibungsraten allgemeiner und beruflicher Ausbildungsinhalte," ZEW Discussion Papers 05-36, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  15. 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.

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