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The Returns to Continuous Training in Germany: New Evidence from Propensity Score Matching Estimators

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  • Muehler, Grit
  • Beckmann, Michael
  • Schauenberg, Bernd

Abstract

The present paper examines the wage effects of continuous training programs using individual-level data from the German Socio Economic Panel (GSOEP). In order to account for selectivity in training participation we estimate average treatment effects (ATE and ATT) of general and firm-specific continuous training programs using several state-of-the-art propensity score matching (PSM) estimators. Additionally, we also apply a combined matching difference-indifferences (MDiD) estimator to account for unobserved individual characteristics (e.g. motivation, ability). While the estimated ATE and ATT for general training are significant ranging between about 4 and 7.5 %, the corresponding wage effects of firm-specific training are mostly insignificant. Using the more appropriate MDiD estimator, however, we find a more precise and highly significant wage effect of about 5 to 6 %, though only for general training and not for firm-specific training. These results are consistent with standard human capital theory insofar as general training is associated with larger wage increases than firm-specific training. Furthermore, we conclude that firms may intend to use specific training to adjust to new job requirements, while career-relevant changes may be conditioned to general training. --

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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 07-048.

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Date of creation: 2007
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Handle: RePEc:zbw:zewdip:5874

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Keywords: Continuous training; wage effect; average treatment effect; selectivity bias; propensity score matching estimators;

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Cited by:
  1. 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).
  2. Kathrin Armbruster & Michael Beckmann, 2010. "Business environment, managerial strategies, and the allocation of decision-making authorities in Swiss Firms," Working papers, Faculty of Business and Economics - University of Basel 2010/06, Faculty of Business and Economics - University of Basel.
  3. 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.
  4. Katja Görlitz, 2010. "Continuous Training and Wages – An Empirical Analysis Using a Comparison-group Approach," Ruhr Economic Papers, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen 0197, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  5. Dieter Kuhn, 2011. "Delayering and Firm Performance: Evidence from Swiss firm-level Data," Working papers, Faculty of Business and Economics - University of Basel 2011/02, Faculty of Business and Economics - University of Basel.
  6. 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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