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Men at Work in a Land Down‐Under: Testing Some Predictions of Human Capital Theory

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  • Alison L. Booth
  • Pamela Katic

Abstract

We use new training data from waves 3–6 of the Household, Income and Labour Dynamics in Australia Survey to investigate training and wages of full-time men. We explore the extent to which the data are consistent with the predictions of human capital theory or with recent alternative theories based on imperfectly competitive labour markets. According to the raw data, most work‐related training received by full‐time private‐sector men is general, but it is also paid for by employers. Our fixed effects estimates reveal that this training is associated with higher wages in current and in future firms, and that the effect in future firms is larger and more precisely determined. These results are more consistent with the predictions of human capital theory based on imperfectly competitive labour markets than with the alternative of perfect competition.

Suggested Citation

  • Alison L. Booth & Pamela Katic, 2011. "Men at Work in a Land Down‐Under: Testing Some Predictions of Human Capital Theory," British Journal of Industrial Relations, London School of Economics, vol. 49(1), pages 1-24, March.
  • Handle: RePEc:bla:brjirl:v:49:y:2011:i:1:p:1-24
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    File URL: http://hdl.handle.net/10.1111/j.1467-8543.2009.00766.x
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    References listed on IDEAS

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    1. Loewenstein, Mark A & Spletzer, James R, 1998. "Dividing the Costs and Returns to General Training," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 142-171, January.
    2. Wiji Arulampalam & Alison L. Booth & Mark L. Bryan, 2004. "Training in Europe," Journal of the European Economic Association, MIT Press, pages 346-360.
    3. Francis Green & Stephen Machin & David Wilkinson, 1999. "Trade Unions and Training Practices in British Workplaces," ILR Review, Cornell University, ILR School, vol. 52(2), pages 179-195, January.
    4. Paul W. Miller, 1994. "Gender Discrimination in Training: An Australian Perspective," British Journal of Industrial Relations, London School of Economics, vol. 32(4), pages 539-564, December.
    5. Lynch, Lisa M, 1992. "Private-Sector Training and the Earnings of Young Workers," American Economic Review, American Economic Association, vol. 82(1), pages 299-312, March.
    6. Stevens, Margaret, 1994. "A Theoretical Model of On-the-Job Training with Imperfect Competition," Oxford Economic Papers, Oxford University Press, vol. 46(4), pages 537-562, October.
    7. Joan R. Rodgers, 2004. "Hourly Wages of full-time and part-time employees in Australia," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 7(2), pages 231-254, June.
    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. Alison L. Booth & Mark L. Bryan, 2005. "Testing Some Predictions of Human Capital Theory: New Training Evidence from Britain," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 391-394, May.
    10. 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).
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    Cited by:

    1. Hinz, Tina & Mohrenweiser, Jens, 2017. "The Effect of Regional Competition and Company-sponsored Training on the Productivity-Wage Wedge," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168292, Verein für Socialpolitik / German Economic Association.
    2. Sylvi Rzepka & Marcus Tamm, 2016. "Local employer competition and training of workers," Applied Economics, Taylor & Francis Journals, vol. 48(35), pages 3307-3321, July.
    3. Görlitz, Katja & Rzepka, Sylvi, 2014. "Does regional training supply determine employees' training participation?," Discussion Papers 2014/9, Free University Berlin, School of Business & Economics.
    4. Alison L. Booth & Pamela Katic, 2011. "Estimating the Wage Elasticity of Labour Supply to a Firm: What Evidence is there for Monopsony?," The Economic Record, The Economic Society of Australia, vol. 87(278), pages 359-369, September.
    5. Ruud Gerards & Andries de Grip & Maaike Witlox, 2014. "'Employability-miles' and worker employability awareness," Applied Economics, Taylor & Francis Journals, vol. 46(9), pages 952-965, March.
    6. repec:spr:anresc:v:59:y:2017:i:1:d:10.1007_s00168-017-0831-8 is not listed on IDEAS
    7. Allen, J.P. & van der Velden, R.K.W., 2012. "Skills for the 21st century: implications for education," Research Memorandum 043, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    8. C. Waddoups, 2011. "Firm Size and Work-Related Training: New Evidence on Incidence, Intensity, and Training Type from Australia," Journal of Labor Research, Springer, vol. 32(4), pages 390-413, December.

    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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