IDEAS home Printed from https://ideas.repec.org/a/cpp/issued/v40y2014i4p377-390.html
   My bibliography  Save this article

Firm-Sponsored Classroom Training: Is It Worth It for Older Workers?

Author

Listed:
  • Benoit Dostie
  • Pierre Thomas Léger

Abstract

We use longitudinal linked employer-employee data and find that the probability of participating in firm-sponsored classroom training diminishes with age. Although the standard human capital investment model predicts such a decline, we also consider the possibility that the wage and productivity impacts of training decline with age. Taking into account endogenous training decisions, we find that the training wage premium diminishes only slightly with age. However, estimates of the impact of training on productivity decrease dramatically with age, suggesting that incentives for firms to invest in classroom training are much lower for older workers.

Suggested Citation

  • Benoit Dostie & Pierre Thomas Léger, 2014. "Firm-Sponsored Classroom Training: Is It Worth It for Older Workers?," Canadian Public Policy, University of Toronto Press, vol. 40(4), pages 377-390, December.
  • Handle: RePEc:cpp:issued:v:40:y:2014:i:4:p:377-390
    DOI: 10.3138/cpp.2013-071
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.3138/cpp.2013-071
    Download Restriction: access restricted to subscribers

    File URL: https://libkey.io/10.3138/cpp.2013-071?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Picchio, Matteo & van Ours, Jan C., 2013. "Retaining through training even for older workers," Economics of Education Review, Elsevier, vol. 32(C), pages 29-48.
    2. Almeida, Rita & Carneiro, Pedro, 2009. "The return to firm investments in human capital," Labour Economics, Elsevier, vol. 16(1), pages 97-106, January.
    3. 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.
    4. Thomas Zwick, 2005. "Continuing Vocational Training Forms and Establishment Productivity in Germany," German Economic Review, Verein für Socialpolitik, vol. 6(2), pages 155-184, May.
    5. Stephen Bond & Måns Söderbom, 2005. "Adjustment Costs and the Identification of Cobb Douglas Production Functions," Economics Papers 2005-W04, Economics Group, Nuffield College, University of Oxford.
    6. Jozef Konings & Stijn Vanormelingen, 2015. "The Impact of Training on Productivity and Wages: Firm-Level Evidence," The Review of Economics and Statistics, MIT Press, vol. 97(2), pages 485-497, May.
    7. Andrea Bassanini, 2006. "Training, wages and employment security: an empirical analysis on European data," Applied Economics Letters, Taylor & Francis Journals, vol. 13(8), pages 523-527.
    8. Lorraine Dearden & Howard Reed & John Van Reenen, 2006. "The Impact of Training on Productivity and Wages: Evidence from British Panel Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 68(4), pages 397-421, August.
    9. Abowd, John M. & Kramarz, Francis, 1999. "The analysis of labor markets using matched employer-employee data," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 40, pages 2629-2710, Elsevier.
    10. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4, National Bureau of Economic Research, Inc.
    11. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    12. Göbel, Christian & Zwick, Thomas, 2009. "Age and productivity: evidence from linked employer employee data," ZEW Discussion Papers 09-020, ZEW - Leibniz Centre for European Economic Research.
    13. 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.
    14. Zwick, Thomas, 2003. "The Impact of ICT Investment on Establishment Productivity," National Institute Economic Review, Cambridge University Press, vol. 184, pages 99-110, April.
    15. Richard Blundell & Stephen Bond, 2000. "GMM Estimation with persistent panel data: an application to production functions," Econometric Reviews, Taylor & Francis Journals, vol. 19(3), pages 321-340.
    16. 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.
    17. Bartel, Ann P & Lichtenberg, Frank R, 1987. "The Comparative Advantage of Educated Workers in Implementing New Technology," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 1-11, February.
    18. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341.
    19. Andrea Bassanini, 2006. "Training, wages and employment security," Post-Print halshs-00120488, HAL.
    20. Ana Cardoso & Paulo Guimarães & José Varejão, 2011. "Are Older Workers Worthy of Their Pay? An Empirical Investigation of Age-Productivity and Age-Wage Nexuses," De Economist, Springer, vol. 159(2), pages 95-111, June.
    21. Harley Frazis & Mark A. Loewenstein, 2005. "Reexamining the Returns to Training: Functional Form, Magnitude, and Interpretation," Journal of Human Resources, University of Wisconsin Press, vol. 40(2).
    22. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, June.
    23. Yuriy Gorodnichenko, 2007. "Using Firm Optimization to Evaluate and Estimate Returns to Scale," NBER Working Papers 13666, National Bureau of Economic Research, Inc.
    24. Ana Sofia Lopes & Paulino Teixeira, 2013. "Productivity, wages, and the returns to firm-provided training: fair shared capitalism?," International Journal of Manpower, Emerald Group Publishing, vol. 34(7), pages 776-793, November.
    25. Conti, Gabriella, 2005. "Training, productivity and wages in Italy," Labour Economics, Elsevier, vol. 12(4), pages 557-576, August.
    26. Barron, John M & Black, Dan A & Loewenstein, Mark A, 1989. "Job Matching and On-the-Job Training," Journal of Labor Economics, University of Chicago Press, vol. 7(1), pages 1-19, January.
    27. Harley Frazis & Maury Gittleman & Mary Joyce, 2000. "Correlates of Training: An Analysis Using Both Employer and Employee Characteristics," ILR Review, Cornell University, ILR School, vol. 53(3), pages 443-462, April.
    28. 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.
    29. Black, Sandra E & Lynch, Lisa M, 1996. "Human-Capital Investments and Productivity," American Economic Review, American Economic Association, vol. 86(2), pages 263-267, May.
    30. Ackerberg, Daniel & Caves, Kevin & Frazer, Garth, 2006. "Structural identification of production functions," MPRA Paper 38349, University Library of Munich, Germany.
    31. Abowd, John M. & Kramarz, Francis, 1999. "Econometric analyses of linked employer-employee data," Labour Economics, Elsevier, vol. 6(1), pages 53-74, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wen Ci & Michelle Laing & Marcel Voia & Christopher Worswick, 2020. "Immigrant earnings returns to post‐migration education: Evidence for Canada, 1999–2013," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(4), pages 1599-1617, November.
    2. Ci, Wen & Galdo, José & Voia, Marcel & Worswick, Christopher, 2013. "Does adult training benefit Canadian workers?," CLSSRN working papers clsrn_admin-2013-42, Vancouver School of Economics, revised 26 Sep 2013.
    3. Boockmann, Bernhard & Fries, Jan & Göbel, Christian, 2018. "Specific measures for older employees and late career employment," The Journal of the Economics of Ageing, Elsevier, vol. 12(C), pages 159-174.
    4. Vandenberghe, V., 2013. "Are firms willing to employ a greying and feminizing workforce?," Labour Economics, Elsevier, vol. 22(C), pages 30-46.
    5. Göbel, Christian & Zwick, Thomas, 2013. "Are personnel measures effective in increasing productivity of old workers?," Labour Economics, Elsevier, vol. 22(C), pages 80-93.
    6. Wen Ci & Jose Galdo & Marcel Voia & Christopher Worswick, 2015. "Wage returns to mid-career investments in job training through employer supported course enrollment: evidence for Canada," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-25, December.
    7. Fang, Tony & Gunderson, Morley & Lee, Byron, 2021. "Can Older Workers Be Retrained? Canadian Evidence from Worker-Firm Linked Data," IZA Discussion Papers 14282, Institute of Labor Economics (IZA).
    8. N Renuga Nagarajan & Mineko Wada & Mei Lan Fang & Andrew Sixsmith, 2019. "Defining organizational contributions to sustaining an ageing workforce: a bibliometric review," European Journal of Ageing, Springer, vol. 16(3), pages 337-361, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Benoit Dostie, 2011. "Wages, Productivity and Aging," De Economist, Springer, vol. 159(2), pages 139-158, June.
    2. Jozef Konings & Stijn Vanormelingen, 2015. "The Impact of Training on Productivity and Wages: Firm-Level Evidence," The Review of Economics and Statistics, MIT Press, vol. 97(2), pages 485-497, May.
    3. Almeida, Rita & Carneiro, Pedro, 2009. "The return to firm investments in human capital," Labour Economics, Elsevier, vol. 16(1), pages 97-106, January.
    4. Morikawa, Masayuki, 2021. "Employer-provided training and productivity: Evidence from a panel of Japanese Firms," Journal of the Japanese and International Economies, Elsevier, vol. 61(C).
    5. Elena Feltrinelli & Roberto Gabriele & Sandro Trento, 2013. "Do middle managers matter?," DEM Discussion Papers 2013/11, Department of Economics and Management.
    6. François Rycx & Yves Saks & Ilan Tojerow, 2015. "Does Education Raise Productivity and Wages Equally? The Moderating Roles of Age, Gender and Industry," Working Paper Research 281, National Bank of Belgium.
    7. 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.
    8. Pfeifer, Christian & Janssen, Simon & Yang, Philip & Backes-Gellner, Uschi, 2011. "Effects of Training on Employee Suggestions and Promotions in an Internal Labor Market," IZA Discussion Papers 5671, Institute of Labor Economics (IZA).
    9. Benedikte Bjerge & Nina Torm & Neda Trifkovic, 2016. "Gender matters: Private sector training in Vietnamese SMEs," WIDER Working Paper Series 149, World Institute for Development Economic Research (UNU-WIDER).
    10. Maliranta, Mika & Asplund, Rita, 2007. "Training and Hiring Strategies to Improve Firm Performance," Discussion Papers 1105, The Research Institute of the Finnish Economy.
    11. 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).
    12. Carmichael, Fiona & Ercolani, Marco & Kang, Lili & Maimaiti, Yasheng & O'Mahony, Mary & Peng, Fei & Robinson, Catherine, 2009. "Training, education and productivity," MPRA Paper 39899, University Library of Munich, Germany.
    13. Hinz, Tina & Mohrenweiser, Jens, 2017. "The Effect of Regional Competition and Company-sponsored Training on the Productivity-Wage Wedge," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168292, Verein für Socialpolitik / German Economic Association.
    14. Yanick Labrie & Claude Montmarquette, 2005. "La formation qualifiante et transférable en milieu de travail," CIRANO Project Reports 2005rp-04, CIRANO.
    15. Picchio, Matteo & van Ours, Jan C., 2013. "Retaining through training even for older workers," Economics of Education Review, Elsevier, vol. 32(C), pages 29-48.
    16. repec:zbw:rwirep:0197 is not listed on IDEAS
    17. Bernhard Mahlberg & Inga Freund & Alexia Prskawetz, 2013. "Ageing, productivity and wages in Austria: sector level evidence," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 40(4), pages 561-584, November.
    18. Henrik Hansen & S Kanayade & John Rand & Neda Trifkovic, 2021. "Workplace training in Myanmar: Determinants and wage returns," DERG working paper series 21-10, University of Copenhagen. Department of Economics. Development Economics Research Group (DERG).
    19. Yao, Yao & Liu, Gordon G. & Cui, Yujie, 2020. "Job training and organizational performance: Analyses from medical institutions in China," China Economic Review, Elsevier, vol. 60(C).
    20. Dostie Benoit & Jayaraman Rajshri, 2012. "Organizational Redesign, Information Technologies and Workplace Productivity," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-41, February.
    21. Görlitz, Katja, 2011. "Continuous training and wages: An empirical analysis using a comparison-group approach," Economics of Education Review, Elsevier, vol. 30(4), pages 691-701, August.

    More about this item

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpp:issued:v:40:y:2014:i:4:p:377-390. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://www.utpjournals.press/loi/cpp .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Iver Chong (email available below). General contact details of provider: https://www.utpjournals.press/loi/cpp .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.