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Continuous training and wages: An empirical analysis using a comparison-group approach

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Listed author(s):
  • Görlitz, Katja

Abstract

Using German linked employer-employee data, this paper investigates the short-term impact of on-the-job training on wages. The applied estimation approach was first introduced by Leuven and Oosterbeek (2008). Wages of employees who intended to participate in training but did not do so because of a random event are compared to wages of training participants. The estimated wage returns are statistically insignificant. Furthermore, the decision to participate in training is associated with sizeable selection effects. On average, participants have a wage advantage of more than 4% compared to non-participants.

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File URL: http://www.sciencedirect.com/science/article/pii/S0272775711000252
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Article provided by Elsevier in its journal Economics of Education Review.

Volume (Year): 30 (2011)
Issue (Month): 4 (August)
Pages: 691-701

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Handle: RePEc:eee:ecoedu:v:30:y:2011:i:4:p:691-701
Contact details of provider: Web page: http://www.elsevier.com/locate/econedurev

Keywords: Continuous training Wage returns Selection effect;

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Find related papers by 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

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  1. 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.
  2. Robert Jäckle & Oliver Himmler, 2010. "Health and Wages: Panel Data Estimates Considering Selection and Endogeneity," Journal of Human Resources, University of Wisconsin Press, vol. 45(2).
  3. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 70, pages 1-9.
  4. Jörn-Steffen Pischke, 2001. "Continuous training in Germany," Journal of Population Economics, Springer;European Society for Population Economics, vol. 14(3), pages 523-548.
  5. 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.
  6. Ichino, Andrea & Winter-Ebmer, Rudolf, 1999. "Lower and upper bounds of returns to schooling: An exercise in IV estimation with different instruments," European Economic Review, Elsevier, vol. 43(4-6), pages 889-901, April.
  7. 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).
  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, 08.
  9. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier.
  10. 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.
  11. Edwin Leuven & Hessel Oosterbeek, 2008. "An alternative approach to estimate the wage returns to private-sector training," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 23(4), pages 423-434.
  12. Conti, Gabriella, 2005. "Training, productivity and wages in Italy," Labour Economics, Elsevier, vol. 12(4), pages 557-576, August.
  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. Groot, Wim & van den Brink, Henriette Maassen, 2003. "Firm-related training tracks: a random effects ordered probit model," Economics of Education Review, Elsevier, vol. 22(6), pages 581-589, December.
  15. Anja Kuckulenz & Michael Maier, 2006. "Heterogeneous Returns to Training : an Analysis with German Data Using Local Instrumental Variables," Working Papers of the Research Group Heterogenous Labor 04-03, Research Group Heterogeneous Labor, University of Konstanz/ZEW Mannheim.
  16. Parent, Daniel, 1999. "Wages and Mobility: The Impact of Employer-Provided Training," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 298-317, April.
  17. Stephen H. Bell & Larry l. Orr & John D. Blomquist & Glen G. Cain, 1995. "Program Applicants as a Comparison Group in Evaluating Training Programs: Theory and a Test," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number pacg, June.
  18. Gérard Ballot & Fathi Fakhfakh & Erol Taymaz, 2006. "Who Benefits from Training and R&D, the Firm or the Workers?," British Journal of Industrial Relations, London School of Economics, vol. 44(3), pages 473-495, 09.
  19. 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.
  20. 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.
  21. Stefan Bender & Michael Fertig & Katja Görlitz & Martina Huber & Alexandra Schmucker, 2009. "WeLL – Unique Linked Employer-Employee Data on Further Training in Germany," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 129(4), pages 637-643.
  22. Wim Groot, 1999. "Productivity effects of enterprise-related training," Applied Economics Letters, Taylor & Francis Journals, vol. 6(6), pages 369-371.
  23. Gartner, Hermann, 2005. "The imputation of wages above the contribution limit with the German IAB employment sample," FDZ Methodenreport 200502_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  24. Mark A. Loewenstein & James R. Spletzer, 1999. "General and Specific Training: Evidence and Implications," Journal of Human Resources, University of Wisconsin Press, vol. 34(4), pages 710-733.
  25. William Greene, 2004. "Fixed Effects and Bias Due to the Incidental Parameters Problem in the Tobit Model," Econometric Reviews, Taylor & Francis Journals, vol. 23(2), pages 125-147.
  26. 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).
  27. Arulampalam, Wiji & Booth, Alison L, 2001. "Learning and Earning: Do Multiple Training Events Pay? A Decade of Evidence from a Cohort of Young British Men," Economica, London School of Economics and Political Science, vol. 68(271), pages 379-400, August.
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Cited by:

  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. Görlitz, Katja & Tamm, Marcus, 2016. "Information, financial aid and training participation: Evidence from a randomized field experiment," Discussion Papers 2016/6, Free University Berlin, School of Business & Economics.
  3. Christiane Hinerasky, 2014. "Advances in Training Evaluation - Psychological, Educational, Economic, and Econometric Perspectives on the Kirkpatrick Model," Working Papers Dissertations 14, Paderborn University, Faculty of Business Administration and Economics.
  4. Görlitz, Katja & Rzepka, Sylvi, 2014. "Does regional training supply determine employees' training participation?," Discussion Papers 2014/9, Free University Berlin, School of Business & Economics.
  5. Görlitz, Katja & Tamm, Marcus, 2011. "Revisiting the Complementarity between Education and Training – The Role of Personality, Working Tasks and Firm Effects," Ruhr Economic Papers 307, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
  6. Daniel Dietz & Thomas Zwick, 2016. "The retention effect of training – portability, visibility, and credibility," Economics of Education Working Paper Series 0113, University of Zurich, Department of Business Administration (IBW).
  7. Görlitz, Katja & Tamm, Marcus, 2015. "The pecuniary and non-pecuniary returns to voucher-financed training," Discussion Papers 2015/11, Free University Berlin, School of Business & Economics.
  8. Claudia Burgard & Katja Görlitz, 2011. "Continuous Training, Job Satisfaction and Gender – An Empirical Analysis Using German Panel Data," Ruhr Economic Papers 0265, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  9. repec:zbw:rwirep:0265 is not listed on IDEAS
  10. Ricardo Pagán-Rodríguez, 2015. "Disability, Training and Job Satisfaction," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 122(3), pages 865-885, July.
  11. Christiane Hinerasky & Rene Fahr & Sabine Simons, 2014. "Wage Returns of Company Training - Evidence from a Comparison Group Approach," Working Papers Dissertations 17, Paderborn University, Faculty of Business Administration and Economics.

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