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Training subsidies and the wage returns to continuing vocational training

Author

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  • Brunello, Giorgio
  • Comi, Simona Lorena
  • Sonedda, Daniela

Abstract

We use the regional and time variation of training grants in Italy to identify the causal effect of (formal continuing vocational) training on earnings. We estimate log-linear earnings regressions with constant marginal returns to training and find that one additional week of training increases monthly net earnings by 1.36%, substantially less than the 3% or more often found in the literature. Estimated returns vary significantly by firm size, and range from 0.40% in firms with more than 100 employees to 2.51% in smaller firms, the bulk of the Italian private sector. A simple back of the envelope comparison of the marginal costs and benefits of training policy suggests that the latter are higher than the former.

Suggested Citation

  • Brunello, Giorgio & Comi, Simona Lorena & Sonedda, Daniela, 2012. "Training subsidies and the wage returns to continuing vocational training," Labour Economics, Elsevier, vol. 19(3), pages 361-372.
  • Handle: RePEc:eee:labeco:v:19:y:2012:i:3:p:361-372
    DOI: 10.1016/j.labeco.2012.03.002
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    Cited by:

    1. Görlitz, Katja & Rzepka, Sylvi, 2014. "Does regional training supply determine employees' training participation?," Discussion Papers 2014/9, Free University Berlin, School of Business & Economics.
    2. Belan, Pascal & Chéron, Arnaud, 2014. "Turbulence, training and unemployment," Labour Economics, Elsevier, vol. 27(C), pages 16-29.
    3. repec:spr:anresc:v:59:y:2017:i:1:d:10.1007_s00168-017-0831-8 is not listed on IDEAS
    4. Francis Green & Alan Felstead & Duncan Gallie & Hande Inanc & Nick Jewson, 2016. "The Declining Volume of Workers’ Training in Britain," British Journal of Industrial Relations, London School of Economics, vol. 54(2), pages 422-448, June.
    5. repec:eee:joecag:v:6:y:2015:i:c:p:113-122 is not listed on IDEAS

    More about this item

    Keywords

    Returns to training; Training subsidies;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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