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Training subsidies and the wage returns to continuing vocational training

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

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.

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Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 19 (2012)
Issue (Month): 3 ()
Pages: 361-372

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Handle: RePEc:eee:labeco:v:19:y:2012:i:3:p:361-372
Contact details of provider: Web page: http://www.elsevier.com/locate/labeco

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