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Recent Investments in Human Capital and its Effect on the Chances of Escaping from Low-paid Jobs: The Spanish Case

Author

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  • BLÁZQUEZ CUESTA, Maite

    () (Department of Economics. UNIVERSIDAD AUTÓNOMA DE MADRID)

  • RAMOS RODRIGO, José

    () (Department of Economics and Business. UNIVERSIDAD EUROPEA DE MADRID)

Abstract

General education and training are major forces determining earnings. According to the human capital model, wage differentials among individuals over the life-cycle are largely the result of different patterns of investment in human capital. This paper is intended to analyze the effects of recent investments in human capital – general education, vocational/training or language courses - on workers’ relative earnings and on the probability of making an upwards transition in the earnings distribution. The analysis is done for Spain, using the European Community Household Panel (1995-2001). Our results reveal that having been recently in education or training (mainly vocational/training courses) significantly increases the probability of escaping from low pay to better paid jobs, while decreases the risk of falling into low-wage employment. Furthermore, this positive effect is significantly higher among those workers with a third level of general education completed. A separate analysis for females also reveals these positive returns of recent investments in human capital relative earnings, although in this case they appear to be none statistically significant La educación y la formación son dos de los factores más importantes a la hora de determinar las ganancias salariales de un trabajador. De acuerdo con el modelo de capital humano, las diferencias salariales entre individuos a lo largo del ciclo vital son en gran medida el resultado de diferentes patrones en la inversión de capital humano. En este artículo tratamos de analizar los efectos de inversiones recientes en capital humano – educación general, cursos de formación específica o cursos de idiomas – sobre las ganancias salariales relativas, y sobre la probabilidad de ascender dentro de la distribución salarial. El análisis se hace para el caso de España utilizando los datos de la Encuesta de Panel de Hogares de la Unión Europea (1995-2001). Los resultados ponen de manifiesto que inversiones recientes en capital humano (principalmente cursos de formación específica) aumentan de manera significativa la probabilidad de salir de un empleo de salarios bajos hacia trabajos mejor remunerados, reduciendo al mismo tiempo la probabilidad de caer en un empleo de salarios bajos. Además, este efecto positivo es significativamente mayor entre aquellos trabajadores que han completado estudios terciarios. Por último, un análisis separado para hombres y mujeres revela que estos rendimientos positivos de inversiones recientes en capital humano resultan no ser estadísticamente significativos para el caso de las mujeres.

Suggested Citation

  • BLÁZQUEZ CUESTA, Maite & RAMOS RODRIGO, José, 2008. "Recent Investments in Human Capital and its Effect on the Chances of Escaping from Low-paid Jobs: The Spanish Case," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 26, pages 161-180, Agosto.
  • Handle: RePEc:lrk:eeaart:26_2_9
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    References listed on IDEAS

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    More about this item

    Keywords

    Education; on-the-job training; low pay; bivariate probit/Educación; formación específica; empleo de salarios bajos; probit bivariante;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • 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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