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Costs and Revenues of Investment in Enterprise-Related Schooling


  • Groot, Wim
  • Hartog, Joop
  • Oosterbeek, Hessel


In this paper, a general specification of the wage equation is used to derive a marginal revenue equation for enterprise-related schooling. The optimal amount of investment in enterprise-related schooling is found by equating the marginal revenues and marginal costs. For the empirical analysis, the wage equation, the marginal costs equation, and the marginal revenue equation are estimated simultaneously. The empirical results show that both the marginal cost and the marginal benefits of training vary with a worker's level of ability. For a reference male who participates in enterprise-related schooling, the wage increase is about 34 percent of the average wage rate of participants. Copyright 1994 by Royal Economic Society.

Suggested Citation

  • Groot, Wim & Hartog, Joop & Oosterbeek, Hessel, 1994. "Costs and Revenues of Investment in Enterprise-Related Schooling," Oxford Economic Papers, Oxford University Press, vol. 46(4), pages 658-675, October.
  • Handle: RePEc:oup:oxecpp:v:46:y:1994:i:4:p:658-75

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    References listed on IDEAS

    1. Gronau, Reuben, 1988. "Sex-Related Wage Differentials and Women's Interrupted Labor Careers--The Chicken or the Egg," Journal of Labor Economics, University of Chicago Press, vol. 6(3), pages 277-301, July.
    2. Groot, W. & Ours, J.C., 1993. "Career interruptions and subsequent earnings : a case study for the Netherlands," Serie Research Memoranda 0079, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    3. Edin, P.A. & Nynabb, J., 1992. "Gender Wage Differentials and Interrupted Work Careers : Swedish Evidence," Papers 1992-17, Uppsala - Working Paper Series.
    4. Dickens, Richard, 1996. "The evolution of individual male earnings in Great Britain 1974-1994," LSE Research Online Documents on Economics 20647, London School of Economics and Political Science, LSE Library.
    5. Blau, Francine D & Kahn, Lawrence M, 1997. "Swimming Upstream: Trends in the Gender Wage Differential in 1980s," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 1-42, January.
    6. Abowd, John M & Card, David, 1989. "On the Covariance Structure of Earnings and Hours Changes," Econometrica, Econometric Society, vol. 57(2), pages 411-445, March.
    7. James W. Albrecht & Per-Anders Edin & Marianne Sundström & Susan B. Vroman, 1999. "Career Interruptions and Subsequent Earnings: A Reexamination Using Swedish Data," Journal of Human Resources, University of Wisconsin Press, vol. 34(2), pages 294-311.
    8. Dickens, Richard, 2000. "The Evolution of Individual Male Earnings in Great Britain: 1975-95," Economic Journal, Royal Economic Society, vol. 110(460), pages 27-49, January.
    9. Jacob Mincer & Haim Ofek, 1982. "Interrupted Work Careers: Depreciation and Restoration of Human Capital," Journal of Human Resources, University of Wisconsin Press, vol. 17(1), pages 3-24.
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    Cited by:

    1. Kazamaki Ottersten, Eugenia & Lindh, Thomas & Mellander, Erik, 1996. "Cost and Productivity Effects of Firm Financed Training," Working Paper Series 455, Research Institute of Industrial Economics.
    2. Klaus Waelde, 1996. "Lifetime learning, biased technological change and the evolution of wages in the U.S. 1960 - 1990," Labor and Demography 9601001, EconWPA.

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