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The returns to continuous training in Germany: new evidence from propensity score matching estimators

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  • Grit Muehler

    ()

  • Michael Beckmann

    ()

  • Bernd Schauenberg

    ()

Abstract

The present paper examines the wage effects of continuous training programs using individual-level data from the German Socio Economic Panel (GSOEP). In order to account for selectivity in training participation we estimate average treatment effects (ATE and ATT) of general and firm-specific continuous training programs using several state-of-the-art propensity score matching (PSM) estimators. Additionally, we also apply a combined matching difference-indifferences (MDiD) estimator to account for unobserved individual characteristics (e.g. motivation, ability). While the estimated ATE and ATT for general training are significant ranging between about 4 and 7.5 %, the corresponding wage effects of firm-specific training are mostly insignificant. Using the more appropriate MDiD estimator, however, we find a more precise and highly significant wage effect of about 5 to 6 %, though only for general training and not for firm-specific training. These results are consistent with standard human capital theory insofar as general training is associated with larger wage increases than firm-specific training. Furthermore, we conclude that firms may intend to use specific training to adjust to new job requirements, while career-relevant changes may be conditioned to general training.
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Suggested Citation

  • 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.
  • Handle: RePEc:spr:rvmgts:v:1:y:2007:i:3:p:209-235 DOI: 10.1007/s11846-007-0014-6
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    Citations

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    Cited by:

    1. Dieter Kuhn, 2011. "Delayering and Firm Performance: Evidence from Swiss firm-level Data," Working papers 2011/02, Faculty of Business and Economics - University of Basel.
    2. Görlitz, Katja, 2011. "Continuous training and wages: An empirical analysis using a comparison-group approach," Economics of Education Review, Elsevier, vol. 30(4), pages 691-701, August.
    3. repec:zbw:rwirep:0197 is not listed on IDEAS
    4. Katja Görlitz, 2010. "Continuous Training and Wages – An Empirical Analysis Using a Comparison-group Approach," Ruhr Economic Papers 0197, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    5. Kathrin Armbruster & Michael Beckmann, 2010. "Business environment, managerial strategies, and the allocation of decision-making authorities in Swiss Firms," Working papers 2010/06, Faculty of Business and Economics - University of Basel.
    6. Julia Lang, 2012. "The Aims of Lifelong Learning: Age-Related Effects of Training on Wages and Job Security," SOEPpapers on Multidisciplinary Panel Data Research 478, DIW Berlin, The German Socio-Economic Panel (SOEP).
    7. Lang, Julia, 2012. "The aims of lifelong learning: Age-related effects of training on wages and job security," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62073, Verein für Socialpolitik / German Economic Association.
    8. Anna Ruzik-Sierdzinska & Claudia Villosio & Michele Belloni & Maciej Lis & Monika Potoczna, 2013. "Age and productivity. Human Capital Accumulation and Depreciation," CASE Network Reports 0114, CASE-Center for Social and Economic Research.
    9. 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.
    10. Roman, Monica & Popescu, Madalina Ecaterina, 2014. "The effects of training on Romanian migrants’ income: a propensity score matching approach," MPRA Paper 63251, University Library of Munich, Germany, revised Oct 2014.

    More about this item

    Keywords

    Continuous training; Wage effect; Average treatment effect; Selectivity bias; Propensity score matching estimators; Combined matching difference-in-differences estimator; C21; J24; J31; M53;

    JEL classification:

    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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