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

  • Grit Muehler

    ()

  • Michael Beckmann

    ()

  • Bernd Schauenberg

    ()

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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File URL: http://hdl.handle.net/10.1007/s11846-007-0014-6
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Article provided by Springer in its journal Review of Managerial Science.

Volume (Year): 1 (2007)
Issue (Month): 3 (November)
Pages: 209-235

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Handle: RePEc:spr:rvmgts:v:1:y:2007:i:3:p:209-235
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