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Training, wages and employment security: an empirical analysis on European data

  • Andrea Bassanini

Data from the European Community Household Panel (ECHP) are used to assess the effects of employee training on the average wage and employment security of different labour market groups in EU countries. Significant training wage premia are found only in the case of young or highly educated employees. By contrast training appears to have a strong impact on employment security, measured through subjective measures, in the case of both older and low-educated workers. To reconcile this apparent contradiction, one needs to take into account that, as standard in the literature, wage premia are estimated on a truncated sample including only employed workers. Due to downward wage rigidity, those workers who are unable to maintain their productivity are more frequently laid-off - rather than experiencing a wage fall and be retained in employment - and thereby excluded from the sample.

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Article provided by Taylor & Francis Journals in its journal Applied Economics Letters.

Volume (Year): 13 (2006)
Issue (Month): 8 ()
Pages: 523-527

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Handle: RePEc:taf:apeclt:v:13:y:2006:i:8:p:523-527
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  1. Agell, Jonas & Lommerud, Kjell Erik, 1997. "Minimum wages and the incentives for skill formation," Journal of Public Economics, Elsevier, vol. 64(1), pages 25-40, April.
  2. Denis FOUGÈRE & Dominique GOUX & Éric MAURIN, 2001. "Formation continue et carrières salariales. Une évaluation sur données individuelles," Annales d'Economie et de Statistique, ENSAE, issue 62, pages 49-69.
  3. Andrew E. Clark & Fabien Postel-Vinay, 2004. "Job security and job protection," DELTA Working Papers 2004-16, DELTA (Ecole normale supérieure).
  4. Paul Sicilian & Adam Grossberg, 2001. "Investment in human capital and gender wage differences: evidence from the NLSY," Applied Economics, Taylor & Francis Journals, vol. 33(4), pages 463-471.
  5. Parent, D., 1995. "Wages and Mobility: the Impact of Employer-Provided Training," Cahiers de recherche 9507, Universite de Montreal, Departement de sciences economiques.
  6. Michael Gerfin, 2003. "Firm-sponsored Work-Related Training in Frictional Labour Markets: An empirical analysis for Switzerland," Diskussionsschriften dp0317, Universitaet Bern, Departement Volkswirtschaft.
  7. Martin, John P. & Grubb, David, 2001. "What works and for whom: a review of OECD countries' experiences with active labour market policies," Working Paper Series 2001:14, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  8. Alison L. Booth & Mark L. Bryan, 2005. "Testing Some Predictions of Human Capital Theory: New Training Evidence from Britain," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 391-394, May.
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