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Wages and Mobility: The Impact of Employer-Provided Training

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  • Daniel Parent

Abstract

Using data from the National Longitudinal Survey of Youth (NLSY) for the period spanning the years 1979-1991, this essay examines the impact of employer-provided formal training on the wage profile and on the mobility of young Americans making their transition to the labor market. By exploiting the longitudinal aspect of the data set, we are able to provide some control for unobserved individual and job-match heterogeneity by making use of the methodology proposed by Altonji and Shakotko (ReStud '87). The results show that (i) training with the current employer has a statistically and economically significant positive effect on the wage; (ii) employers seem to reward skills acquired through training with previous employers as much as skills they provide themselves; (iii) workers undergoing training have 18 percent lower starting salaries than other workers; this result is obtained by setting up a starting wage equation and by making use of a variable called on-the-job training still in progress at the time of the interview; (iv) with a hazard model which makes use of multiple employment spells by the same worker (thereby allowing the implementation of fixed-effects methods akin to the conditional logit method), skills acquired through formal training programs provided by the current employer seem to be fairly specific. The upshot from these results is that formal on-the-job-training in the current job contains both a general component which the employer rewards up to its market value and a specific component which reduces mobility while not being rewarded. En utilisant des données américaines du National Longitudinal Survey of Youth (NLSY), cette étude s'attarde à examiner l'impact de la formation dispensée par l'employeur sur le profil salarial ainsi que sur la mobilité des jeunes travailleurs faisant leur entrée sur le marché du travail. En exploitant l'aspect longitudinal de l'échantillon de façon à tenir compte de l'hétérogénéité non observée, les résultats montrent (i) un impact économiquement et statistiquement significatif de la formation sur le salaire dans l'emploi courant, (ii) un impact substantiel sur le salaire de la formation acquise avec les employeurs précédents, (iii) une réduction d'environ 18% du salaire de départ pour les travailleurs en formation, et (iv) par un modèle de durée qui tient compte des épisodes multiples d'emploi (permettant alors l'utilisation de méthodes de type effets fixes ), un degré substantiel de spécificité du capital humain acquis par le biais de programmes de formation dispensés par l'employeur. La conclusion à tirer de ces résultats est que le capital humain acquis contient à la fois une composante générale rémunérée également par tous les employeurs ainsi qu'une composante spécifique qui réduit la mobilité tout en n'étant pas rémunérée.

Suggested Citation

  • Daniel Parent, 1995. "Wages and Mobility: The Impact of Employer-Provided Training," CIRANO Working Papers 95s-27, CIRANO.
  • Handle: RePEc:cir:cirwor:95s-27
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    More about this item

    Keywords

    Training; Wage profile; Mobility of workers; Formation ; Profil salarial ; Mobilité des travailleurs;
    All these keywords.

    JEL classification:

    • 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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