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Are there asymmetries in the effects of training on the conditional male wage distribution

  • Arulampalam, Wiji
  • Booth, Alison L.
  • Bryan, Mark L.

We use a quantile regression framework to investigate the degree to which work-related training affects the location, scale and shape of the conditional wage distribution. Human capital theory suggests that the percentage returns to training investments will be the same across the conditional wage distribution. Other theories – whether based on imperfections in the labour market or on skill-mix heterogeneity – suggest that this need not be the case. Using the first six waves of the European Community Household Panel, we investigate these issues for private sector men in ten European Union countries. Our results show that, for the vast majority of countries, investment in training yields similar percentage returns across the conditional wage distribution. Only Belgium was an outlier in this respect. However, our results do indicate that there are considerable differences in mean returns to training across countries.

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Paper provided by Institute for Social and Economic Research in its series ISER Working Paper Series with number 2004-01.

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Date of creation: 01 Jan 2004
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Publication status: published
Handle: RePEc:ese:iserwp:2004-01
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  1. Alan Manning, 2010. "Imperfect competition in the labour market," LSE Research Online Documents on Economics 28729, London School of Economics and Political Science, LSE Library.
  2. Omar Arias & Kevin F. Hallock & Walter Sosa Escudero, 1999. "Individual Heterogeneity in the Returns to Schooling: Instrumental Variables Quantile Regression using Twins Data," Department of Economics, Working Papers 016, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata.
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  7. Wiji Arulampalam & Alison L. Booth & Mark L. Bryan, 2004. "Training in Europe," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 346-360, 04/05.
  8. Angel López-Nicolás & Jaume García & Pedro J. Hernández, 2001. "How wide is the gap? An investigation of gender wage differences using quantile regression," Empirical Economics, Springer, vol. 26(1), pages 149-167.
  9. Moshe Buchinsky, 1998. "Recent Advances in Quantile Regression Models: A Practical Guideline for Empirical Research," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 88-126.
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  11. Michael Lechner & Blaise Melly, 2007. "Earnings Effects of Training Programs," University of St. Gallen Department of Economics working paper series 2007 2007-28, Department of Economics, University of St. Gallen.
  12. Stevens, Margaret, 1994. "A Theoretical Model of On-the-Job Training with Imperfect Competition," Oxford Economic Papers, Oxford University Press, vol. 46(4), pages 537-62, October.
  13. Alberto Abadie & Joshua Angrist & Guido Imbens, 1999. "Instrumental Variables Estimates of the Effect of Subsidized Training on the Quantiles of Trainee Earnings," Working papers 99-16, Massachusetts Institute of Technology (MIT), Department of Economics.
  14. Arulampalam, S.W. & Booth, A. & Elias, P., 1995. "Work-Related Training and Earnings Growth for Young Men in Britain," The Warwick Economics Research Paper Series (TWERPS) 440, University of Warwick, Department of Economics.
  15. Acemoglu, Daron & Pischke, Jörn-Steffen, 1998. "The Structure of Wages and Investment in General Training," CEPR Discussion Papers 1833, C.E.P.R. Discussion Papers.
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  17. James J. Heckman & Jeffrey Smith & Nancy Clements, 1997. "Making The Most Out Of Programme Evaluations and Social Experiments: Accounting For Heterogeneity in Programme Impacts," Review of Economic Studies, Oxford University Press, vol. 64(4), pages 487-535.
  18. Bassanini, Andrea & Brunello, Giorgio, 2003. "Is Training More Frequent When Wage Compression is Higher? Evidence from the European Community Household Panel," IZA Discussion Papers 839, Institute for the Study of Labor (IZA).
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  20. Martins, Pedro S. & Pereira, Pedro T., 2004. "Does education reduce wage inequality? Quantile regression evidence from 16 countries," Labour Economics, Elsevier, vol. 11(3), pages 355-371, June.
  21. Bassanini, Andrea & Booth, Alison L. & Brunello, Giorgio & De Paola, Maria & Leuven, Edwin, 2005. "Workplace Training in Europe," IZA Discussion Papers 1640, Institute for the Study of Labor (IZA).
  22. Arulampalam, Wiji & Booth, Alison L, 2001. "Learning and Earning: Do Multiple Training Events Pay? A Decade of Evidence from a Cohort of Young British Men," Economica, London School of Economics and Political Science, vol. 68(271), pages 379-400, August.
  23. Moshe Buchinsky, 2001. "Quantile regression with sample selection: Estimating women's return to education in the U.S," Empirical Economics, Springer, vol. 26(1), pages 87-113.
  24. Booth,Alison L. & Snower,Dennis J. (ed.), 1996. "Acquiring Skills," Cambridge Books, Cambridge University Press, number 9780521479578, November.
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  27. Lisa M. Lynch, 1994. "Training and the Private Sector: International Comparisons," NBER Books, National Bureau of Economic Research, Inc, number lync94-1, Jan-Jun.
  28. Almeida, Rita K. & Carneiro, Pedro, 2006. "The Return to the Firm Investment in Human Capital," IZA Discussion Papers 1937, Institute for the Study of Labor (IZA).
  29. Booth, Alison L & Zoega, Gylfi, 1999. "Do Quits Cause Under-Training?," Oxford Economic Papers, Oxford University Press, vol. 51(2), pages 374-86, April.
  30. Xulia GonzÂlez & Daniel Miles, 2001. "Wage inequality in a developing country: decrease in minimum wage or increase in education returns," Empirical Economics, Springer, vol. 26(1), pages 135-148.
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  32. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
  33. Booth, Alison L, 1991. "Job-Related Formal Training: Who Receives It and What Is It Worth?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 53(3), pages 281-94, August.
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