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Training, Wages and Employment Security: An Empirical Analysis on European Data

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  • Andrea Bassanini

    () (OECD and EPEE)

Abstract

We use data from the European Community Household Panel (ECHP) to assess the effects of employee training on the individual labour market performance of different labour market groups in EU countries. We find significant training rage premia only in the case of young or highly educated employees. By contrast training appears to have a strong impact on employment security in the case of both older and low-educated workers. To reconcile this apparent contradiction, we need to take into account that, as standard in the literature, wage premia are estimated on a troncated sample including only employed workers. Due to downward wage rigidity, those workers who are unable to maintain their prociuctivity are more frequently laid—off rather than experiencing a wage fall and be retained in employment and thereby excluded from our sample.

Suggested Citation

  • Andrea Bassanini, 2005. "Training, Wages and Employment Security: An Empirical Analysis on European Data," Documents de recherche 05-04, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
  • Handle: RePEc:eve:wpaper:05-04
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    File URL: http://epee.univ-evry.fr/RePEc/2005/05-04.pdf
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    References listed on IDEAS

    as
    1. Andrew Clark & Fabien Postel-Vinay, 2009. "Job security and job protection," Oxford Economic Papers, Oxford University Press, pages 207-239.
    2. 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.
    3. Michael Gerfin, 2003. "Firm-sponsored Work-Related Training in Frictional Labour Markets: An empirical analysis for Switzerland," Diskussionsschriften dp0317, Universitaet Bern, Departement Volkswirtschaft.
    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. Denis Fougère & Dominique Goux & Éric Maurin, 2001. "Formation continue et carrières salariales. Une évaluation sur données individuelles," Annals of Economics and Statistics, GENES, pages 49-69.
    6. Parent, Daniel, 1999. "Wages and Mobility: The Impact of Employer-Provided Training," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 298-317, April.
    7. 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, pages 391-394.
    8. Agell, Jonas & Lommerud, Kjell Erik, 1997. "Minimum wages and the incentives for skill formation," Journal of Public Economics, Elsevier, pages 25-40.
    9. Denis Fougère & Dominique Goux & Eric Maurin, 1998. "Formation continue et carrières salariales. Une évaluation sur données individuelles," Working Papers 98-43, Center for Research in Economics and Statistics.
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    Citations

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    Cited by:

    1. Benoit Dostie & Pierre Thomas Léger, 2014. "Firm-Sponsored Classroom Training: Is It Worth It for Older Workers?," Canadian Public Policy, University of Toronto Press, vol. 40(4), pages 377-390, December.
    2. Huasheng Zhu & Junwei Feng & Maojun Wang & Fan Xu, 2017. "Sustaining Regional Advantages in Manufacturing: Skill Accumulation of Rural–Urban Migrant Workers in the Coastal Area of China," Sustainability, MDPI, Open Access Journal, vol. 9(1), pages 1-23, January.
    3. Nicola Brandt, 2015. "Vocational training and adult learning for better skills in France," OECD Economics Department Working Papers 1260, OECD Publishing.
    4. repec:dau:papers:123456789/7243 is not listed on IDEAS
    5. 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.
    6. repec:ces:ifodic:v:4:y:2006:i:4:p:14567440 is not listed on IDEAS
    7. Luc Behaghel & Eve Caroli & Muriel Roger, 2014. "Age-biased Technical and Organizational Change, Training and Employment Prospects of Older Workers," Economica, London School of Economics and Political Science, pages 368-389.

    More about this item

    Keywords

    training wage premia; job security; wage compression; ECHP;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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