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The effects of wage compression on training: Swedish empirical evidence

  • Ericson, Thomas

    ()

    (School of Economics and Commercial Law at Göteborg University, Department of Economics)

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    This paper investigates the relation between workers’ on-the-job training activities and the degree of wage compression in their occupation. With respect to general training – as opposed to firm-specific training – human capital theory implies that the worker initiates and finances the training when there is a negative relationship. A positive relation between general training and wage compression, on the other hand, shows that the employer pays for and benefits from training. The empirical results show that the intensity of general training in Sweden decreases with wage compression. The paper also reveals differences between men and women.

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    File URL: http://www.ifau.se/upload/pdf/se/2004/wp04-15.pdf
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    Paper provided by IFAU - Institute for Evaluation of Labour Market and Education Policy in its series Working Paper Series with number 2004:15.

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    Length: 39 pages
    Date of creation: 23 Nov 2004
    Date of revision:
    Publication status: Published in Applied Economics Letters, 2008, pages 165-169.
    Handle: RePEc:hhs:ifauwp:2004_015
    Contact details of provider: Postal: IFAU, P O Box 513, SE-751 20 Uppsala, Sweden
    Phone: (+46) 18 - 471 70 70
    Fax: (+46) 18 - 471 70 71
    Web page: http://www.ifau.se/
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    1. Hashimoto, Masanori, 1981. "Firm-Specific Human Capital as a Shared Investment," American Economic Review, American Economic Association, vol. 71(3), pages 475-82, June.
    2. repec:iza:izadps:dp is not listed on IDEAS
    3. Acemoglu, D. & Pischke, J.S., 1997. "The Structure of Wages and Investment in General Training," Working papers 97-24, Massachusetts Institute of Technology (MIT), Department of Economics.
    4. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-75, June.
    5. Giorgio Brunello, 2002. "Is Training more Frequent when Wage Compression is Higher? Evidence from 11 European Countries," CESifo Working Paper Series 637, CESifo Group Munich.
    6. Arulampalam, Wiji & Booth, Alison L. & Bryan, Mark L., 2003. "Training in Europe," IZA Discussion Papers 933, Institute for the Study of Labor (IZA).
    7. John M. Barron & Mark C. Berger & Dan A. Black, 1997. "On-the-Job Training," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number ojt, March.
    8. Lynch, Lisa M, 1992. "Private-Sector Training and the Earnings of Young Workers," American Economic Review, American Economic Association, vol. 82(1), pages 299-312, March.
    9. Filipe Almeida-Santos & Karen Mumford, 2005. "Employee Training And Wage Compression In Britain," Manchester School, University of Manchester, vol. 73(3), pages 321-342, 06.
    10. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 70, pages 9.
    11. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January.
    12. Chang, Chun & Wang, Yijiang, 1996. "Human Capital Investment under Asymmetric Information: The Pigovian Conjecture Revisited," Journal of Labor Economics, University of Chicago Press, vol. 14(3), pages 505-19, July.
    13. Barron, John M & Black, Dan A & Loewenstein, Mark A, 1987. "Employer Size: The Implications for Search, Training, Capital Investment, Starting Wages, and Wage Growth," Journal of Labor Economics, University of Chicago Press, vol. 5(1), pages 76-89, January.
    14. 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).
    15. Chiang, Shih-Chen & Chiang, Shin-Hwan, 1990. "Sharing the Cost of Investment in General Training," Australian Economic Papers, Wiley Blackwell, vol. 29(55), pages 266-72, December.
    16. Katz, Eliakim & Ziderman, Adrian, 1990. "Investment in General Training: The Role of Information and Labour Mobility," Economic Journal, Royal Economic Society, vol. 100(403), pages 1147-58, December.
    17. 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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