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Train to gain – The benefits of employee-financed training in Germany

Author

Listed:
  • Harald U. Pfeifer

    () (Federal Institute for Vocational Education and Training, Bonn)

Abstract

Individual returns on continuing vocational training have been in the focus of many empirical and theoretical papers. Most of the works do not explicitly discuss returns to training that is financed fully or partly by the employee. This seems surprising since several publicly funded programs to increase training participation aim at a stronger employee involvement in the financing of continuing vocational training. This paper analyses the participation in and the determinants and effects of employee-financed training using German panel data. The question is addressed, which employees invest and which benefit from training. Results show that employee-investment in training yields only moderate wage returns and has no significant impact on the further career development, especially when compared to the effects of enterprise-financed training. On the other hand, employees financing their own training gain in terms of unemployment risk reduction and the improvement in the matching of individual skills and job requirements.

Suggested Citation

  • Harald U. Pfeifer, 2008. "Train to gain – The benefits of employee-financed training in Germany," Economics of Education Working Paper Series 0037, University of Zurich, Department of Business Administration (IBW).
  • Handle: RePEc:iso:educat:0037
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    File URL: http://repec.business.uzh.ch/RePEc/iso/leadinghouse/0037_lhwpaper.pdf
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    References listed on IDEAS

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    Cited by:

    1. Rosa Aisa & María A. Gonzalez-Alvarez & Gemma Larramona, 2016. "The Role of Gender in Further Training for Spanish Workers: Are Employers Making a Difference?," Feminist Economics, Taylor & Francis Journals, vol. 22(3), pages 154-182, July.

    More about this item

    Keywords

    Human Capital; Skills; Occupational Choice; Labor Productivity;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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