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

  • Harald U. Pfeifer

    ()

    (Federal Institute for Vocational Education and Training, Bonn)

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.

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File URL: http://repec.business.uzh.ch/RePEc/iso/leadinghouse/0037_lhwpaper.pdf
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Paper provided by University of Zurich, Institute for Strategy and Business Economics (ISU) in its series Economics of Education Working Paper Series with number 0037.

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Length: 32 pages
Date of creation: Oct 2008
Date of revision:
Handle: RePEc:iso:educat:0037
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  1. Kuckulenz, Anja, 2006. "Wage and Productivity Effect of Continuing Training in Germany: A Sectoral Analysis," ZEW Discussion Papers 06-25, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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  6. Alison L. Booth & Marco Francesconi & Gylfi Zoega, 2003. "Unions, work-related training, and wages: Evidence for British men," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 57(1), pages 68-91, October.
  7. Pischke, Jörn-Steffen, 2000. "Continuous Training in Germany," IZA Discussion Papers 137, Institute for the Study of Labor (IZA).
  8. Daron Acemoglu & Jörn-Steffen Pischke, 2002. "Minimum Wages and On-the-Job Training," CEP Discussion Papers dp0527, Centre for Economic Performance, LSE.
  9. Daron Acemoglu & Joern-Steffen Pischke, 1998. "Beyond Becker: Training in Imperfect Labor Markets," Working papers 98-12, Massachusetts Institute of Technology (MIT), Department of Economics.
  10. 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.
  11. Edward P. Lazear, 2003. "Firm-Specific Human Capital: A Skill-Weights Approach," NBER Working Papers 9679, National Bureau of Economic Research, Inc.
  12. Anja Kuckulenz, 2006. "Wage and Productivity Effect of Continuing Training in Germany : A Sectoral Analysis," Working Papers of the Research Group Heterogenous Labor 06-06, Research Group Heterogeneous Labor, University of Konstanz/ZEW Mannheim.
  13. Lorraine Dearden & Howard Reed & John Van Reenen, 2005. "The Impact of Training on Productivity and Wages: Evidence from British Panel Data," CEP Discussion Papers dp0674, Centre for Economic Performance, LSE.
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  15. 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.
  16. Uschi Backes-Gellner & Johannes Mure, 2005. "The Skill-Weights Approach on Firm Specific Human Capital: Empirical Results for Germany," Working Papers 0056, University of Zurich, Institute for Strategy and Business Economics (ISU), revised Apr 2005.
  17. Brunello, Giorgio, 2001. "On the Complementarity between Education and Training in Europe," IZA Discussion Papers 309, Institute for the Study of Labor (IZA).
  18. Booth, Alison L. & Bryan, Mark L., 2002. "Who Pays for General Training? New Evidence for British Men and Women," IZA Discussion Papers 486, Institute for the Study of Labor (IZA).
  19. Booth, Alison L. & Francesconi, Marco & Zoega, Gylfi, 2002. "Oligopsony, Institutions and the Efficiency of General Training," IZA Discussion Papers 618, Institute for the Study of Labor (IZA).
  20. Michael Gerfin & Robert E. Leu & Reto Nyffeler, 2003. "Berufliche Weiterbildung in der Schweiz," Diskussionsschriften dp0318, Universitaet Bern, Departement Volkswirtschaft.
  21. Heckman, J.J. & Hotz, V.J., 1988. "Choosing Among Alternative Nonexperimental Methods For Estimating The Impact Of Social Programs: The Case Of Manpower Training," University of Chicago - Economics Research Center 88-12, Chicago - Economics Research Center.
  22. 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).
  23. Loewenstein, Mark A & Spletzer, James R, 1998. "Dividing the Costs and Returns to General Training," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 142-71, January.
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