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On the Returns to Training in Portugal

  • Budría, Santiago

    ()

    (University of Madeira)

  • Pereira, Pedro T.

    ()

    (University of Madeira)

This paper investigates the earnings effects of training in the Portuguese labour market. We use the Portuguese Labour Force Survey to classify training according to multiple criteria, including providing institution, purpose, duration, and content of the training activity. First, we establish some stylised facts about the extent and determinants of different types of training. We find that there are major differences in training participation across groups, with elder, low educated workers participating substantially less. Second, we measure the wage effects of training. We find that in Portugal returns to training are large and significant. The estimated coefficients are about 12% in the case of men and 37% in the case of women. We show that discriminating between gender, education level, experience, the public and the private sector, and industrial activity reveals important differences across categories of workers. Workers with low qualifications and long professional experience earn larger returns. On average, women receive larger returns than men, though they are subject to greater variation across education and experience groups. The average effect of training is similar in the private sector and in the public sector. Experience in the private sector and education in the public sector are key determinants of the returns to training. Further, training to improve current skills and training in a firm attract largest returns. Third, the paper investigates whether and to what extent training participation affects the probability of entering and leaving unemployment. We find that being trained does not affect significantly the transition probabilities.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1429.

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Length: 45 pages
Date of creation: Dec 2004
Date of revision:
Publication status: published as "The wage effects of training in Portugal: differences across skill groups, genders, sectors and training types" in: Applied Economics, 2007, 39 (6), 787-807
Handle: RePEc:iza:izadps:dp1429
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  1. Wooseok Ok & Peter Tergeist, 2003. "Improving Workers' Skills: Analytical Evidence and the Role of the Social Partners," OECD Social, Employment and Migration Working Papers 10, OECD Publishing.
  2. Jörn-Steffen Pischke, 2001. "Continuous training in Germany," Journal of Population Economics, Springer, vol. 14(3), pages 523-548.
  3. James J. Heckman, 2000. "Policies to Foster Human Capital," JCPR Working Papers 154, Northwestern University/University of Chicago Joint Center for Poverty Research.
  4. Pereira, Pedro T. & Martins, Pedro S., 2001. "Is there a Return-Risk Link in Education?," IZA Discussion Papers 321, Institute for the Study of Labor (IZA).
  5. Lee, Lung-Fei, 1983. "Generalized Econometric Models with Selectivity," Econometrica, Econometric Society, vol. 51(2), pages 507-12, March.
  6. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
  7. Arulampalam, Wiji & Booth, Alison L. & Bryan, Mark L., 2003. "Training in Europe," IZA Discussion Papers 933, Institute for the Study of Labor (IZA).
  8. Asplund, Rita, 2004. "The Provision and Effects of Company Training. A brief review of the literature," Discussion Papers 907, The Research Institute of the Finnish Economy.
  9. Zwick, Thomas, 2002. "Continuous Training and Firm Productivity in Germany," ZEW Discussion Papers 02-50, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  10. Brunello, Giorgio, 2001. "On the Complementarity between Education and Training in Europe," IZA Discussion Papers 309, Institute for the Study of Labor (IZA).
  11. Anja Kuckulenz & Thomas Zwick, 2003. "The Impact of Training on Earnings : differences between Participant Groups and Training Forms," Working Papers of the Research Group Heterogenous Labor 03-06, Research Group Heterogeneous Labor, University of Konstanz/ZEW Mannheim.
  12. D. Klepinger & S. Lundberg & R. Plotnick, . "Instrument selection: The case of teenage childbearing and women's educational attainment," Institute for Research on Poverty Discussion Papers 1077-95, University of Wisconsin Institute for Research on Poverty.
  13. 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).
  14. 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.
  15. Philip Trostel & Ian Walker, 2006. "Education and Work," Education Economics, Taylor & Francis Journals, vol. 14(4), pages 377-399.
  16. Vieira, Jose A. C., 1999. "Returns to education in Portugal," Labour Economics, Elsevier, vol. 6(4), pages 535-541, November.
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