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Training Subsidies and the Wage Returns to Continuing Vocational Training: Evidence from Italian Regions

Author

Listed:
  • Brunello, Giorgio

    (University of Padova)

  • Comi, Simona Lorena

    (University of Milan Bicocca)

  • Sonedda, Daniela

    (University of Piemonte Orientale)

Abstract

We use the variation of training policy over time and across Italian regions to identify the relationship between individual training and earnings. Using longitudinal data for the period 1999 to 2005, we find that the marginal effect of one additional week of formal training on monthly earnings is 4.4 percent. This effect declines rapidly over time and is equal to 0.86 percent 10 years after the investment. We also find that marginal returns are higher among small firms, which are more likely to be constrained by lack of economic resources in their training decisions. Since small firms train less than large firms, their higher returns from the training induced by training policies can simply reflect decreasing marginal returns to training.

Suggested Citation

  • Brunello, Giorgio & Comi, Simona Lorena & Sonedda, Daniela, 2010. "Training Subsidies and the Wage Returns to Continuing Vocational Training: Evidence from Italian Regions," IZA Discussion Papers 4861, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp4861
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    References listed on IDEAS

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    13. Edwin Leuven & Hessel Oosterbeek, 2008. "An alternative approach to estimate the wage returns to private-sector training," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 23(4), pages 423-434.
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    Cited by:

    1. Görlitz, Katja & Tamm, Marcus, 2015. "The pecuniary and non-pecuniary returns to voucher-financed training," Discussion Papers 2015/11, Free University Berlin, School of Business & Economics.
    2. repec:zbw:rwirep:0553 is not listed on IDEAS
    3. Jonathan Barr & Emma Clarence & Francesca Froy & Sergio Destefanis & Chris Warhurst, 2012. "Local Job Creation: How Employment and Training Agencies Can Help - The Labour Agency of the Autonomous Province of Trento, Italy," OECD Local Economic and Employment Development (LEED) Papers 2012/17, OECD Publishing.
    4. Paweł Strawiński & Paulina Broniatowska & Aleksandra Majchrowska, 2016. "Returns to vocational education. Evidence from Poland," Working Papers 2016-16, Faculty of Economic Sciences, University of Warsaw.
    5. Katja Görlitz & Marcus Tamm, 2015. "The Pecuniary and Non-pecuniary Returns to Voucher-financed Training," Ruhr Economic Papers 0553, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    6. Floreani, Vincent Arthur, 2014. "Fixing Europe's youth unemployment and skills mismatch, can public financial support to SMEs be effective? The case of the European Commission and European Investment Bank joint initiatives," MPRA Paper 55849, University Library of Munich, Germany.

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    More about this item

    Keywords

    training; training policies; Italy;
    All these keywords.

    JEL classification:

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

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