Heterogeneous Returns to Training : an Analysis with German Data Using Local Instrumental Variables
Empirical work on the wage impact of training has noted that unobserved heterogeneity of training participants should play a role. The expected return to training, which partly depends on unobservable characteristics, is likely to be a crucial criterion in the decision to take part in training or not. We try to account for this fact by using recent advances in estimating returns to schooling, which allow for selection on unobservables, and apply it to estimating the impact of training on earnings. Allowing heterogeneity to be unobserved by the econometrician, but assuming that individuals may act upon this heterogeneity, completely changes the interpretation and properties of commonly used estimators. Our results based on local instrumental variables suggest that traditional estimates of the wage impact of training overestimate this effect.
|Date of creation:||20 Jan 2006|
|Date of revision:|
|Contact details of provider:|| Postal: D-78457 Konstanz|
Phone: +49 7531 88 2314
Web page: http://www.uni-konstanz.de/forschergruppewiwi
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:knz:hetero:0603. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gerald Eisenkopf)
If references are entirely missing, you can add them using this form.