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Education, Training and Economic Performance: Evidence from Establishment Survival Data

  • William Collier

    ()

  • Francis Green

    ()

  • Young-Bae Kim
  • John Peirson

    ()

This paper analyses the savings behaviour of natives and immigrants in Germany. It is argued that uncertainty about future income and legal status (in case of immigrants) is a key component in the determination of the level of precautionary savings. Using the German dataset, we exploit a natural experiment arising from a change in the nationality law in Germany to estimate the importance of precautionary savings. Using difference-in-differences approach, we find a significant reduction in savings and remittances for immigrants after the easing of citizenship requirements, compared to the pre-reform period. Our parametric specification shows that introduction of the new nationality law reduces the marginal propensity to save gap between natives and immigrants by up to 80%. These findings suggest that much of the differences in terms of the savings behaviour between natives and immigrants are driven by the savings arising from the uncertainties about future income and legal status rather than cultural differences.

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File URL: ftp://ftp.ukc.ac.uk/pub/ejr/RePEc/ukc/ukcedp/0822.pdf
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Paper provided by School of Economics, University of Kent in its series Studies in Economics with number 0822.

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Date of creation: Dec 2008
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Handle: RePEc:ukc:ukcedp:0822
Contact details of provider: Postal: School of Economics, University of Kent, Canterbury, Kent, CT2 7NP
Phone: +44 (0)1227 827497
Web page: http://www.kent.ac.uk/economics/

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  1. 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.
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  3. Goux, Dominique & Maurin, Eric, 2000. "Returns to firm-provided training: evidence from French worker-firm matched data1," Labour Economics, Elsevier, vol. 7(1), pages 1-19, January.
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  10. Booth, Alison L. & Francesconi, Marco & Zoega, Gylfi, 2003. "Unions, Work-Related Training, and Wages: Evidence for British Men," IZA Discussion Papers 737, Institute for the Study of Labor (IZA).
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  12. Jonathan Temple, 2000. "Growth Effects of Education and Social Capital in the OECD Countries," OECD Economics Department Working Papers 263, OECD Publishing.
  13. Conti, Gabriella, 2005. "Training, productivity and wages in Italy," Labour Economics, Elsevier, vol. 12(4), pages 557-576, August.
  14. Casey Ichniowski & Kathryn Shaw, 1999. "The Effects of Human Resource Management Systems on Economic Performance: An International Comparison of U.S. and Japanese Plants," Management Science, INFORMS, vol. 45(5), pages 704-721, May.
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  16. John M. Abowd & John Haltiwanger & Ron Jarmin & Julia Lane & Paul Lengermann & Kristin McCue & Kevin McKinney & Kristin Sandusky, 2005. "The Relation among Human Capital, Productivity, and Market Value: Building Up from Micro Evidence," NBER Chapters, in: Measuring Capital in the New Economy, pages 153-204 National Bureau of Economic Research, Inc.
  17. Black, Sandra E. & Lynch, Lisa M., 2005. "Measuring Organizational Capital in the New Economy," IZA Discussion Papers 1524, Institute for the Study of Labor (IZA).
  18. Stevens, Margaret, 1999. "Human Capital Theory and UK Vocational Training Policy," Oxford Review of Economic Policy, Oxford University Press, vol. 15(1), pages 16-32, Spring.
  19. Green, Francis, 1993. "The Determinants of Training of Male and Female Employees in Britain," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 55(1), pages 103-22, February.
  20. Alba-Ramirez, Alfonso, 1994. "Formal Training, Temporary Contracts, Productivity and Wages in Spain," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 56(2), pages 151-70, May.
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  23. William Collier & Francis Green & John Peirson & David Wilkinson, 2002. "Training and Establishment Survival," Studies in Economics 0208, School of Economics, University of Kent.
  24. Melanie K. Jones & Paul L. Latreille & Peter J. Sloane, 2008. "Crossing the Tracks? Trends in the Training of Male and Female Workers in Great Britain," British Journal of Industrial Relations, London School of Economics, vol. 46(2), pages 268-282, 06.
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  29. repec:dgr:tuecis:0013 is not listed on IDEAS
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  37. Dutta, Prajit K & Radner, Roy, 1999. "Profit Maximization and the Market Selection Hypothesis," Review of Economic Studies, Wiley Blackwell, vol. 66(4), pages 769-98, October.
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