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Abramovsky, Laura, Erich Battistin, Emla Fitzsimons, Alissa Goodman and Helen Simpson (2011).
Providing Employers with Incentives to Train Low-Skilled Workers: Evidence from the Uk Employer Training Pilots.
In: Journal of Labor Economics
29(1)
, 153-193
.
Abstract.
Link.
We use unique workplace and employee-level data to evaluate a major UK government pilot program to increase qualification-based, employer-provided training for low-qualified employees. We evaluate the program’s effect using a difference-in-differences approach. Using data on eligible employers and workers we find noevidence of a statistically significant effect on the take-up of training in the first 3 years of the program. Our results suggest that the program involved a high level of deadweight and that improving the additionality of the subsequent national program is crucial if it is to make a significant contribution toward government targets to increase qualification levels. [close]
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Arulampalam, Wiji, Alison Booth and Mark Bryan (2004).
Training in Europe.
In: Journal of the European Economic Association
2(2)
, 346-360
.
Abstract.
Link.
Using the European Community Household Panel, we investigate gender differences in training participation over the period 1994-1999. We focus on ‘lifelong learning’, fixed-term contracts, part-time versus full-time work, public/private sector affiliation, educational attainment, and the individual’s position in the wage distribution prior to training. Women are typically no less likely than men to train. While there is no significant training-age profile for women, there is a negative profile for men. In several countries there is a negative association between fixed-term contacts and training, particularly for men. In most countries and, for both sexes, training is positively associated with public sector employment, high educational attainment and a high position in the wage distribution. [close]
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Ashenfelter, Orley (1978).
Estimating the Effect of Training Programs on Earnings.
In: Review of Economics and Statistics
60(1)
, 47-57
.
Link.
[close]
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Autor, David (2001).
Why Do Temporary Help Firms Provide Free General Skills Training?.
In: Quarterly Journal of Economics
116(4)
, 1409-1448
.
Abstract.
Link.
Nominally free, unrestricted training in portable computer skills is offered by the majority of U.S. temporary help supply (THS) establishments, a practice that is inconsistent with the competitive model of training. This paper asks why temporary help firms provide free general skills training. The answer proposed is that in addition to skills formation, training plays an informational role at THS firms by eliciting private information about worker ability. The model is built on the premise that training is more productive and therefore valuable to high ability workers. Firms offer a package of training and initially lower wages that induces self-selection. Workers of high perceived ability choose training in anticipation of a steeper wage profile while low ability workers are deterred by limited expected gains. Firms profit from their sunk training investment via their short-run informational advantage about ability and thereby limited monopsony power. Market competition among THS firms reduces employer rents, yielding higher wages and more training. Detailed tests of the model using representative establishment data on wages and training find strong support. The analysis demonstrates that beyond providing spot market labor, THS firms gather and sell information about worker quality to clients. The rapid growth of THS as a labor market information broker implies that the demand for worker screening is rising. [close]
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Bassanini, Andrea and Giorgio Brunello (2011).
Barriers to entry, deregulation and workplace training: A theoretical model with evidence from Europe.
In: European Economic Review
55(8)
, 1152--1176
.
Abstract.
Link.
We study the impact of regulatory barriers to entry on workplace training. We develop a model of training in imperfectly competitive product and labour markets. The model indicates that there are two contrasting effects of deregulation on training. As stressed in the literature, with a given number of firms, deregulation reduces the size of rents per unit of output that firms can reap by training their employees. Yet, the number of firms increases following deregulation, thereby raising output and profit gains from training and improving investment incentives. The latter effect prevails. In line with the predictions of the theoretical model, we find that the substantial deregulation in the 1990s of heavily regulated European industries (energy, transport and communication) increased training incidence. [close]
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Bassanini, Andrea and Giorgio Brunello (2003).
Is Training More Frequent when Wage Compression is Higher? Evidence from the European Community Household Panel.
In: Labour Economics
15(2)
, 272-290
.
Abstract.
Link.
This paper reviews the existing evidence on workplace training in Europe in different data sources - the CVTS, OECD data and the European Community Household Panel. We outline the differences in training incidence and relate these differences to the private costs and benefits of training, and to institutional factors such as unions, employment protection and product market competition. We ask whether there is a case for under-provision of training in Europe and examine alternative policies aiming both at raising training incidence and at reducing inequalities in the provision of skills. [close]
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Bishop, John (1997).
What We Know about Employer-Provided Training: A Review of the Literature.
In: Polacheck, Solomon and John Robst (eds.).
Research in Labor Economics.
London:
JAI Press
, 19-87
.
Abstract.
While the importance of on-the-job training is recognized by everyone, it is a phenomenon that is very difficult to study. Most training is informal and hard to measure and its effects on productivity are even more difficult to quantify. An elegant theory explaining how the quantity of training is determined and who pays for and benefits from it has been available for more than a third of a century (Becker 1962). However, the absence of data on the key theoretical constructs of the theory--general training, specific training, informal training and productivity growth--means that the only predictions of the theory that have been tested relate to the effects of formal training and tenure (interpreted as a proxy for informal training) on wage growth and turnover. Until recently, definitive tests of the OJT theory were infeasible because the large number of unobservables meant that any given phenomena had many alternative explanations (Garen, 1988). New data sets with improved measures of OJT are at last becoming available and consequently there has been a good deal of progress recently in testing OJT theory. This paper provides a review of this work. [close]
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Blatter, Marc, Samuel Muehlemann, Samuel Schenker, and Stefan C. Wolter (2016).
Hiring costs for skilled workers and the supply of firm-provided training .
In: Oxford Economic Papers
68(1)
, 238-257
.
Abstract.
Link.
This article analyses how the costs of hiring skilled workers from the external labour market affect a firm’s supply of training. Using administrative survey data with detailed information on hiring and training costs for Swiss firms, we find evidence for substantial and increasing marginal hiring costs. However, firms can invest in internal training of unskilled workers and thereby avoid costs for external hiring. Controlling for a firm’s training investment, we find that a 1 standard deviation increase in average external hiring costs increases the number of internal training positions by more than half of a standard deviation. [close]
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Booth, Alison, Gylfi Zoega and Marco Francesconi (1999).
Training, Rent-sharing and Unions.
CEPR Discussion Paper 2200.
Abstract.
Link.
We investigate two dimensions of investment in general human capital on-the-job: the number of workers trained and the intensity of training for each worker. In the benchmark case, we consider wage and training decisions made by firms in an imperfectly competitive labour market. The benchmark case generates two types of market failure: too few workers are trained, and the workers who are hired receive too little training. This is caused by the firms' discount rate exceeding the social discount rate, due to a 'quitting externality'. We show that the presence of labour unions can increase social welfare by increasing training intensity, while reducing welfare by lowering the number of workers trained. Using the British Household Panel Survey, we confirm the predictions of the model. [close]
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Booth, Alison, Monojit Chatterji (1998).
Unions and Efficient Training.
In: Economic Journal
108(447)
, 01-16
.
Abstract.
Link.
This paper examines the optimal level of training investment when trained workers are mobile, wage contracts are time-consistent, and training comprises both specific and general skills. The firm has ex post monopsonistic power that drives trained workers' wages below the social optimum. The emergence of a trade union bargaining at the firm-level can increase social welfare by counterbalancing the firm's ex post monopsonistic power in wage determination. Local union-firm wage bargaining ensures that the posttraining wage is set sufficiently high to deter at least some quits, so that the number of workers the firm trains is nearer the social optimum. [close]
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Brunello, Giorgio and Maria De Paola (2008).
Training and the Density of Economic Activity: Evidence from Italy.
IZA Discussion Paper No. 1173.
Abstract.
Link.
We use a search and matching model to investigate the economic relationship between training and local economic conditions. We identify two aspects of this relationship going in opposite directions: on the one hand, the complementarity between local knowledge spillovers and training generates a positive correlation with local density; on the other hand, the negative influence of higher wages in denser areas reduces training. Overall the relationship can be either positive or negative, depending on the relative strength of the two effects. Our empirical analysis, based on a sample of Italian firms, shows that training is lower in provinces with higher labor market density, measured as the number of employees per squared kilometer. This empirical result confirms previous evidence by Brunello and Gambarotto (2004) based on UK data. [close]
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Brunello, Giorgio, Alfredo Medio (2001).
An Explanation of International Differences in Education and Workplace Training.
In: European Economic Review
45(1)
, 307-322
.
Abstract.
Link.
We develop a simple search equilibrium model of workplace training and education based on two features. First, investment in education improves job-related learning skills and reduces training costs by firms. Second, firms with vacant skilled job slots can choose between recruitment from the market and training. Compared to Germany and Japan, the US has both a higher inflow rate into unemployment and a higher efficiency of the matching process. While the combined effect of these differences on the share of educated labor is ambiguous, the effect on the percentage of firms undertaking workplace training is to unambiguously reduce it. [close]
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Chang, Chun, Yijiang Wang (1996).
Human Capital Investment under Asymmetric Information: The Pigovian Conjecture Revisited.
In: Journal of Labor Economics
14(3)
, 505-519
.
Abstract.
Link.
This article investigates how human capital investment, labor turnover, and wages are jointly determined when the current employer knows more about a worker's productivity than potential employers. Results derived are quite different from, or unexplored by, the standard human capital theory. The authors show that the information asymmetry can cause an externality distortion in human capital investment because higher productivity due to the investment may not be recognized by the market. The investment level increases in the degree of firm specificity of human capital. The underinvestment problem is more severe when human capital is general than when it is firm-specific. [close]
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Cunha, Flavio, James Heckman, Lance Lochner and Dimitriy Masterov (2006).
Interpreting the Evidence on Life Cycle Skill Formation.
In: Hanushek, Eric and Finis Welch (eds.).
Handbook of the Economics of Education.
Amsterdam:
North-Holland
, 697-812
.
Abstract.
Link.
This paper presents economic models of child development that capture the essence of recent findings from the empirical literature on skill formation. The goal of this essay is to provide a theoretical framework for interpreting the evidence from a vast empirical literature, for guiding the next generation of empirical studies, and for formulating policy. Central to our analysis is the concept that childhood has more than one stage. We formalize the concepts of self-productivity and complementarity of human capital investments and use them to explain the evidence on skill formation. Together, they explain why skill begets skill through a multiplier process. Skill formation is a life cycle process. It starts in the womb and goes on throughout life. Families play a role in this process that is far more important than the role of schools. There are multiple skills and multiple abilities that are important for adult success. Abilities are both inherited and created, and the traditional debate about nature versus nurture is scientifically obsolete. Human capital investment exhibits both self-productivity and complementarity. Skill attainment at one stage of the life cycle raises skill attainment at later stages of the life cycle (self-productivity). Early investment facilitates the productivity of later investment (complementarity). Early investments are not productive if they are not followed up by later investments (another aspect of complementarity). This complementarity explains why there is no equity-efficiency trade-off for early investment. The returns to investing early in the life cycle are high. Remediation of inadequate early investments is difficult and very costly as a consequence of both self-productivity and complementarity. [close]
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De Grip, Andries and Jan Sauermann (2012).
The Effects of Training on Own and Co‐worker Productivity: Evidence from a Field Experiment.
In: Economic Journal
122(560)
, 376--399
.
Abstract.
Link.
This article identifies the effects of work‐related training on worker productivity by exploiting a field experiment that randomly assigns workers to treatment and control groups combined with data on worker performance before and after training. We find that participation in the training programme leads to a 10% increase in performance. Moreover, we provide experimental evidence for externalities from training: An increase of 10 percentage points in the share of treated peers improves a worker's performance by 0.51%. Furthermore, we find that the performance increase is not due to lower quality provided by the worker.
[close]
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Dearden, Lorraine, Howard Reed and John van Reenen (2000).
Who Gains When Workers Train? Training and Corporate Productivity in a Panel of British Industries.
Working Paper W00/04. Institute of Fiscal Studies.
Abstract.
Link.
There is a vast empirical literature on the effects of training on wages that are taken as an indirect measure of productivity. This paper is part of a smaller literature on the effects of training on direct measures of industrial productivity. We analyse a panel of British industries between 1983 and 1996. Training information (and other individual productivity indicators such as education and experience) is derived from a question that has been asked consistently over time in the Labour Force Survey. This is combined with complementary industry-level data sources on value added, wages, labour and capital. We use a variety of panel data techniques (including system GMM) to argue that training significantly boosts productivity. The existing literature has underestimated the full effects of training for two reasons. First, it has tended to treat training as exogenous whereas in reality firms may choose to re-allocate workers to training when demand (and therefore productivity) is low. Secondly, our estimates of the effects of training on wages are about half the size of the effects on industrial productivity. It is misleading to ignore the pay-off firms take in higher profits from training. The effects are economically large. For example, raising the proportion of workers trained in an industry by 5 percentage points (say from the average of 10% to 15%) is associated with a 4 per cent increase in value added per worker and a 1.6 per cent increase in wages. [close]
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Dolado, Juan, Marcel Jansen and Juan Jimeno (2009).
On-the-Job Search in a Matching Model with Heterogeneous Jobs and Workers.
In: Economic Journal
119(534)
, 200-228
.
Abstract.
Link.
This article examines the effects of transitory skill mismatch in a matching model with heterogeneous jobs and workers. In our model, some highly-educated workers may accept unskilled jobs for which they are over-qualified but are allowed to engage in on-the-job search in pursuit of a better job. We show that this feature has relevant implications for the set of potential equilibria, the unemployment rates of the different types of workers, the degree of wage inequality, and the response of the labour market to shifts in the demand and supply of skills. [close]
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Frazis, Harley, Mark Loewenstein (2003).
Reexamining the Returns To Training: Functional Form, Magnitude and Interpretation.
In: Journal of Human Resources
40(2)
, 453-476
.
Abstract.
Link.
This paper estimates the wage returns to training, paying careful attention to the choice of functional form. Both the National Longitudinal Survey of Youth (NLSY) and Employer Opportunity Pilot Project (EOPP) datasets indicate that the return to an extra hour of formal training diminishes sharply with the amount of training received. A cube root specification fits the data best, but the log specification also does well. The linear and quadratic specifications substantially understate the effect of training. If wages are not adjusted continuously, estimating the total effect of training requires that one include lagged and lead training as well as current training in the regression equation. Consequently, the NLSY is ideally suited to estimate the total return to training. We find very large returns to formal training. These returns are sharply reduced when one adjusts for heterogeneity in wage growth. Returns are reduced further when one takes into account the effect of promotions and the fact that direct costs are a substantial portion of the total cost of training. The mixed continuous-discrete nature of the training variable means that measurement error can cause estimates of the effects of short spells of training to be biased upward, but we demonstrate that the maximum upward bias in estimated returns at the geometric mean is relatively small. After correcting for confounding factors, we are left with a return to training that is several times the returns to schooling. Heterogeneity in returns explains how returns to formal training can be so high while most workers do not get formal training. In the EOPP data, the return to training is significantly higher in more complex jobs. With unobserved heterogeneity in returns, our estimates can be regarded as the return to training for the trained, but cannot be extrapolated to the untrained. [close]
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Görlitz, Katja (2011).
Continuous Training and Wages: An Empirical Analysis Using a Comparison-Group Approach.
In: Economics of Education Review
30(4)
, 691-701
.
Abstract.
Link.
Using German linked employer–employee data, this paper investigates the short-term impact of on-the-job training on wages. The applied estimation approach was first introduced by Leuven and Oosterbeek (2008). Wages of employees who intended to participate in training but did not do so because of a random event are compared to wages of training participants. The estimated wage returns are statistically insignificant. Furthermore, the decision to participate in training is associated with sizeable selection effects. On average, participants have a wage advantage of more than 4% compared to non-participants. [close]
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Görlitz, Katja (2010).
The Effect of Subsidizing Continuous Training Investments: Evidence from German Establishment Data.
In: Labour Economics
17(5)
, 789-798
.
Abstract.
Link.
This paper evaluates the impact of a training voucher program on establishments' investments in further training. The voucher program that was implemented in the German federal state of North Rhine-Westphalia increased training incentives for employees in small and medium-sized establishments by reducing training costs by 50%. The estimation is based on a quasi-experimental research design exploiting variation across time, regions and establishment size. Using establishment data, I find that the share of establishments that invest in training increased by 4–6 percentage points. Training intensity and the educational structure of participants remained unaffected among those establishments investing in training. [close]
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Hidalgo, Diana, Hessel Oosterbeek and Dinand Webbink (2014).
The Impact of Training Vouchers on Low-Skilled Workers.
In: Labour Economics
31
, 117-128
.
Abstract.
Link.
This paper reports about a randomized experiment in which training vouchers of €1000 were given to low-skilled workers. The vouchers increase training participation by almost 20 percentage points in two years, relative to a base rate of 0.45. This increased participation comes at a substantial deadweight loss of almost 60%. Consistent with predictions from human capital theory, we find that vouchers cause a shift towards more general forms of training. We do not find any significant impact of the program on monthly wages or on job mobility. The program does, however, have a significant impact on future training plans. Compared to always-takers, new trainees are more often male, more risk averse, work shorter hours and are less likely to have participated in training prior to treatment. Compared to never-takers, they are more often female, work longer hours and have a somewhat lower formal education level. [close]
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Hirshleifer, Sarojini, David McKenzie, Rita Almeida, and Cristobal Ridao-Cano (2016).
The Impact of Vocational Training for the Unemployed: Experimental Evidence from Turkey.
In: The Economic Journal
126(597)
, 2115-2146
.
Abstract.
Link.
We use a randomised experiment to evaluate Turkey's vocational training programmes for the unemployed. A detailed follow-up survey of a large sample with low attrition enables precise estimation of treatment impacts and their heterogeneity. The average impact of training on employment is positive but close to zero and statistically insignificant, which is much lower than programme officials and applicants expected. Over the first year, training had statistically significant effects on the quality of employment and these positive impacts are stronger when training is offered by private providers. However, administrative data show that after three years these effects have also dissipated.
[close]
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Jansen, Anika, Andries de Grip, and Ben Kriechel (2017).
The effect of choice options in training curricula on the demand for and supply of apprentices.
In: Economics of Education Review
57
, 52-65
.
Abstract.
Link.
Building on Lazear's skill weights approach, we study the effect of having more or less heterogeneity in the training curriculum on the demand for and supply of apprentices. Modernizations of training curricula provide us with a quasi-experimental setting as these modernizations can be seen as a relatively exogenous shock. We argue that firms will train more apprentices when they have more choice options in the training curriculum because of (1) the higher productivity of graduates who have acquired more skills that are relevant for the firm, and (2) firms’ higher market power in the wage bargaining process with graduates. We test this hypothesis on data on the demand for apprentices in Germany in all occupations from 2004 to 2014. We find that a more heterogeneous curriculum increases both firms’ demand for and the supply of apprentices. [close]
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Jenkins, Andrew, Anna Vignoles, Alison Wolf and Fernando Galindo-Rueda (2002).
The Determinants and Labour Market Effects of Lifelong Learning.
In: Applied Economics
35(16)
, 1711-1721
.
Abstract.
Link.
Despite the policy importance of lifelong learning, there is very little hard evidence from the UK on (a) who undertakes lifelong learning and why, and (b) the economic benefits of lifelong learning. This paper uses a rich longitudinal panel data set to look at key factors that determine whether someone undertakes lifelong learning and then models the effect of the different qualifications acquired via lifelong learning on individuals’ economic outcomes, namely wages and the likelihood of being employed. Those who left school with O-level qualifications or above were much more likely to undertake lifelong learning. Undertaking one episode of lifelong learning also increased the probability of undertaking more lifelong learning. We found little evidence of positive wage effects from lifelong learning. However, males who left school with only low-level qualifications do earn substantially more if they undertake a degree via lifelong learning. We also found important positive employment effects from lifelong learning. [close]
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Katz, Eliakin and Adrian Ziderman (1990).
Investment in General Training: The Role of Information and Labour Mobility.
In: Economic Journal
100(403)
, 1147-1158
.
Link.
[close]
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Kessler, Anke and Christoph Lülfesmann (2006).
The Theory of Human Capital Revisited: On the Interaction of General and Specific Investments.
In: The Economic Journal
116(514)
, 903-923
.
Abstract.
Link.
Human capital theory distinguishes between training in general-usage and firm-specific skills. Becker (1964) argues that employers will only invest in specific training, not general training, when labour markets are competitive. The article reconsiders Becker's theory. Using essentially his framework, we show that there exists an "incentive" complementarity between employer-sponsored general and specific training: the possibility to provide specific training leads the employer to invest in general human capital. Conversely, the latter reduces the hold-up problem that arises with firm-specific training. We also consider the desirability of institutionalised training programmes and the virtues of breach penalties, and discuss some empirical facts that could be explained by the theory. Copyright 2006 The Author(s). Journal compilation Royal Economic Society 2006. [close]
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Lee, Davis (2009).
Training, Wages, and Sample Selection: Estimating Sharp Bounds on Treatment Effects.
In: Review of Economic Studies
76(3)
, 1071-1102
.
Abstract.
Link.
This paper empirically assesses the wage effects of the Job Corps program, one of the largest federally funded job training programs in the U.S. Even with the aid of a randomized experiment, the impact of a training program on wages is difficult to study because of sample selection, a pervasive problem in applied microeconometric research. Wage rates are only observed for those who are employed, and employment status itself may be affected by the training program. This paper develops an intuitive trimming procedure for bounding average treatment effects in the presence of sample selection. In contrast to existing methods, the procedure requires neither exclusion restrictions nor a bounded support for the outcome of interest. Identification results, estimators, and their asymptotic distribution are presented. The bounds suggest that the program raised wages, consistent with the notion that the Job Corps raises earnings by increasing human capital, rather than solely through encouraging work. The estimator is generally applicable to typical treatment evaluation problems in which there is nonrandom sample selection/attrition. [close]
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Leuven, Edwin, Albert Tuijnman (1996).
Lifelong Learning: Who Pays?.
In: OECD Observer
Vol. 1
, 10-14
.
[close]
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Leuven, Edwin, Hessel Oosterbeek (2008).
An Alternative Approach to Estimate the Wage Returns to Private-Sector Training.
In: Journal of Applied Econometrics
23(4)
, 423-434
.
Abstract.
Link.
This paper follows an alternative approach to identify the wage effects of private-sector training. The idea is to narrow down the comparison group by only taking into consideration the workers who wanted to participate in training but did not do so because of some random event. This makes the comparison group increasingly similar to the group of participants in terms of observed individual characteristics and the characteristics of (planned) training events. At the same time, the point estimate of the average return to training consistently drops from a large and significant return to a point estimate close to zero. [close]
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Leuven, Edwin, Hessel Oosterbeek, Randolph Sloof and Chris van Klaveren (2005).
Worker Reciprocity and Employer Investment in Training.
In: Economica
72(1)
, 137-149
.
Abstract.
Link.
Standard economic theory predicts that firms will not invest in general train ing and will underinvest in specific training. Empirica1 evidence indicates, however, that firms do invest in general training of their workers and a1so points to no underinvestment in specific training. We propose a simple model in which a firm invests the socia1ly optima1 amounts in genera1 and specific training if the worker is sufficient1y motivated by reciprocity. A reciprocal worker may be willing to give the firm the full return on its investment. We present empirical evidence that is strongly supportive for the proposed mechanism. Workers with a high sensitivity to reciprocity have 15 percent higher training rates than workers with a low sensitivity to reciprocity. [close]
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Loewenstein, Mark, James Spletzer (1998).
Dividing the Costs and Returns to General Training.
In: Journal of Labor Economics
16(1)
, 142-171
.
Abstract.
Link.
Data from the National Longitudinal Survey of Youth indicate that the employer often pays the explicit costs of not only on-site training but also off-site general training. Although few of these costs appear to be passed on to workers in the form of a lower wage while in training, completed spells of general training paid for by previous employers have a larger wage effect than completed spells of general training paid for by the current employer. A model where contract enforcement considerations cause employers to share the costs and returns to purely general training can explain these findings. [close]
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Lynch, Lisa (1994).
Training and the Private Sector: International Comparisons.
Chicago:
The University of Chicago Press
.
Abstract.
Link.
How can today's workforce keep pace with an increasingly competitive global economy? As new technologies rapidly transform the workplace, employee requirements are changing and workers must adapt to different working conditions. This volume compares new evidence on the returns from worker training in the United States, Germany, France, Britain, Japan, Norway, and the Netherlands. The authors focus on Germany's widespread, formal apprenticeship programs; the U.S. system of learning-by-doing; Japan's low employee turnover and extensive company training; and Britain's government-led and school-based training schemes. The evidence shows that, overall, training in the workplace is more effective than training in schools. Moreover, even when U.S. firms spend as much on training as other countries do, their employees may still be less skilled than workers in Europe or Japan. Training and the Private Sector points to training programs in Germany, Japan, and other developed countries as models for creating a workforce in the United States that can compete more successfully in today's economy. [close]
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Lynch, Lisa (1992).
Private-Sector Training and the Earnings of Young Workers.
In: American Economic Review
82(1)
, 299-312
.
Link.
[close]
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Lynch, Lisa, Sandra Black (1998).
Beyond the Incidence of Employer-Provided Training.
In: Industrial and Labor Relations Review
52(1)
, 64-81
.
Abstract.
Link.
Using data from a 1994 survey of U.S. establishments, the authors investigate how the incidence, content, and extent of employer-provided training were linked to workplace practices and characteristics, physical capital investments, and workers' education. Formal training programs were positively associated with establishment size, the presence of high-performance work systems (such as Total Quality Management), capital-intensive production, and workers' education level. "General" types of training programs in computing and basic education were most likely in establishments that were large, were part of a multi-establishment firm, had low employee turnover, or had high-performance work systems. The percentage of workers given training was highest in establishments that had made large investments in physical capital or had adopted new forms of work organization, especially in the manufacturing sector. These results suggest that employer-provided training complements rather than substitutes for investments in physical capital and education. [close]
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Lynch, Lisa, Sandra Black (1995).
Beyond the Incidence of Training: Evidence from a National Employers Survey.
NBER Working Paper No. 5231.
Abstract.
Link.
This paper seeks to provide new insight into how school and post school training investments are linked to employer workplace practices and outcomes using a unique nationally representative survey of establishments in the U.S., the Educational Quality of the Workforce National Employers Survey (EQW-NES). We go beyond simply measuring the incidence of formal or informal training to examine the determinants of the types employers invest in, the relationship between formal school and employer provided training, who is receiving training, the links between investments in physical and human capital, and the impact that human capital investments have on the productivity of establishments. We find that the smallest employers are much less likely to provide formal training programs than employers from larger establishments. Regardless of size, those employers who have adapted some of the practices associated with what have been called `high performance work systems' are more likely to have formal training programs. Employers who have made large investments in physical capital or who have hired workers with higher average education are also more likely to invest in formal training and to train a higher proportion of their workers, especially in the manufacturing sector. There are significant and positive effects on establishment productivity associated with investments in human capital. Those employers who hire better educated workers have appreciably higher productivity. The impact of employer provided training differs according to the nature, timing and location of the employer investments. [close]
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Machin, Stephen, Bernd Fitzenberger and Christian Dustmann (2007).
The Economics of Education and Training.
In: Empirical Economics
32(2)
, 255-260
.
Link.
[close]
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Montizaan, Raymond, Frank Cörversa, and Andries De Grip (2010).
In: Labour Economics
17(1)
, 240-247
.
Abstract.
Link.
This paper uses a natural experiment approach to identify the effects of an exogenous change in future pension benefits on workers' training participation. We use unique matched survey and administrative data for male employees in the Dutch public sector who were born in 1949 or 1950. Only the latter were subjected to a major pension reform that diminished their pension rights. We find that this exogenous shock to pension rights postpones expected retirement and increases participation in training courses among older employees, although exclusively for those employed in large organizations. [close]
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Neumark, David, William Wascher (2001).
Minimum Wages and Training Revisited.
In: Journal of Labor Economics
19(3)
, 563-595
.
Abstract.
Link.
Theory predicts that minimum wages will reduce employer-provided on-the-job training designed to improve workers' skills on the current job, but may increase the amount of training that workers obtain to qualify for a job. We estimate the effects of minimum wages on the amount of both types of training received by young workers by exploiting cross-state variation in minimum wage increases. The evidence provides considerable support for the hypothesis that higher minimum wages reduce training (especially formal training) aimed at improving skills on the current job. At the same time, there is little or no evidence that minimum wages increase training undertaken to qualify for or obtain jobs. Consequently, it appears that, overall, minimum wages substantially reduce training received by young workers. [close]
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Oosterbeek, Hessel (1998).
Innovative Ways to Finance Education and Their Relation to Lifelong Learning.
In: Education Economics
6(3)
, 219-251
.
Abstract.
Link.
This paper provides three pieces of analysis. First, an economic theory account of the reasons that governments may have to intervene in the maket for education is offered. This account is based on insights from both the neoclassical (market) paradigm and the information paradigm. Second, it evaluates different proposals for the financing of (higher) education found in the academic literature. The proposals centre around three themes: more reliance on tuition fees higher education, a shift in the student aid system from schemes dominated by grants towards loans systems, and different types of voucher models. The third piece of analysis relates to selected country examples of policy proposals and developments. These developments and proposals are judged in terms of the analyses in the previous two themes. [close]
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Oosterbeek, Hessel, Randolph Sloof and Joep Sonnemans (2007).
Who Should Invest in Firm Specific Training?.
In: Journal of Population Economics
20(2)
, 329-357
.
Abstract.
Link.
We study experimentally whether employers or workers should invest in specific training. Workers have an alternative trading opportunity that takes the form of either an outside option or a threat point. Theory predicts that with outside options, employers have (weakly) better investment incentives than workers do and should therefore be the investing party. With threat points, employers and workers are predicted to invest the same. Our results are, by and large, in line with these predictions. Due to offsetting inefficiencies in the bargaining stage, however, realized inefficiencies are remarkably similar across the different situations considered. [close]
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Pischke, Jörn-Steffen (2001).
Continuous Training in Germany.
In: Journal of Population Economics
14(3)
, 523-548
.
Abstract.
Link.
Using data from the German Socio Economic Panel, I describe the incidence, attributes, and outcomes of continuous training received by workers in Germany between 1986 and 1989. Further training is primarily a white collar phenomenon, is concentrated among the more highly educated, and in the service sector and in public administration. Much of this training seems to be general and provided to workers by their employers at no direct cost. On the other hand, the training also does not seem to result in large short-run wage gains, especially for men. These results are somewhat at odds with the conventional models about the financing of human capital formation. [close]
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Schwerdt, Guido, Dolores Messer, Ludger Woessmann and Stefan Wolter (2012).
The Impact of an Adult Education Voucher Program: Evidence from a Randomized Field Experiment.
In: Journal of Public Economics
96(7-8)
, 569-583
.
Abstract.
Link.
Lifelong learning is often promoted in aging societies, but little is known about its returns or governments' ability to advance it. This paper evaluates the effects of a large-scale randomized field experiment issuing vouchers for adult education in Switzerland. We find no significant average effects of the voucher program on earnings, employment, and subsequent education 1 year after treatment. But effects are heterogeneous: low-educated individuals are most likely to profit from adult education, but least likely to use the voucher. In addition, the public voucher program appears to crowd out firm-financed training. The findings cast doubt on the effectiveness of untargeted voucher programs in promoting labor market outcomes through adult education. [close]
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Stevens, Margaret (2001).
Should Firms Be Required to Pay for Vocational Training?.
In: Economic Journal
111(473)
, 485-505
.
Abstract.
Link.
Failure in the training market may result from credit constraints and other capital market imperfections, deterring potential trainees, or labour market imperfections creating external benefits for firms. This paper presents a model of a training market affected by both problems, and examines their impact, and the impact of various policy measures, on the welfare of workers and firms. It is shown that there is a rationale for imposing training costs on firms, irrespective of the cause of under-investment. However, training levy schemes in which the levy depends upon the wage bill are shown to address capital market imperfections only. [close]
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Stevens, Margaret (1999).
Human Capital Theory and UK Vocational Training Policy.
In: Oxford Review of Economic Policy
15(1)
, 16-32
.
Abstract.
Link.
Since the Industrial Training Act of 1964, the UK government has adopted a variety of policies intended to redress a problem of under-investment in vocational training. In the 1960s and 1970s it attempted to regulate the training provided by firms, through a levy scheme. More recently, subsidised training schemes have been the centrepiece of policy. This paper examines the explanations for market failure in vocational training, and explores the rationale for such policies. Under-investment can arise from credit constraints and uncertainty facing trainees, and from imperfect competition in the labour market which creates external benefits for firms. Both subsidies and regulation can be effective in dealing with these problems, although it is argued that the training levy scheme, as implemented in the UK and other countries, should be viewed mainly as a mechanism for releasing credit constraints. [close]
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Stevens, Margaret (1994).
Labour Contracts and Efficiency in On-The-Job Training.
In: Economic Journal
104(423)
, 408-419
.
Abstract.
Link.
Two sources of inefficiency in the provision of on-the-job training are examined: an externality between firms which arises if there is imperfect competition between firms in the labor market, and allocation inefficiency due to asymmetry of information about the value of the trained worker. The second source of inefficiency may compound the first. Various contracts between the worker and the training firm are considered. Analysis of a simple example suggests that a contract in which the wage is chosen by the firm performs best, according to the criteria of reducing both types of inefficiency. Copyright 1994 by Royal Economic Society. [close]
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(1998).
Why Do Firms Train? Theory and Evidence.
In: Quarterly Journal of Economics
113(1)
, 79-119
.
Abstract.
Link.
This paper offers and tests a theory of training whereby workers do not pay for general training they receive. The crucial ingredient in our model is that the current employer has superior information about the worker's ability relative to other firms. This informational advantage gives the employer an ex post monopsony power over the worker which encourages the firm to provide training. We show that the model can lead to multiple equilibria. In one equilibrium quits are endogenously high, and as a result employers have limited monopsony power and are willing to supply only little training, while in another equilibrium quits are low and training high. We also derive predictions from our model not shared by other explanations of firm sponsored training. Using microdata from Germany, we show that the predictions of the specific human capital model are rejected, while our model receives support from the data. [close]