Wages and Mobility: the Impact of Employer-Provided Training.
01 Apr 1999-Journal of Labor Economics (The University of Chicago Press)-Vol. 17, Iss: 9507, pp 298-317
TL;DR: This paper examined the impact of employer-provided training on the wage profile and on the mobility of young workers using data from the National Longitudinal Survey of Youth (NLSS) and found that training with the current employer has a positive effect on the minimum wage.
Abstract: Using data from the National Longitudinal Survey of Youth, this article examines the impact of employer‐provided training on the wage profile and on the mobility of young workers. The main results are that (i) training with the current employer has a positive effect on the wage; (ii) employers seem to reward skills acquired through training with previous employers as much as skills they provide themselves; and (iii) part of the skills acquired through training programs provided by the current employer seem to be fairly specific as they are shown to reduce mobility, even after controlling for unobserved heterogeneity.
Citations
More filters
•
TL;DR: In this paper, the authors review the existing evidence on workplace training in Europe in different data sources -the CVTS, OECD data and the European Community Household Panel -and examine alternative policies aiming both at raising training incidence and at reducing inequalities in the provision of skills.
Abstract: 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.
448 citations
••
TL;DR: This article found that technical staff in R&D-intensive firms pay for the knowledge they accumulate on the job through lower wages early in their career, and later earn a return on these implicit investments through higher wages.
Abstract: Labor mobility is considered to be an important source of knowledge externalities, making it difficult for firms to appropriate returns to research and development (R&D). Interfirm transfers of knowledge embodied in people should be analyzed within a human capital framework. Testing such a framework, I find that the technical staff in R&D‐intensive firms pays for the knowledge they accumulate on the job through lower wages early in their career. They later earn a return on these implicit investments through higher wages. This suggests that the potential externalities associated with labor mobility are, at least partially, internalized in the labor market.
282 citations
•
12 Jul 2007TL;DR: In this paper, the authors present an overview of the Theoretical Framework for Workplace Training and the benefits of workplace training in the Enlarged Europe, including the costs and benefits of training and reallocation.
Abstract: Introduction PART I THE MACROECONOMICS OF EDUCATION 1. Theory and Facts PART A- EDUCATION PRIORITIES: GROWTH VS. COHESION 2. Cohesion and the Supply of General Skills in Europe 3. Higher Education, Innovation, and Growth PART B- THE MARGINS OF IMPROVEMENT IN EDUCATION INSTITUTIONS: SKILL MISMATCH, SKILL PORTABILITY, AND MOBILITY 4. Internal Mobility, Skills, and Education 5. Skill Mismatch and Over-qualification in the Enlarged Europe 6. Specificity of Skills and Reallocation 7. Policy Implications PART II WORKPLACE TRAINING IN EUROPE 8. Introduction 9. An Overview of the Theoretical Framework 10. Stylised Facts About Workplace Training 11. Training and Labour Market Institutions 12. The Costs and Benefits of Workplace Training 13. Is There Scope for Policy? Final Remarks
159 citations
•
21 Jan 2013TL;DR: This article investigated the functional form for formal training in a wage equation and derived estimates of its rate of return, using the cube root and a semi-nonparametric estimator, and found evidence of heterogeneity in returns.
Abstract: We investigate the functional form for formal training in a wage equation and derive estimates of its rate of return. The cube root fits best in our two data sets. We show that if wages are not adjusted continuously, estimating the return to training requires one lag and one lead of training. Using the cube root and a semi-nonparametric estimator, estimated returns are 150–180 percent. Adjusting for heterogeneity in wage growth, promotions, and direct costs reduces the return to 40–50 percent. We find evidence of heterogeneity in returns. Our estimates can thus be regarded as the return to training for the trained, but cannot be extrapolated to the untrained.
151 citations
••
TL;DR: In this article, an alternative approach to identify the wage effects of private-sector training is proposed, which 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.
Abstract: SUMMARY 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. Copyright 2008 John Wiley & Sons, Ltd.
137 citations
References
More filters
••
TL;DR: In this article, a nonparametric maximum likelihood estimator for the distribution of unobservables and a computational strategy for implementing it is developed. But the estimator does not account for population variation in observed and unobserved variables unless it is assumed that individuals are homogeneous.
Abstract: Conventional analyses of single spell duration models control for unobservables using a random effect estimator with the distribution of unobservables selected by ad hoc criteria. Both theoretical and empirical examples indicate that estimates of structural parameters obtained from conventional procedures are very sensitive to the choice of mixing distribution. Conventional procedures overparameterize duration models. We develop a consistent nonparametric maximum likelihood estimator for the distribution of unobservables and a computational strategy for implementing it. For a sample of unemployed workers our estimator produces estimates in concordance with standard search theory while conventional estimators do not. ECONOMIC THEORIES of search unemployment (Lippman and McCall [34]; Flinn and Heckman [14]), job turnover (Jovanovic [25]), mortality (Harris [17]), labor supply (Heckman and Willis [23]) and marital instability (Becker [3]) produce structural distributions for durations of occupancy of states. These theories generate qualitative predictions about the effects of changes in parameters on these structural distributions, and occasionally predict their functional forms.2 In order to test economic theories about durations and recover structural parameters, it is necessary to account for population variation in observed and unobserved variables unless it is assumed a priori that individuals are homogeneous.3 In every microeconomic study in which the hypothesis of heterogeneity is subject to test, it is not rejected. Temporally persistent unobserved components are an empirically important fact of life in microeconomic data (Heckman [19]). Since the appearance of papers by Silcock [39] and Blumen, Kogan, and McCarthy [5], social scientists have been aware that failure to adequately control for population heterogeneity can produce severe bias in structural estimates of duration models. Serious empirical analysts attempt to control for these unob
2,940 citations
•
2,140 citations
•
01 Jan 1990TL;DR: In this paper, the gamma function and distribution of the Laplace transform have been investigated in the context of model building, and the hazard function has been shown to be an important process in modeling structural transition models.
Abstract: Preface Part I. Model Building: 1. Some basic results 2. Covariates and the hazard function 3. Parametric families of duration distribution 4. Mixture models 5. Some important processes 6. Some structural transition models Part II. Inference: 7. Identifiability issues 8. Fully parametric inference 9. Limited information inference 10. Misspecification analysis 11. Residual analysis Appendix 1: The gamma function and distribution Appendix 2: Some properties of the Laplace transform Bibliography Index.
1,788 citations
••
TL;DR: In this article, the authors examined the relationship between heterogeneity bias and strict exogeneity in a distributed lag regression of y on x, and showed that the relationship is very strong when x is continuous, weaker when X is discrete, and non-existent as the order of the distributed lag becomes infinite.
1,266 citations