Working Paper: CEPR ID: DP4289
Authors: Wiji Arulampalam; Alison L. Booth; Mark L. Bryan
Abstract: We use a quantile regression framework to investigate the degree to which work-related training affects the location, scale and shape of the conditional wage distribution. Human capital theory suggests that the percentage returns to training investments will be the same across the conditional wage distribution. Other theories - whether based on imperfections in the labour market or on skill-mix heterogeneity - suggest that this need not be the case. Using the first six waves of the European Community Household Panel, we investigate these issues for private sector men in ten European Union countries. Our results show that, for the vast majority of countries, investment in training yields similar percentage returns across the conditional wage distribution. Only Belgium was an outlier in this respect. Our results do indicate, however, that there are considerable differences in mean returns to training across countries.
Keywords: education; private sector; training; quantile regression; wages
JEL Codes: C29; J24; J31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Investment in training (J24) | Wages (J31) |
| Training quality differences (J24) | Returns to training (M53) |
| Labor market imperfections (J42) | Returns to training (M53) |
| Skills acquired through training (J24) | Returns to training (M53) |
| Higher ability individuals (D29) | Returns to training (M53) |
| Monopsony market structures (J42) | Returns to training (M53) |
| Unobserved productivity and training (J24) | Returns to training (M53) |
| Training (M53) | Wage distribution (J31) |