Working Paper: NBER ID: w25408
Authors: Jorge Rodríguez; Fernando Saltiel; Sergio S. Urzúa
Abstract: This paper estimates the dynamic returns to job training. We posit a dynamic-discrete choice model of sequential training participation, where choices and earnings depend on observed and unobserved characteristics.We define treatment effects, including policy relevant parameters, and link them to continuation values. The empirical analysis is carried out using data combining job training records, matched employee-employer information, and pre-labor market ability measures from Chile. We document small positive average returns, large unobserved heterogeneity in responses, and dynamic substitutability of training investments. Our policy relevant treatment effects vary across dynamic response types, highlighting the relevance of our framework.
Keywords: job training; dynamic treatment effects; labor market outcomes
JEL Codes: C31; C32; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Job training participation in the first year (J24) | Average monthly earnings (J31) |
| Job training participation in the second year (M53) | Subsequent earnings (G19) |
| First-period training (Y20) | Present value of earnings (J17) |
| Training raises earnings for workers who had not previously trained (J24) | Earnings (J31) |
| Early training investments (J24) | Returns to later training (M53) |
| Training in the first period (M53) | Earnings returns in the second period (G12) |
| 10% increase in course availability (I24) | Medium-term earnings (J31) |