The returns to continuous training in Germany: new evidence from propensity score matching estimators

Abstract

Abstract:The present paper examines the wage effects of continuous training programs using individual-level data from the German Socio Economic Panel (GSOEP). In order to account for selectivity in training participation we estimate average treatment effects (ATE and ATT) of general and firm-specific continuous training programs using several state-of-the-art propensity score matching (PSM) estimators. Additionally, we also apply a combined matching difference-in-differences (MDiD) estimator to account for unobserved individual characteristics (e.g. motivation, ability). While the estimated ATE and ATT for general training are significant ranging between about 4 and 7.5 %, the corresponding wage effects of firm-specific training are mostly insignificant. Using the more appropriate MDiD estimator, however, we find a more precise and highly significant wage effect of about 5 to 6 %, though only for general training and not for firm-specific training. These results are consistent with standard human capital theory insofar as general training is associated with larger wage increases than firm-specific training. Furthermore, we conclude that firms may intend to use specific training to adjust to new job requirements, while career-relevant changes may be conditioned to general training.

Continuous training and wages: An empirical analysis using a comparison-group approach

“…This ambiguity can be explained by the use of different estimation techniques. Average wage differentials between training participants and non-participants estimated by standard Mincer-type wage equations extended with training measures are quite high (Parent 1999, Loewenstein and Spletzer 1999, Goux and Maurin 2000, Muehler et al 2007. In some studies, they are even higher than wage returns to schooling (Schøne 2004).…”

Age and Productivity. Human Capital Accumulation and Depreciation

“…Using the German GSOEP data, Pischke (2001) finds insignificant wage returns to training, while Mühler et al (2007) report a significant effect of about 5 to 6 per cent for general training and no effect for firmspecific training. Kuckulenz and Zwick (2003) use data from the Qualification and Career Survey and show that internal training does not translate into higher earnings while external training does.…”

Wpływ kształcenia pozaformalnego na płace osób z wykształceniem wyższym

“…Po trzecie, stosuje się metody łączone, czyli model efektów stałych w połączeniu z metodą zmiennych instrumentalnych (FE-IV;Bartel 1995;Blundell i in., 1996;Loewenstein i Spletzer 1996;Parent, 1999) lub metodę różnic w różnicach z metodą łączenia obserwacji (difference in differences -propensity score matching, DID-PSM; Muehler i in., 2007). Po czwarte, Edwin Leuven i Hessel Oosterbeek (2008) zaproponowali wykorzystanie danych zbliżonych do eksperymentalnych.…”

“…Jest również jednym z nielicznych, w których stosuje się metodę DID-PSM do redukcji premii płacowej z udziału w szkoleniach. Do tej pory metodę tę wykorzystali jedynie Grit Muehler i współpracownicy (Muehler, Beckmann i Schauenberg, 2007).…”