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It is standard in the literature on training to use wages as a sufficient statistic for productivity. But there are many reasons why wages and productivity may diverge. This paper is part of a smaller literature on the effects of work-related training on direct measures of productivity. We construct a panel of British industries between 1983 and 1996 containing training, productivity and wages. Using a variety of econometric estimation techniques (including system GMM) we find that training is associated with significantly higher productivity. Raising the proportion of workers trained in an industry by one percentage point (say from the average of 10% to 11%) is associated with an increase in value added per worker of about 0.6% and an increase in wages of about 0.3%. Furthermore, we find that the magnitude of the impact of training on wages is only half as large as the impact of training on productivity, implying that the existing literature has underestimated the importance of training. We also show evidence using complementary datasets (e.g. from individuals) that is suggestive of externalities of training and imperfect competition.

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The impact of migration on the UK labour market has become a contentious issue in public and political debate, with critics suggesting that immigration reduces wages or employment for the UK born population. This argument has become particularly prominent since the arrival of large numbers of migrants from Central and Eastern Europe since 2004.

This paper attempts to cut through the distortions and hyperbole of recent debates. We provide a balanced and informed assessment of the best existing evidence on the effects of migration on the labour market.

The effects of migration in both the short and long run are too complex for economic theory to deliver exact predictions about its impacts on employment and wages. However, the best previous evidence suggests that the overall effects of migration on wages are either insignificantly different from zero, or slightly positive. The evidence base on the effects of migration on employment in the UK, though relatively thin, suggests that the effects are not significantly different from zero. All effects noted are very small.

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In spite of the widely held belief that productivity in the UK is held back by a lack of investment in training, little empirical research has been carried out on the effect of work-related training on industrial productivity. In this discussion paper, the authors construct a new panel dataset of British industries between 1983 and 1996. Training information and other individual productivity indicators such as education and experience derived from the Labour Force Survey is combined with industry-level data sources on value added, wage, labour and capital. A variety of panel data techniques are used to support the argument that training significantly boosts productivity. The paper is structured as follows: section one contains the introduction; section two presents a guide to the previous literature on the effects of training on productivity and earnings; section three describes the data; in section four, an empirical model of productivity and training is outlined; section five contains the results; and the final section contains the conclusions. References and appendices are included. Show less

This research project is the latest in a sequence of studies of the origins and outcomes of basic skills difficulties. The report uses statistical modelling techniques to assess the economic and non-economic consequences of these effects for individuals and for society as a whole. The research was carried out in three stages: production of longitudinal datasets and exploratory multiple regression analysis; micro-analysis of the effects of literacy and numeracy; and estimating the impact of improvements in basic skills on aggregate wages, employment, taxes and benefits using the results of the micro-analysis. Show less