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Unions, training, and firm performance

The present paper uses a combination of workplace and linked employee-workplace data from the 1998 Workplace Employ ... Show more
The present paper uses a combination of workplace and linked employee-workplace data from the 1998 Workplace Employee Relations Survey and the 2004 Workplace Employment Relations Survey to examine the impact of unions on training incidence, training intensity/coverage, and training duration. It also examines the impact of unions and training on earnings and a measure of establishment labour productivity. In addition, the implications of training for the firm’s bottom line are evaluated. Union effects on training emerge as fairly subtle, and are more positive when using individual rather than plant-wide training data. A positive impact of training on earnings is detected in both the individual and plant-wide wage data, albeit only for the earlier survey. Consistent with other recent findings, the effects of union recognition on earnings are today rather muted, while union-training interaction effects vary greatly. Instrumenting training provides positive results for the labour productivity outcome and, in the case of the earlier survey, for the financial performance indicator as well. However, some negative effects of unions are now also detected.
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Authors: Addison, John T.; Belfield, Clive R.

Corporate authors: Institute for the Study of Labour (Germany) (IZA)

Date: 2008

Geographic subjects: Europe; Great Britain

Resource type: Report, paper or authored book

Series name: IZA discussion paper

Subjects: Income; Industry; Research ... [+] Show more
Why do firms train?: empirical evidence on the first labour market outcomes of graduated apprentices

The apprenticeship system is the most important source of formal post-secondary training in Germany. Our paper cont ... Show more
The apprenticeship system is the most important source of formal post-secondary training in Germany. Our paper contributes to the ongoing debate as to why firms are willing to invest in such training even though many apprentices will leave the training firm soon after completion of the apprenticeship. Using German register data - the IAB [German Institute for Employment Research] Employment Sample - we find that apprentices staying with their training firm after graduation have (1) higher wages and (2) longer first-job durations than apprentices leaving the firm. These results support theories according to which firms use the apprenticeship system to select and retain the more able apprentices, thereby recouping the costs of investing in skills that are portable in principle.
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Authors: Euwals, Rob; Winkelmann, Rainer

Corporate authors: Institute for the Study of Labour (Germany) (IZA)

Date: 2001

Geographic subjects: Europe; Germany

Resource type: Report, paper or authored book

Series name: IZA discussion paper

Subjects: Vocational education and training; Apprenticeship; Income ... [+] Show more
Who pays for general training?: new evidence for British men and women

We use important new training information from waves 8-10 of the British Household Panel Survey to document the var ... Show more
We use important new training information from waves 8-10 of the British Household Panel Survey to document the various forms of work-related training received by men and women over the period 1998-2000, and to estimate their impact on wages. We initially present descriptive information about training: we find that most work-related training is viewed by its recipients as general, that the longest training courses are for induction purposes, that the vast majority of training takes place either at the workplace or at the employer's training centre, and that most training is paid for by employers. We then estimate the impact of training - controlling for its financing method - on wage levels and wage growth. We find that employer-financed training increases wages both in the current and future firms, with some evidence that the impact in future firms is larger, especially for accredited training. These results are inconsistent with orthodox human capital theory with no credit constraints, but consistent with the relatively recent training literature on training in imperfectly competitive labour markets. They are also consistent with the hypothesis that firms offer credit-constrained workers binding training contracts whereby firms pay for general training and workers repay the 'loan' by receiving a post-training wage below their marginal product.
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Authors: Booth, Alison L.; Bryan, Mark L.

Corporate authors: Institute for the Study of Labour (Germany) (IZA)

Date: 2002

Geographic subjects: Europe; Great Britain

Resource type: Report, paper or authored book

Series name: IZA discussion paper

Subjects: Income; Skills and knowledge; Statistics ... [+] Show more
Performance pay, training and labor mobility

Market imperfections may cause firms and workers to under-invest in specific training. This paper shows that profit ... Show more
Market imperfections may cause firms and workers to under-invest in specific training. This paper shows that profit sharing may be a suitable instrument to enhance specific training investments, either by enhancing wage flexibility or by increasing the returns to training. As a result, profit sharing not only increases productivity by means of an effort effect, but also by increased training investments. Furthermore, the results suggest that older workers’ employability can be improved if a profit-related remuneration is paid.
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Authors: Gielen, Anne C.

Corporate authors: Institute for the Study of Labour (Germany) (IZA)

Date: 2007

Geographic subjects: Europe; Great Britain

Resource type: Report, paper or authored book

Series name: IZA discussion paper

Subjects: Employment; Statistics; Labour market ... [+] Show more
Is there a return-risk link in education?

Risk averse investors have to be compensated in higher expected returns when facing investments with higher risk. E ... Show more
Risk averse investors have to be compensated in higher expected returns when facing investments with higher risk. Education is an important investment therefore we use the results for 16 countries to test the positive relationship between return to education and the risk involved in this investment. It seems that most of the countries fit the pattern well: higher risk - higher return.
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Authors: Pereira, Pedro Telhado; Martins, Pedro Silva

Corporate authors: Institute for the Study of Labour (Germany) (IZA)

Date: 2001

Resource type: Report, paper or authored book

Series name: IZA discussion paper

Subjects: Skills and knowledge; Research; Teaching and learning ... [+] Show more
The return to the firm investment in human capital

In this paper we estimate the rate of return to firm investments in human capital in the form of formal job trainin ... Show more
In this paper we estimate the rate of return to firm investments in human capital in the form of formal job training. We use a panel of large firms with unusually detailed information on the duration of training, the direct costs of training, and several firm characteristics such as their output, workforce characteristics and capital stock. Our estimates of the return to training vary substantially across firms. On average it is 7% for firms not providing training and 24% for those providing training. Formal job training is a good investment for many firms and the economy, possibly yielding higher returns than either investments in physical capital or investments in schooling. In spite of this, observed amounts of formal training are very small.
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Authors: Almeida, Rita K.; Carneiro, Pedro

Corporate authors: Institute for the Study of Labour (Germany) (IZA)

Date: 2005

Resource type: Report, paper or authored book

Series name: IZA discussion paper

Subjects: Outcomes; Skills and knowledge; Statistics ... [+] Show more
Estimating the returns to community college schooling for displaced workers

Studies show that high-tenure displaced workers typically incur substantial long-term earnings losses. As these los ... Show more
Studies show that high-tenure displaced workers typically incur substantial long-term earnings losses. As these losses have become increasingly apparent, policy makers have significantly expanded resources for retraining, much of which takes place in regular community college classes. To analyse the effectiveness of such training, we link administrative earnings records with the community college transcript records of workers displaced from jobs during the first half of the 1990s in Washington State. We find that the equivalent of an academic year of community college schooling raises the long-term earnings of displaced workers by an average of about nine per cent for men and about 13 per cent for women. However, these average returns mask substantial variation in the returns associated with different types of courses. On the one hand, we estimate that an academic year of more technically oriented vocational and academic maths and science courses raises earnings by about 14 per cent for men and 29 per cent for women. On the other hand, we estimate that less technically oriented courses yield very low and possibly zero returns.
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Authors: Jacobson, Louis; LaLonde, Robert; Sullivan, Daniel G.

Corporate authors: Institute for the Study of Labour (Germany) (IZA)

Date: 2004

Geographic subjects: North America; United States

Resource type: Report, paper or authored book

Series name: IZA discussion paper

Subjects: Vocational education and training; Providers of education and training; Outcomes ... [+] Show more
On the complementarity between education and training in Europe

This paper is an empirical investigation of the complementarity between education and training in 13 European count ... Show more
This paper is an empirical investigation of the complementarity between education and training in 13 European countries, based on the European Community Household Panel (ECHP). After confirming the standard result that training incidence is higher among individuals with more education, I find that the relationship between educational attainment and training incidence varies significantly across countries and birth cohorts. I show that individuals have a higher training incidence in countries with a more educated labour force, a less stratified schooling system, a higher union density and a lower value of the Kaitz index. I also find evidence that individuals with more education and limited labour market experience enjoy higher private returns from recent training than individuals with the same experience and less education. More experienced individuals with higher education, however, have lower returns from recent training than less educated workers with the same experience.
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Authors: Brunello, Giorgio

Corporate authors: Institute for the Study of Labour (Germany) (IZA)

Date: 2001

Geographic subjects: Europe

Resource type: Report, paper or authored book

Series name: IZA discussion paper

Subjects: Youth; Outcomes; Income ... [+] Show more
Do government subsidies stimulate training expenditure?: microeconometric evidence from plant level data

This paper examines whether financial assistance provided by government induces firms to spend more of their own fu ... Show more
This paper examines whether financial assistance provided by government induces firms to spend more of their own funds on training expenditures, using plant level data for the Republic of Ireland. We pay particular attention to the potential problems in such an evaluation study, namely selectivity and endogeneity, by first identifying a valid counterfactual for grant receiving plants via a matching estimator and then employing a difference-indifferences technique on this matched sample. Our results show that there are differences in causal effects between domestic and foreign owned plants. For the former we find clear evidence that grant receipt stimulates private expenditure, while there are no statistically significant effects for foreign-owned plants based in Ireland.
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Authors: Gorg, Holger; Strobl, Eric

Corporate authors: Institute for the Study of Labour (Germany) (IZA)

Date: 2005

Geographic subjects: Europe; Ireland

Resource type: Report, paper or authored book

Series name: IZA discussion paper

Subjects: Skills and knowledge; Statistics; Finance ... [+] Show more
Continuous training in Germany

Using data from the German Socio Economic Panel, I analyse the incidence, financing, and returns to workplace train ... Show more
Using data from the German Socio Economic Panel, I analyse the incidence, financing, and returns to workplace training in Germany for the years 1986 to 1989. Much of this training seems general, and is provided to workers by their employer at no direct cost. While workers typically report larger productivity gains from the training during work hours, such training has lower returns than training undertaken during leisure time. Workers with higher earnings growth seem more likely to participate in training. I deal with this selection problem by estimating models that allow for individual level heterogeneity in earnings growth rates.
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Authors: Pischke, Jorn-Steffen

Corporate authors: Institute for the Study of Labour (Germany) (IZA)

Date: 2000

Geographic subjects: Europe; Germany

Resource type: Report, paper or authored book

Series name: IZA discussion paper

Subjects: Participation; Outcomes; Income ... [+] Show more