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We use linked data for 1,460 workplaces and 19,853 employees from the Workplace Employee Relations Survey 1998 to analyse the incidence and duration of employee training in Britain. We find training to be positively associated with having a recognised vocational qualification and current union membership, whilst being non-white, [a] shorter current job tenure, and part-time or fixed-term employment statuses are all associated with less training. Furthermore, in line with recent non-competitive training models, higher levels of wage compression (measured in absolute or relative terms) are positively related to training.

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Do government provided training programs benefit the participants and the society? We address this question in the context of female immigrants who first learn the new language and then choose between working or attending government provided training. Although theoretically training may have several outcomes, most evaluations have focused on only one outcome of training: the expected wage. However, training might have no direct effect on wage, but, nevertheless, affect employment probability in higher paid jobs. In order to measure the return to government provided training, and overcome the above reservations, we formulate an estimable stochastic dynamic discrete choice model of training and employment. Our estimates imply that training has no significant impact on the mean offered wage in bluecollar occupation, but training increases the mean offered wage in white-collar occupation by 19 per cent. Training also substantially increases the job offer rates in both occupations. Furthermore, counterfactual policy simulations show that free access to training programs relative to no training could cause an annual earnings growth of 31.3 per cent. This large social gain (ignoring the cost of the program) comes mainly from the impact of training on the job offer probabilities and, consequently, on unemployment, and not, as conventionally thought, from the impact of training on potential earnings. Moreover, free access to training increases the average ex-ante expected present value of utility for a female immigrant at arrival (individual benefit) by 50 per cent relative to the existing training opportunity.

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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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Do workers benefit from the education of their co-workers? This question is examined first by introducing a model of on-the-job schooling, which argues that educated workers may transfer part of their general skills to uneducated workers and that this spillover is affected by the degrees of non-excludability, irreversibility and generality of those skills. We then conduct an empirical analysis drawing on a matched panel of Portuguese firms and their workers. Schooling endogeneity is tackled by considering firm fixed effects and instruments based on schooling lags and the lagged share of retirement-age workers. We find evidence of large firm-level social returns (ranging between 14% and 23% - and thus exceeding standard estimates of private returns) and of significant returns accruing to less educated workers but not to their more educated colleagues.

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This paper tests the hypothesis that unions, through imposing wage floors that lead to wage compression, increase on-the-job training. Our analysis focuses on Germany which provides an interesting context to test this hypothesis, due to its large scale apprenticeship programme and its collective bargaining system that is based on voluntary union recognition. To guide the empirical analysis, we first develop a model of firm-financed training. A novel feature of our model is that a unionised and non-unionised sector coexist, and only unionised firms are bound by union wages. The model creates a rich set of empirical implications regarding apprenticeship training, layoffs, wage cuts, and wage compression in unionised and non-unionised firms. Our empirical analysis is based on firm panel data matched with administrative employee data, and provides strong support for our model. Our main results are that unionisation increases training, and that wage floors and wage compression play a more important role in unionised than in non-unionised firms.

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Recent empirical evidence suggests that the density of local economic activity - measured as the number of employees per squared kilometer - positively affects local average productivity. In this paper we use British data from the European Community Household Panel to ask whether local density affects employer-provided training. We find that training is less frequent in economically denser areas. We explain this result as the outcome of the interaction between the positive pooling effects and negative poaching and turnover effects of agglomeration. The size of the negative effect of density is not negligible: when evaluated at the average firm size in the local area, a 10 per cent increase in density reduces the probability of employer-provided training by 0.07, more than 20 per cent of the average incidence of training in the UK during the sample period.

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A small number of recent empirical studies for several countries has reported the intriguing finding that the ‘advantage’ previously enjoyed by men in respect of training incidence and reported in earlier work in the literature has been reversed. The present paper explores the sources of the gender differential in training incidence using Labour Force Survey data, updating previous U.K. studies and providing further insights into the above phenomenon. The results suggest that the greater part of the ‘gap’ typically relates to differences in characteristics, among which the most important relate to occupation, industry and sector (public/private).

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This paper argues that skill formation is a life-cycle process and develops the implications of this insight for Scottish social policy. Families are major producers of skills, and a successful policy needs to promote effective families and to supplement failing ones. We present evidence that early disadvantages produce severe later disadvantages that are hard to remedy. We also show that cognitive ability is not the only determinant of education, labor market outcomes and pathological behavior like crime. Abilities differ in their malleability over the life-cycle, with noncognitive skills being more malleable at later ages. This has important implications for the design of policy. The gaps in skills and abilities open up early, and schooling merely widens them. Additional university tuition subsidies or improvements in school quality are not warranted by Scottish evidence. Company-sponsored job training yields a higher return for the most able and so this form of investment will exacerbate the gaps it is intended to close. For the same reason, public job training is not likely to help adult workers whose skills are rendered obsolete by skill-biased technological change. Targeted early interventions, however, have proven to be very effective in compensating for the effect of neglect.

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This paper examines the relationship between technology adoption and workforce skill in US manufacturing plants. Using information on the use and adoption of seven different information technologies, we find that the relationship between technology adoption and workforce skill varies across the technologies. Technologies more closely related to engineering and design tasks are associated with more skilled workforces. Technologies more closely related to production activities are not. When we examine the relationship between technology adoption and skill upgrading of workforces, we find little correlation between the use and/or adoption of technologies and changes in workforce skill at the plant level. However, we do find that plants adopting technologies related to engineering and design tasks do grow faster over the period 1987-1997.

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This paper focuses on the effects of vocational training programs on the duration of unemployment in Eastern Germany. We use information from administrative data of the Federal Employment Office. To allow for observable and possible unobservable influences, we apply a multivariate mixed proportional hazard model. Furthermore, particular interest is spent on possible locking-in effects by separate estimation of in- and after-program effects. Regarding several different program durations, our results show insignificant in- and after-program effects for short-term programs, insignificant in-program and negative after-program effects for mid-term programs and negative in- and after-program effects for long-term programs.

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