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Swedish labour market programs appear large from an international perspective, yet their consequences are not fully investigated and understood. In this paper we estimate a switching regression model with training effect modelled as a random coefficient, partitioned in an observed and unobserved component. We investigate labour market training for three cohorts during the 80s and the beginning of the 90s on its effect on earnings. We separate the analysis between Swedish-born and foreign-born individuals to identify differences in their responses to training. The results indicate that there is positive sorting into training. We find that the proportion of trainees having positive rewards from training was not very different from the proportion having negative rewards. This means that the results do not support the view that from efficiency considerations, too few persons were enrolled in labour market training during this period. Differences in results across cohorts can be interpreted as being caused by rapid changes in the labour market. Further, consistent with results from several previous studies, we find that being young often means no positive pay-off from training, and the same is found for persons with only primary education. In conflict with what earlier studies have shown, we found that males have a better pay-off from training than females. Rewards from training were higher for foreign-born than for natives and rewards among the former vary by place of birth.

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In this paper we use important new training and wage data from the British Household Panel Survey to estimate the impact of the national minimum wage (introduced in April 1999) on the work-related training of low-wage workers. We use two ‘treatment groups’ for estimating the impact of the new minimum wage - those workers who explicitly stated they were affected by the new minimum and those workers whose derived 1998 wages were below the minimum. Using difference-in-differences techniques for the period 1998 to 2000, we find no evidence that the introduction of the minimum wage reduced the training of affected workers, and some evidence that it increased it. In particular we find a significant positive effect of about eight to 11% for affected workers. Consequently, our findings can be interpreted as providing no evidence in support of the orthodox human capital model as it applies to work-related training, and some evidence in support of the new theories based on imperfectly competitive labour markets. Our estimates also suggest that two of the goals of the UK government - improving wages of the low paid and developing their skills - have been compatible, at least for the introductory rates of the national minimum wage.

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This paper is concerned with the determinants of English language proficiency among immigrants in a longitudinal survey for Australia. It focuses on both visa category and variables derived from an economic model of the determinants of destination language proficiency among immigrants. Skills tested and economic immigrants have the greatest proficiency shortly after immigration, followed by family-based visa recipients, with refugees having the lowest proficiency. These differences disappear by three and half years after immigration for speaking skills, but they persist for reading and writing skills. The variables generated from the model of destination language proficiency are in part predictions of visa category and are more important statistically for explaining proficiency. The effects of some variables on language skills increase with duration in these longitudinal data. In particular, the efficiency variable, age, and gender, which may be reflecting differences in labour market attachment, increase in importance over time.

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A related paper by the authors is indexed at TD/TNC 60.659. Show less

American business seems to be infatuated with its workers’ ‘leadership’ skills. Is there such a thing, and is it rewarded in labour markets? Using the Project Talent, NLS72 [National Longitudinal Survey of 1972] and High School and Beyond datasets, we show that men who occupied leadership positions in high school earn more as adults, even when cognitive skills are held constant. The pure leadership-wage effect varies from four per cent for a broad definition of leadership in 1971 to 24 per cent for a narrow definition in 1992, and appears to have increased over time. High-school leaders are more likely to occupy managerial occupations as adults, and leadership skills command a higher wage premium within managerial occupations than other jobs. We find evidence that leadership skill has a component that is determined before high school, but also find evidence that it is ‘teachable’.

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This paper investigates the relationship between education and training provided by the firm, both on the job and off the job, using a unique dataset based on a survey of Thai employees conducted in the summer of 2001. We find a significant and negative relationship between educational attainment and on the job training and no significant relationship between education and off the job training. We also find that education and training are technical complements, especially in the case of off the job training. These findings are consistent with more educated individuals having higher marginal costs of training than less educated workers, especially when on the job training is concerned. Either the better educated have lower learning skills in jobs requiring on the job training or they have higher opportunity costs of training, or both.

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This paper analyses the labour mobility and human capital accumulation of male immigrants who moved from the former Soviet Union to Israel. We formulate an estimable dynamic choice model for employment and training in blue and white-collar occupations, where the labour market randomly offered opportunities are affected by past choices. The estimated model well fits the observed patterns of the fast decrease in unemployment as immigrants first find blue-collar jobs and attend training, followed by a gradual movement to white-collar occupations. The estimated rates of return to local training, local experience and local language are very high, but imported skills have zero (conditional) return. Furthermore, the welfare gain from the impact of training on job offer probabilities is larger than its effect on wages. Due to low job offer rates, the realised rate of return from white-collar training is relatively low and takes time. As a result, the annual aggregate wage growth, due to the availability of training programs, increases with time in Israel to 1.4 per cent in the fifth year.

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This paper proposes a new approach to identify the wage effects of training. The idea is to narrow down the comparison group by only taking into consideration the workers who wanted to participate in training but did not do so because of some random event. The point estimate of the return to training consistently drops when restricting the comparison group this way. While the OLS [Ordinary Least Squares] estimate of the return to training participation is significantly positive, this is no longer the case when we use the new comparison group. This outcome suggests that a large share of what is usually interpreted as returns to training is actually the return to some unobservable characteristic.

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This paper uses data from the 1996 Australian Survey of Aspects of Literacy to examine the effects on labour market outcomes of literacy, numeracy and educational attainment. The survey includes a range of literacy and numeracy variables that are highly inter-correlated. A ‘general to specific’ approach identifies the most relevant literacy and numeracy variables. Including the others adds little explanatory power. Among males and females separately, about half of the total effect of education on labour force participation and on unemployment can be attributed to literacy and numeracy (the indirect effect) and about half to the direct effect of education. There is apparently no indirect effect of labour market experience through literacy and numeracy on participation or unemployment. The direct and total effects of experience are the same. The findings suggest that education is a value added process in which skills, including literacy and numeracy, are improved and that these skills enhance labour market outcomes.

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Suppose insiders use their market power to push up their wages, while entrants receive their reservation wages. How will employment and productivity be affected? In addressing this question, we focus on the role of on-the-job training. We show that on-the-job training makes insider wage hikes less detrimental to average employment (over booms and recessions), and may even cause employment to be stimulated. Furthermore, such training can make insider wage hikes more detrimental to average productivity.

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The quality of labour-market entry achieved by newly qualified apprentices in West Germany is analysed from 1948 to 1992. A bivariate probit model, using data from the BIBB/IAB [Federal Institute for Vocational Training/German Institute for Employment Research] employment survey, is applied to estimate simultaneously the quality of the school-to-apprenticeship transition and that of the apprenticeship-to-work transition. This shows that school leavers with lower levels of general education are selected into apprenticeships with less favourable employment prospects in all analysed time periods. However, when controlling for this selection effect, it is only in the most recent period that lower academic achievers are further penalised for the shortcomings in their general education at the apprenticeship-to-work transition. Furthermore, the crowding-out of trainees with lower levels of general education can be observed in both the less demanding and the more challenging occupational fields.

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