Abstract:
Using German linked employer-employee data, this paper investigates the impact of further training on wages. The estimation technique applied was primarily introduced by Leuven and Oosterbeek (2008). The idea is to compare wages of employees who intended to participate in training but did not do so because of a random event with wages of employees who actually participated. My results suggest that the size of the point estimates of the wage returns is large, even though they are statistically insignificant. In addition, the decision to participate in training is associated with sizeable selection effects. On average, participants have an initial wage advantage of more than 3% compared to non-participants.
