Who Invests in Training if Contracts are Temporary? - Empirical Evidence for Germany Using Selection Correction

Jan Sauermann

No 14/2006, IWH Discussion Papers from Halle Institute for Economic Research (IWH)

Abstract: This study deals with the effect of fixed-term contracts on work-related training. Though previous studies found a negative effect of fixed-term contracts on the participation in training, from the theoretical point of view it is not clear whether workers with fixed-term contracts receive less or more training, compared to workers with permanent contracts. In addition to the existing strand of literature, we especially distinguish between employer- and employee-financed training in order to allow for diverging investment patterns of worker and firm. Using data from the German Socio-Economic Panel (GSOEP), we estimate a bivariate probit model to control for selection effects that may arise from unobservable factors, affecting both participation in training and holding fixed-term contracts. Finding negative effects for employer-sponsored, as well as for employee-sponsored training, leads us to conclude that workers with fixed-term contracts do not compensate for lower firm investments.

Keywords: berufliche Weiterbildung; befristete Beschäftigungsverhältnisse; bivariates Probit-Modell; training; fixed-term contracts; bivariate probit model (search for similar items in EconPapers)
JEL-codes: C35 J24 J42 (search for similar items in EconPapers)
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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