Locus of Control and Investment in Training

Marco Caliendo, Deborah Cobb-Clark, Helke Seitz () and Arne Uhlendorff

No 10406, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper extends standard models of work-related training by explicitly incorporating workers' locus of control into the investment decision. Our model both differentiates between general and specific training and accounts for the role of workers and firms in training decisions. Workers with an internal locus of control are predicted to engage in more general training than are their external co-workers because their subjective expected investment returns are higher. In contrast, we expect little relationship between specific training and locus of control because training returns largely accrue to firms rather than workers. We then empirically test the predictions of our model using data from the German Socioeconomic Panel (SOEP). We find that, consistent with our model, locus of control is related to participation in general but not specific training. Moreover, we provide evidence that locus of control influences participation in general training through its effect on workers' expectations about future wage increases. Specifically, general training is associated with a much larger increase in the expected likelihood of receiving a future pay raise for those with an internal rather than external locus of control, while we do not find any relationship in the case of specific training. Actual post-training wages for those who receive general or specific training do not depend on locus of control.

Keywords: human capital investment; on-the-job training; locus of control; wage expectations (search for similar items in EconPapers)
JEL-codes: C23 D84 J24 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2016-12
New Economics Papers: this item is included in nep-hrm, nep-lma, nep-ltv and nep-neu
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

Forthcoming - published in: Journal of Human Resources, 2022, 57(4), 1311-1349

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Related works:
Journal Article: Locus of Control and Investment in Training (2022)
Working Paper: Locus of Control and Investment in Training (2022)
Working Paper: Locus of Control and Investment in Training (2016)
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