The Returns to Continuous Training in Germany: New Evidence from Propensity Score Matching Estimators

Grit Muehler, Michael Beckmann and Bernd Schauenberg

No 07-048, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: The present paper examines the wage effects of continuous training programs using individual-level data from the German Socio Economic Panel (GSOEP). In order to account for selectivity in training participation we estimate average treatment effects (ATE and ATT) of general and firm-specific continuous training programs using several state-of-the-art propensity score matching (PSM) estimators. Additionally, we also apply a combined matching difference-indifferences (MDiD) estimator to account for unobserved individual characteristics (e.g. motivation, ability). While the estimated ATE and ATT for general training are significant ranging between about 4 and 7.5 %, the corresponding wage effects of firm-specific training are mostly insignificant. Using the more appropriate MDiD estimator, however, we find a more precise and highly significant wage effect of about 5 to 6 %, though only for general training and not for firm-specific training. These results are consistent with standard human capital theory insofar as general training is associated with larger wage increases than firm-specific training. Furthermore, we conclude that firms may intend to use specific training to adjust to new job requirements, while career-relevant changes may be conditioned to general training.

Keywords: Continuous training; wage effect; average treatment effect; selectivity bias; propensity score matching estimators (search for similar items in EconPapers)
JEL-codes: C21 J24 J31 M53 (search for similar items in EconPapers)
Date: 2007
New Economics Papers: this item is included in nep-bec, nep-hrm and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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Related works:
Journal Article: The returns to continuous training in Germany: new evidence from propensity score matching estimators (2007)
Working Paper: Returns to continuous training in Germany: new evidence from propensity score matching estimators (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:5874

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