Estimating the Return to Training and Occupational Experience: The Case of Female Immigrants

Sarit Cohen-Goldner () and Zvi Eckstein ()

No 4603, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Do government provided training programmes benefit the participants and the society? We address this question in the context of female immigrants who first learn the new language and then choose between working or attending government provided training. Although theoretically training may have several outcomes, most evaluations have focused on only one outcome of training: the expected wage. Training might have no direct effect on wage, however, but it affects employment probability in higher paid jobs nevertheless. In order to measure the return to government provided training, and overcome the above reservations, we formulate an estimable stochastic dynamic discrete choice model of training and employment. Given the estimated model, the individual benefit is measured by the change in expected lifetime utility due to the effect of alternative training policy. The social return from training is measured by the expected increase in actual earnings minus the cost, due to a counterfactual policy. Our estimates imply that training has no significant impact on the mean offered wage in blue-collar occupation, but training increases the mean offered wage in white-collar occupation by 19%. Training also substantially increases the job offer rates in both occupations. Furthermore, counterfactual policy simulations show that free access to training programs relative to no training could cause an annual earnings growth of 31.3%. This large social gain (ignoring the cost of the programme) comes mainly from the impact of training on the job offer probabilities and, consequently, on unemployment, and not, as conventionally thought, from the impact of training on potential earnings. Moreover, the average ex-ante expected present value of utility for a female immigrant at arrival (individual benefit) increases by 50% using a counterfactual policy of fully available training relative to the estimated restricted level of training opportunity.

Keywords: immigration; occupation; training; transitions; unemployment; welfare (search for similar items in EconPapers)
JEL-codes: J31 J68 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dcm
Date: 2004-09
View citations in EconPapers

Downloads: (external link)
http://www.cepr.org/pubs/dps/DP4603.asp (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Estimating the Return to Training and Occupational Experience: The Case of Female Immigrants (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:cpr:ceprdp:4603

Ordering information: This working paper can be ordered from
http://www.cepr.org/pubs/dps/DP4603.asp

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers
Address: Centre for Economic Policy Research, 53--56 Great Sutton Street, London EC1V 0DG
Series data maintained by ().