Costs and Revenues of Investment in Enterprise-Related Schooling

Wim Groot, Joop Hartog and Hessel Oosterbeek

Oxford Economic Papers, 1994, vol. 46, issue 4, 658-75

Abstract: In this paper, a general specification of the wage equation is used to derive a marginal revenue equation for enterprise-related schooling. The optimal amount of investment in enterprise-related schooling is found by equating the marginal revenues and marginal costs. For the empirical analysis, the wage equation, the marginal costs equation, and the marginal revenue equation are estimated simultaneously. The empirical results show that both the marginal cost and the marginal benefits of training vary with a worker's level of ability. For a reference male who participates in enterprise-related schooling, the wage increase is about 34 percent of the average wage rate of participants. Copyright 1994 by Royal Economic Society.

Date: 1994
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