Career Progression and Formal versus On-the-Job Training

Costas Meghir, Christian Dustmann, Jerome Adda and Jean-Marc Robin

No 6087, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We develop a dynamic discrete choice model of training choice, employment and wage growth, allowing for job mobility, in a world where wages depend on firm-worker matches, as well as experience and tenure and jobs take time to locate. We estimate this model on a large administrative panel data set which traces labour market transitions, mobility across firms and wages from the end of statutory schooling. We use the model to evaluate the life-cycle return to apprenticeship training and find that on average the costs outweigh the benefits; however for those who choose to train the returns are positive. We then use our model to consider the long-term lifecycle effects of two reforms: One is the introduction of an Earned Income Tax Credit in Germany, and the other is a reform to Unemployment Insurance. In both reforms we find very significant impacts of the policy on training choices and on the value of realised matches, demonstrating the importance of considering such longer term implications.

Keywords: Education; Apprenticeship; Labour supply; Job mobility; Job search; Matching; Tax credits; Dynamic discrete choice; Administrative data (search for similar items in EconPapers)
JEL-codes: I2 J6 (search for similar items in EconPapers)
Date: 2007-02
New Economics Papers: this item is included in nep-bec, nep-dcm, nep-dge, nep-hrm and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Related works:
Working Paper: Career progression and formal versus on-the-job training (2010)
Working Paper: Career progression and formal versus on-the-job training (2009)
Working Paper: Career progression and formal versus on-the-job training (2006)
Working Paper: Career progression and formal versus on-the-job training (2006)
Working Paper: Career Progression and Formal versus On-the-Job Training (2006)
Working Paper: Career Progression and Formal versus On the Job Training (2005)
Working Paper: Career Progression and Formal versus on the Job Training (2004)
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