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The more they spend, the more I earn? Firms' training investments and post-training wages of apprentices

Hans Dietrich, Harald Pfeifer () and Felix Wenzelmann
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Hans Dietrich: Institute for Employment Research (IAB), Nuremberg
Felix Wenzelmann: Federal Institute for Vocational Education and Training (BIBB), Bonn

No 116, Economics of Education Working Paper Series from University of Zurich, Department of Business Administration (IBW)

Abstract: In this paper, we examine the relation between a firm's training investment and the post-training wages of apprenticeship graduates. For our analysis, we first calculate a training investment indicator using detailed information about firm-level training costs. We then merge the firm-level data with individual-level administrative data on employment and wages of apprenticeship graduates. Using regression models controlling for selection into employment, we find that a firm investment in training relates positively with graduates' post-training wages. Doubling a firm's training investment leads to a wage mark-up of about 2.8%. This result is robust to different specifications. However, we find that especially graduates from low-investment firms benefit from a higher training investment. The wage mark-up for graduates from firms with already high investment levels is small and statistically not significant.

Keywords: Training investment; post-training wages; apprenticeship system (search for similar items in EconPapers)
JEL-codes: J24 J31 J62 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2016-03
New Economics Papers: this item is included in nep-lma
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