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Recent Investments in Human Capital and its Effect on the Chances of Escaping from Low-Paid Jobs: The Spanish Case

Maite Blázquez Cuesta () and Jose Ramos ()
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Jose Ramos: Universidad Europea de Madrid

No 2008/03, Working Papers in Economic Theory from Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History)

Abstract: General education and training are major forces determining earnings. According to the human capital model, wage differentials among individuals over the life-cycle are largely the result of different patterns of investment in human capital. This paper is intended to analyze the effects of recent investments in human capital – general education, vocational/training or language courses - on workers’ relative earnings and on the probability of making an upwards transition in the earnings distribution. The analysis is done for Spain, using the European Community Household Panel (1995-2001). Our results reveal that having been recently in education or training (mainly vocational/training courses) significantly increases the probability of escaping from low pay to better paid jobs, while decreases the risk of falling into low-wage employment. Furthermore, this positive effect is significantly higher among those workers with a third level of general education completed. A separate analysis for females also reveals these positive returns of recent investments in human capital relative earnings, although in this case they appear to be none statistically significant.

Keywords: Education; on-the-job training; low pay; bivariate probit (search for similar items in EconPapers)
JEL-codes: C33 J24 J31 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2008-05
New Economics Papers: this item is included in nep-edu, nep-eec, nep-hrm and nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:uam:wpaper:200803

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