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)
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
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