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Education, Training and Economic Performance: Evidence from Establishment Survival Data

William Collier (), Francis Green (), Young-Bae Kim () and John Peirson ()

Studies in Economics from School of Economics, University of Kent

Abstract: This paper analyses the savings behaviour of natives and immigrants in Germany. It is argued that uncertainty about future income and legal status (in case of immigrants) is a key component in the determination of the level of precautionary savings. Using the German dataset, we exploit a natural experiment arising from a change in the nationality law in Germany to estimate the importance of precautionary savings. Using difference-in-differences approach, we find a significant reduction in savings and remittances for immigrants after the easing of citizenship requirements, compared to the pre-reform period. Our parametric specification shows that introduction of the new nationality law reduces the marginal propensity to save gap between natives and immigrants by up to 80%. These findings suggest that much of the differences in terms of the savings behaviour between natives and immigrants are driven by the savings arising from the uncertainties about future income and legal status rather than cultural differences.

Keywords: Training; Education; Human capital; Profit, Skill (search for similar items in EconPapers)
JEL-codes: J24 J1 L21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-edu, nep-hrm, nep-lab, nep-mig and nep-pke
Date: 2008-12
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Journal Article: Education, Training and Economic Performance: Evidence from Establishment Survival Data (2011) Downloads
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