The Returns to Continuous Training in Germany: New Evidence from Propensity Score Matching Estimators

39 Pages Posted: 27 Aug 2007 Last revised: 26 Aug 2008

See all articles by Grit Mühler

Grit Mühler

ZEW – Leibniz Centre for European Economic Research

Michael Beckmann

University of Freiburg - Personnel and Organizational Economics

Bernd Schauenberg

University of Freiburg (Germany) - Department of Economics

Date Written: 2007

Abstract

The present paper examines the wage effects of continuous training programs using individual-level data from the German Socio Economic Panel (GSOEP). In order to account for selectivity in training participation we estimate average treatment effects (ATE and ATT) of general and firm-specific continuous training programs using several state-of-the-art propensity score matching (PSM) estimators. Additionally, we also apply a combined matching difference-indifferences (MDiD) estimator to account for unobserved individual characteristics (e.g. motivation, ability). While the estimated ATE and ATT for general training are significant ranging between about 4 and 7.5%, the corresponding wage effects of firm-specific training are mostly insignificant. Using the more appropriate MDiD estimator, however, we find a more precise and highly significant wage effect of about 5 to 6%, though only for general training and not for firm-specific training. These results are consistent with standard human capital theory insofar as general training is associated with larger wage increases than firm-specific training. Furthermore, we conclude that firms may intend to use specific training to adjust to new job requirements, while career-relevant changes may be conditioned to general training.

Keywords: Continuous training, wage effect, average treatment effect, selectivity bias, propensity score matching estimators, combined matching difference-in-differences estimator

JEL Classification: C21, J24, J31, M53

Suggested Citation

Mühler, Grit and Beckmann, Michael and Schauenberg, Bernd, The Returns to Continuous Training in Germany: New Evidence from Propensity Score Matching Estimators (2007). ZEW - Centre for European Economic Research Discussion Paper No. 07-048, Available at SSRN: https://ssrn.com/abstract=1008452 or http://dx.doi.org/10.2139/ssrn.1008452

Grit Mühler (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Michael Beckmann

University of Freiburg - Personnel and Organizational Economics ( email )

Platz der Alten Synagoge
D-79085 Freiburg
Germany
++49 761 203-2392 (Phone)
++49 761 203-2394 (Fax)

Bernd Schauenberg

University of Freiburg (Germany) - Department of Economics ( email )

Platz der Alten Synagoge
D-79085 Freiburg i. Br., FR 1700
Switzerland

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
120
Abstract Views
1,045
rank
324,897
PlumX Metrics