The Impact of Training on Productivity and Wages: Firm Level Evidence

49 Pages Posted: 7 Oct 2009  

Jozef Konings

Catholic University of Leuven (KUL) - LICOS - Centrum voor Transitie-economie; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Stijn Vanormelingen

Hogeschool-Universiteit Brussel (HUBrussel); KU Leuven - Centre for Institutions and Economic Performance (LICOS)

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Date Written: September 2009

Abstract

This paper uses firm level panel data of firm provided training to estimate its impact on productivity and wages. To this end the strategy proposed by Ackerberg, Caves and Frazer (2006) for estimating production functions to control for the endogeneity of input factors and training is applied. The productivity premium for a trained worker is estimated at 23%, while the wage premium of training is estimated at 12%. Our results give support to recent theories that explain work related training by imperfect competition in the labor market.

Keywords: Human Capital, Production Functions, Training

JEL Classification: J24, J31, L22

Suggested Citation

Konings, Jozef and Vanormelingen, Stijn, The Impact of Training on Productivity and Wages: Firm Level Evidence (September 2009). CEPR Discussion Paper No. DP7473. Available at SSRN: https://ssrn.com/abstract=1484506

Jozef Konings (Contact Author)

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Catholic University of Leuven (KUL) - LICOS - Centrum voor Transitie-economie ( email )

Waaistraat 6 - box 3511
Leuven, 3000
Belgium
+32 16 326 589 (Phone)
+32 16 326 599 (Fax)

Stijn Vanormelingen

Hogeschool-Universiteit Brussel (HUBrussel) ( email )

Stormstraat 2
Brussels, 1000
Belgium

KU Leuven - Centre for Institutions and Economic Performance (LICOS) ( email )

Waaistraat 6 - box 3511
Leuven, 3000
Belgium

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