Training Subsidies and the Wage Returns to Continuing Vocational Training: Evidence from Italian Regions

44 Pages Posted: 12 Apr 2010

See all articles by Giorgio Brunello

Giorgio Brunello

University of Padua - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Institute for the Study of Labor (IZA)

Simona Comi

Università degli Studi di Milano-Bicocca

Daniela Sonedda

University College London - Department of Economics; Universita degli Studi del Piemonte Orientale "Amedeo Avogadro" - Dipartimento di Scienze Economiche e Metodi Quantitativi

Abstract

We use the variation of training policy over time and across Italian regions to identify the relationship between individual training and earnings. Using longitudinal data for the period 1999 to 2005, we find that the marginal effect of one additional week of formal training on monthly earnings is 4.4 percent. This effect declines rapidly over time and is equal to 0.86 percent 10 years after the investment. We also find that marginal returns are higher among small firms, which are more likely to be constrained by lack of economic resources in their training decisions. Since small firms train less than large firms, their higher returns from the training induced by training policies can simply reflect decreasing marginal returns to training.

Keywords: training, training policies, Italy

JEL Classification: J24

Suggested Citation

Brunello, Giorgio and Comi, Simona and Sonedda, Daniela, Training Subsidies and the Wage Returns to Continuing Vocational Training: Evidence from Italian Regions. IZA Discussion Paper No. 4861, Available at SSRN: https://ssrn.com/abstract=1587554 or http://dx.doi.org/10.2139/ssrn.1587554

Giorgio Brunello (Contact Author)

University of Padua - Department of Economics ( email )

via Del Santo 33
35121 Padova
Italy
+39 049 827 4223 (Phone)
+39 049 827 4221 (Fax)

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

Institute for the Study of Labor (IZA)

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

Simona Comi

Università degli Studi di Milano-Bicocca ( email )

Piazza dell'Ateneo Nuovo, 1
Milano, Milan 20126
Italy

Daniela Sonedda

University College London - Department of Economics ( email )

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom

Universita degli Studi del Piemonte Orientale "Amedeo Avogadro" - Dipartimento di Scienze Economiche e Metodi Quantitativi ( email )

Via Perrone 18
28100 Novara
Italy

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