Why Do Low-Educated Workers Invest Less in Further Training?

32 Pages Posted: 13 Sep 2010

See all articles by Didier Fouarge

Didier Fouarge

Maastricht University

Trudie Schils

Maastricht University, Dept Economics; Amsterdam Institute of Advanced Labour Studies

Andries de Grip

Maastricht School of Business and Economics; IZA Institute of Labor Economics

Abstract

Several studies document the fact that low-educated workers participate less often in further training than high-educated workers. The economic literature suggests that there is no significant difference in employer willingness to train low-educated workers, which leaves the question of why the low educated invest less in training unanswered. This paper investigates two possible explanations: Low-educated workers invest less in training because of 1) the lower economic returns to these investments or 2) their lower willingness to participate in training. Controlling for unobserved heterogeneity that can affect the probability of enrolling into training, we find that the economic returns to training for low-educated workers are positive and not significantly different from those for high-educated workers. However, low-educated workers are significantly less willing to participate in training. This lesser willingness to participate in training is driven by economic preferences (future orientation, preference for leisure), as well as personality traits (locus of control, exam anxiety, and openness to experience).

Keywords: returns to training, preferences, non-cognitive skills

JEL Classification: J24, J31, C21

Suggested Citation

Fouarge, Didier and Schils, Trudie and de Grip, Andries, Why Do Low-Educated Workers Invest Less in Further Training?. IZA Discussion Paper No. 5180. Available at SSRN: https://ssrn.com/abstract=1675691

Didier Fouarge (Contact Author)

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands

Trudie Schils

Maastricht University, Dept Economics ( email )

P.O.Box 616
Maastricht, 6200 MD
Netherlands
+31 43 3883891 (Phone)
+31 43 3884150 (Fax)

HOME PAGE: http://www.trudieschils.nl

Amsterdam Institute of Advanced Labour Studies ( email )

PLantage Muidergracht 12
Amsterdam, 1018 TV
Netherlands
+31 20 5254199 (Phone)
+31 20 5254301 (Fax)

Andries De Grip

Maastricht School of Business and Economics ( email )

P. O. Box 616
Maastricht, NL 6200 MD
Netherlands

IZA Institute of Labor Economics

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

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