Continuous Training in Germany

Abstract

Using data from the German Socio Economic Panel, I analyze the incidence, financing, and returns to workplace training in Germany for the years 1986 to 1989. Much of this training seems general, and is provided to workers by their employer at no direct cost. While workers typically report larger productivity gains from the training during work hours, such training has lower returns than training undertaken during leisure time. Workers with higher earnings growth seem more likely to participate in training. I deal with this selection problem by estimating models that allow for individual level heterogeneity in earnings growth rates.

Keywords: On-the-job-training, human capital model, returns to training

JEL Classification: J24, J31