Occupational Mobility and the Returns to Training
| Title | {Occupational Mobility and the Returns to Training} |
| Publication Type | Journal Article |
| Year of Publication | 2012 |
| Authors | Kambourov, G., Manovskii, I., & Plesca, M. |
| Journal | University of Toronto Department of Economics Working Paper 444 |
| Keywords | human capital occupational mobility training |
| Abstract | A large literature studying the returns to firm- and government-sponsored training has made a striking observation. Immediately following a training episode, wages of participants in firm-sponsored training rise substantially while wages of participants in government-sponsored training rise little, or even decline. This has sparked consider- able research interest in studying why government-sponsored training is so ineffective. In this paper we show that there is a clear selection issue overlooked by the existing literature. In particular, a large fraction of the participants in government-sponsored training are occupation switchers, while most participants in firm-sponsored train- ing are occupation stayers. Since a switch of an occupation involves a substantial destruction of human capital, the associated decline in wages needs to be accounted for. Once we do this, we find a large positive impact of training on workers’ human capital. The magnitude of this effect is similar for firm- and government-sponsored training. |
| Contract Number | 1687 |
| Document URL | http://www.economics.utoronto.ca/workingPapers/tecipa-444.pdf |